Page 1
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1
MKTG
Designed byAmy McGuire, B-books, Ltd.
Prepared byDeborah Baker, Texas Christian University
Lamb, Hair, McDaniel 2007-2008 Services
and Nonprofit Organization Marketing
11
CHAPTER
Page 2
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 2
Learning Outcomes
Discuss the importance of services to the economy
Discuss the differences between services and goods
Describe the components of service quality and the gap model of service quality
LO1
LO2
LO3
Page 3
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 3
Learning Outcomes
Develop marketing mixes for services
Discuss relationship marketing in services
Explain internal marketing in services
Discuss global issues in services marketing
Describe nonprofit organization marketing
LO6
LO5
LO7
LO8
LO4
Page 4
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 4
Discuss the importance of services to the
economy
The Importance of ServicesThe Importance of ServicesLO1
Page 5
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 5
LO1
Service
The result of applying
human or mechanical
efforts to people or
objects.
ServiceService
Page 6
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 6
REVIEW LEARNING OUTCOMELO1
The Importance of Services
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
81%
Services as a percentage of GDP
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
81%
Services as a percentage of employment
ServicesDeedPerformanceEffort
DeedPerformanceEffort
Page 7
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 7
Discuss the differences between services and goods
How Services Differ from GoodsHow Services Differ from GoodsLO2
Page 8
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 8
How Services Differ from Goods
LO2
IntangibleIntangible
InseparableInseparable
HeterogeneousHeterogeneous
PerishablePerishable
Page 9
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 9
How Services Differ from Goods
LO2
IntangibilityIntangibility
Search Qualities
Experience Qualities
Credence Qualities
Online
http://www.webmd.com
Page 10
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 10
Describe the components
of service quality and the gap model of service quality
Service QualityService QualityLO3
Page 11
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 11
Components of Service QualityLO3
TangiblesTangibles The physical evidence of a service.
The physical evidence of a service.
EmpathyEmpathy Caring, individualized attention to customers.Caring, individualized attention to customers.
AssuranceAssurance The knowledge and courtesyof employees.
The knowledge and courtesyof employees.
ResponsivenessResponsiveness The ability to provideprompt service.
The ability to provideprompt service.
ReliabilityReliability The ability to perform the service right the first time.The ability to perform the service right the first time.
Page 12
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 12
LO4
The Service Offering
CoreServiceCore
Service
SupplementaryService
SupplementaryService
The most basic benefit the consumer is buying.
The most basic benefit the consumer is buying.
A group of services that supportor enhance the core service.
A group of services that supportor enhance the core service.
Page 13
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 13
LO4
Core and Supplementary Services for FedEx
Overnight Overnight transportation transportation and delivery of and delivery of
packagespackages
Problem solving
Billing statements
TracingDocumentation
Order taking
Supplies
Pickup
Advice andinformation
Page 14
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 14
Describe nonprofit organization
marketing
Nonprofit Organization Nonprofit Organization MarketingMarketing
LO8
Page 15
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 15
Nonprofit Organization Marketing
LO8
NonprofitOrganization
Marketing
NonprofitOrganization
Marketing
An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment.
Page 16
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 16
Nonprofit Organization Marketing
LO8
Government
Museums
Theaters
Schools
Churches
Page 17
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17
Nonprofit Organization Marketing
LO8
Market intangible productsMarket intangible products
Production requires customer’s presenceProduction requires customer’s presence
Services vary greatlyServices vary greatly
Services cannot be storedServices cannot be stored
Shared Characteristics
with Service
Organizations
Shared Characteristics
with Service
Organizations
Page 18
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18
Unique Aspects of Nonprofit Organization Marketing Strategies
LO8
Setting of marketing objectives
Selection of target markets
Development of marketing mixes
Page 19
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19
Objectives
LO8
Provide services that respond to the wants of :
Users
Payers
Donors
Politicians
Appointed officials
Media
General Public
Page 20
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20
Target Markets
LO8
Apathetic or strongly opposed
targets
Apathetic or strongly opposed
targets
Pressure to adopt undifferentiated segmentation
Pressure to adopt undifferentiated segmentation
Complementary positioning
Complementary positioning
Unique Issues of Nonprofit
Organizations
Page 21
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 21
Product Decisions
LO8
Distinctions between Business and Nonprofit Organizations
Benefit complexity
Weak or indirect benefit strength
Low involvement
Page 22
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 22
Promotion Decisions
LO8
Sales promotion activities
Public service advertising
Professional volunteers
Online
http://www.adcouncil.com
Page 23
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 23
Pricing Decisions
LO8 Below-cost pricingBelow-cost pricing
Separation betweenpayers and users
Separation betweenpayers and users
Indirect paymentIndirect payment
Nonfinancial pricesNonfinancial prices
Pricing objectivesPricing objectives
Characteristics Distinguishing
Pricing Decisionsof Nonprofit
Organizations
Characteristics Distinguishing
Pricing Decisionsof Nonprofit
Organizations
Page 24
Chapter 11 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 24
REVIEW LEARNING OUTCOMELO8
Nonprofit Organization Marketing
TARGET• Apathetic or
strongly opposed• Undifferentiated
segmentation• Complementary
positioning
PRODUCT
PROMOTION
PLACE
PRICE
Professional
volunteersSales
Public ServiceAdvertising
Involvement
Benefitstrength
Benefitcomplexity
Specialfacilities
Nonfinancial
Indirect payment
Separation
Below costpricing