© 2016 Cengage Learning. All Rights Reserved. MKTG10 Lamb, Hair, and McDaniel Chapter 12 Services and Nonprofit Organization Marketing Chapter 12 Services and Nonprofit Organization Marketing * The Importance of Services Service industries accounted for 68 percent of U.S. GDP in 2014. Services involve:DeedsPerformancesEfforts © 2016 Cengage Learning. All Rights Reserved. * Chapter 12 Services and Nonprofit Organization Marketing * © 2016 Cengage Learning. All Rights Reserved. * How Services Differ from Goods Intangible Inseparable Heterogeneous Perishable No physical object makes it hard to communicate benefits. Production and consumption are simultaneous, meaning the consumer takes part in production. Services depend on their employees for quality, which makes consistency difficult to achieve. Services cannot be saved, and it is challenging to synchronize supply and demand. Chapter 12 Services and Nonprofit Organization Marketing * © 2016 Cengage Learning. All Rights Reserved. * When Services are Assessed Search quality: More often applied to goods, assessed before purchaseExperience quality: Assessed after purchaseCredence quality: Assessed only with appropriate knowledge. Chapter 12 Services and Nonprofit Organization Marketing * © 2016 Cengage Learning. All Rights Reserved. * Components of Service Quality Tangibles The physical evidence of the service. Empathy Caring, individualized attention to customers. Assurance The knowledge and courtesy of employees. Responsiveness The ability to provide prompt service. Reliability The ability to perform the service right the first time. Chapter 12 Services and Nonprofit Organization Marketing * * 12.1 Gap Model of Service Quality © 2016 Cengage Learning. All Rights Reserved. Chapter 12 Services and Nonprofit Organization Marketing * © 2016 Cengage Learning. All Rights Reserved. * Product Strategies for Services Customization/ Standardization Service Mix Core and Supplementary Service as a Process Chapter 12 Services and Nonprofit Organization Marketing * © 2016 Cengage Learning. All Rights Reserved. * Service as a Process Mental Stimulus Processing People Processing Possession Processing Information Processing Chapter 12 Services and Nonprofit Organization Marketing * © 2016 Cengage Learning. All Rights Reserved. * The Service Offering Core Service Supplementary Service The most basic benefit the consumer is buying. A group of services that support or enhance the core service. Chapter 12 Services and Nonprofit Organization Marketing * © 2016 Cengage Learning. All Rights Reserved. * Customization/Standardization Mass Customization A strategy that uses technology to deliver customized services on a mass basis. Chapter 12 Services and Nonprofit Organization Marketing * © 2016 Cengage Learning. All Rights Reserved. * The Service Mix Determine which new services to introduce Determine the target market Decide whi.

1. © 2016 Cengage Learning. All Rights Reserved.
MKTG10
Lamb, Hair, and McDaniel
Chapter 12
Services and Nonprofit Organization Marketing
Chapter 12 Services and Nonprofit Organization Marketing
*
The Importance of Services
Service industries accounted for 68 percent of U.S. GDP in
2014.
Services involve:DeedsPerformancesEfforts
© 2016 Cengage Learning. All Rights Reserved.
*
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*

2. How Services
Differ from Goods
Intangible
Inseparable
Heterogeneous
Perishable
No physical object makes it hard to communicate benefits.
Production and consumption are simultaneous, meaning the
consumer takes part in production.
Services depend on their employees for quality, which makes
consistency difficult to achieve.
Services cannot be saved, and it is challenging to synchronize
supply and demand.
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
When Services are Assessed Search quality: More often applied
to goods, assessed before purchaseExperience quality: Assessed
after purchaseCredence quality: Assessed only with appropriate
knowledge.
Chapter 12 Services and Nonprofit Organization Marketing
*

3. © 2016 Cengage Learning. All Rights Reserved.
*
Components of Service Quality
Tangibles
The physical evidence
of the service.
Empathy
Caring, individualized
attention to customers.
Assurance
The knowledge and courtesy
of employees.
Responsiveness
The ability to provide
prompt service.
Reliability
The ability to perform the
service right the first time.
Chapter 12 Services and Nonprofit Organization Marketing
*
*
12.1
Gap Model of Service Quality
© 2016 Cengage Learning. All Rights Reserved.

4. Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Product Strategies
for Services
Customization/
Standardization
Service
Mix
Core and
Supplementary
Service as a
Process
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Service as a Process
Mental Stimulus
Processing
People

5. Processing
Possession
Processing
Information
Processing
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
The Service Offering
Core
Service
Supplementary
Service
The most basic benefit the
consumer is buying.
A group of services that support or enhance the core service.
Chapter 12 Services and Nonprofit Organization Marketing
*

6. © 2016 Cengage Learning. All Rights Reserved.
*
Customization/Standardization
Mass
Customization
A strategy that uses technology to deliver customized services
on a mass basis.
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
The Service Mix
Determine which new services to introduce
Determine the target market
Decide which existing services to maintain and which to
eliminate
Chapter 12 Services and Nonprofit Organization Marketing
*

7. © 2016 Cengage Learning. All Rights Reserved.
*
Place (Distribution) Strategy
Scheduling
Location
Direct or indirect
distribution
Number of outlets
Convenience
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Promotion Strategy
Stress tangible cues
Use personal information
sources
Create a strong organizational image
Engage in postpurchase communication
Chapter 12 Services and Nonprofit Organization Marketing
*

8. © 2016 Cengage Learning. All Rights Reserved.
*
Price Strategy
Define the unit of service consumption
Determine if multiple elements are “bundled” or priced
separately
Pricing Challenges for Services
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Pricing Objectives
Revenue-Oriented
Pricing
Operations-Oriented
Pricing
Patronage-Oriented
Pricing
Maximize the surplus of income over costs
Match supply and demand by varying price
Maximize the number of customers by varying price
Chapter 12 Services and Nonprofit Organization Marketing
*

9. © 2016 Cengage Learning. All Rights Reserved.
*
Relationship
Marketing in Services
2
Social
1
Financial
3
Customization
Provide pricing incentives
Design services to meet customer needs
Build social bonds
4
Structural
Offer value-added services
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Internal Marketing

10. Treating employees as customers and developing systems and
benefits that satisfy their needs.
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Nonprofit Organization
An organization that exists to achieve some goal other than the
usual business goals of profit, market share, or return on
investment.
Governments
Museums
Theaters
Schools
Churches
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Nonprofit Organization
Marketing Activities
Identify desired customers
Specify objectives

11. Develop, manage, eliminate programs
and services
Decide on prices
Schedule events or programs
Communicate their availability
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*Setting of marketing objectives
Selection of target markets
Development of marketing mixes
Unique Aspects of Nonprofit
Organization Marketing Strategies
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Objectives
Nonprofit organizations focus on generating enough funds to
cover expenses.

12. Nonprofits provide services that respond to the wants of:
Users
Payers
Donors
Politicians
Appointed officials
Media
General Public
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Target Markets
Unique Issues
of Nonprofit
Organizations
Apathetic or strongly opposed
targets
Pressure to adopt undifferentiated segmentation
Complementary positioning
Chapter 12 Services and Nonprofit Organization Marketing
*

13. © 2016 Cengage Learning. All Rights Reserved.
*
Product Decisions
Benefit complexity
Weak or indirect benefit strength
Low involvement
Distinctions between
Business and Nonprofit Organizations
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Place Decisions
A nonprofit organization’s ability to distribute its service
offerings where and when customer groups want them is a key
variable in determining success.
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Promotion Decisions

14. Sales promotion activities
Public service advertising
Professional volunteers
Chapter 12 Services and Nonprofit Organization Marketing
*
© 2016 Cengage Learning. All Rights Reserved.
*
Pricing Decisions
Below-cost pricing
Separation between
payers and users
Indirect payment
Nonfinancial prices
Pricing objectives
Characteristics
Distinguishing
Pricing Decisions
of Nonprofit
Organizations

15. Chapter 12 Services and Nonprofit Organization Marketing
*