LHM 12e ch12 - PPT - IE

Chapter 12: Services and Nonprofit Organization Marketing
Prepared and Designed by Laura Rush, B-books Ltd.
Copyright Cengage Learning 2013 All Rights Reserved
Learning Outcomes
LO1 LO2 LO3
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 Develop marketing mixes for services
LO4
Learning Outcomes
LO5 LO6 LO7 LO8 Discuss relationship marketing in services Explain internal marketing in services Discuss global issues in services marketing Describe nonprofit organization marketing
The Importance of Services
Discuss the importance of
services to the economy.
LO1
Service
The result of applying human or mechanical efforts to people or objects.
Review Learning Outcome

The Importance of Services
Deed Performance Effort
Services
Services as a percentage of GDP

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
81%
Services as a percentage of employment

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
81%
LO1
How Services Differ from Goods
Discuss the differences between
services and goods.
LO2

Intangible
Inseparable
Heterogeneous
Perishable

Intangibility
Search Qualities Experience Qualities Credence Qualities

Online
http://www.webmd.com
Service Quality
Describe the components of service quality and the gap model of service quality.
LO3
10
Components of Service Quality

Reliability
The ability to perform dependently, accurately, and consistently.

The ability to provide prompt service.
Responsiveness Assurance Empathy Tangibles
The knowledge and courtesy of employees. Caring, individualized attention to customers.

The physical evidence of a service.
Copyright Cengage Learning 2013 All Rights Reserved 11
The Gap Model of Service Quality
12

Service Quality
LO3
13
Marketing Mixes for Services
Develop marketing mixes
for services.
LO4
14
Product Strategies for Services
Process
Core and Supplementary
Standardization or Customization
Service Mix
15
Service as a Process
People Processing Possession Processing Mental Stimulus Processing Information Processing
16
The Service Factory
Possession processing
Mental-stimulus processing
The Service Offering

Core Service The most basic
benefit the customer is buying.
Supplementary Service A
group of services that support or enhance the core service.
18
Core and Supplementary Services for a Luxury Hotel
Source: Christopher H. Lovelock and Jochen Wirtz, Services Marketing (Upper Saddle River, NJ: Pearson Education, Inc., 2006). Electronically reproduced with permission of Pearson Education, Inc.
19
Customization/Standardization
Mass Customization A strategy that uses technology
to deliver customized services

on a mass basis.
20
The Service Mix
Determine what new services to introduce Determine target market Decide what existing services to maintain and to eliminate
21
Place (Distribution) Strategy

Convenience Number of outlets Direct or indirect distribution
Location
Scheduling
Promotion Strategy
Stress tangible cues

Use personal information sources
Create a strong organizational image Engage in postpurchase communication
23
Price Strategy
Pricing Challenges for Services Define the unit of service consumption Determine if multiple elements are bundled or priced separately
24
Pricing Objectives
Revenue-Oriented Pricing Operations-Oriented Pricing Maximize the surplus of income over costs Match supply and demand by varying price
Patronage-Oriented Pricing
Online
http://www.etrade.com http://www.tdameritrade.com http://www.schwab.com
Maximize the number of customers by varying price
Online
25

Marketing Mixes for Services
PRODUCT = SERVICE
PLACE
PROMOTION
PRICE
Process
Number of outlets
Tangible cues
Revenue oriented
Core and Supplementary

Mass Customization
Direct
Personal information
Operations oriented
Patronage oriented
Indirect
Strong image
Standardization
Location
Post-purchase communication
26
Relationship Marketing
Discuss relationship
marketing in services.
LO5
27
Relationship Marketing
Attracting, developing, and retaining customer relationships to build strong customer loyalty. Level 1:
Pricing incentives
Level 2:
Pricing incentives + social bonds with customers
Level 3:
Pricing incentives + social bonds + structural bonds

Relationship Marketing in Services
3 Creating Value-added Services
Structural Social Financial Social Financial
2 Designs Services to Meet Customer Needs 1 Pricing Incentives
Financial
LO5
29
Internal Marketing in Service Firms
Explain internal
marketing in services.
LO6
30
Internal Marketing
Treating employees as customers and developing
systems and benefits that

satisfy their needs.
31

Internal Marketing in Services
LO6
32
Global Issues in Services Marketing
Discuss global issues in services marketing.
LO7
33

The U.S. is the worlds largest exporter of services.
International competition is increasing.
To be successful, global service firms must determine the nature of the core product.
Additional services Place Promotion Pricing Distribution
34

U.S.A.
United States is worlds largest exporter of services.
LO7
35
Nonprofit Organization Marketing
Describe nonprofit
organization marketing.
LO8
36
Nonprofit Organizations
An organization that exists to

achieve some goal other than the usual business
goals of profit, market share,

or return on investment.
37

Government Museums Theaters Schools
Churches
38

Market intangible products
Shared Characteristics with Service Organizations
Production requires customers presence
Services vary greatly
Services can not be stored
39

Identify desired customers Specify objectives Develop, manage, eliminate programs and services Decide on prices Schedule events or programs Communicate their availability
Unique Aspects of Nonprofit Organization Marketing Strategies

Setting of marketing objectives Selection of target markets Development of marketing mixes
41
Objectives
Provide services that respond to the wants of :
Users Payers Donors Politicians
Appointed officials Media General Public
42
Target Markets
Apathetic or strongly opposed targets Pressure to adopt undifferentiated segmentation
Complementary positioning
43
Product Decisions
Distinctions between Business and Nonprofit Organizations
Benefit complexity Benefit strength Low involvement
44
Promotion Decisions
Professional volunteers
Sales promotion activities
Public service advertising
Peer-to peer-communications
Online
http://www.adcouncil.com
Pricing Decisions
Pricing objectives Nonfinancial prices Characteristics Distinguishing Pricing Decisions of Nonprofit Organizations Indirect payment Separation between payers and users Below-cost pricing
46 Copyright Cengage Learning 2013 All Rights Reserved

Benefit complexity
PRODUCT
Benefit strength
PLACE
Special facilities
TARGET
Involvement
Apathetic or strongly opposed Undifferentiated segmentation Complementary positioning
Professional volunteers
Nonfinancial Indirect payment
PROMOTION
Sales Public Service Advertising
Separation Below cost pricing
PRICE
LO8
47
Chapter 12 Company Clip

Kodak isnt selling only products, these days. The company has an entire division dedicated to delivering service solutions to business customers.
http://www.cengage.com/marketing/book_content/ 9781111821647_lamb/videos/ch12.html
48
Part 3 Video: Rogue Sheep

This video focuses on Rogue Sheep and their iPhone app Postage. Brad and Chris discuss what goes into developing, marketing, and keeping an iPhone application fresh and new.
http://www.cengage.com/marketing/book_content/ 1439039429_lamb/part_videos/part03.html

LHM 12e ch12 - PPT - IE

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Chapter 12: Services and Nonprofit Organization Marketing

Prepared and Designed by Laura Rush, B-books Ltd.

Copyright Cengage Learning 2013 All Rights Reserved

Discuss the importance of services to the economy

Copyright Cengage Learning 2013 All Rights Reserved

Copyright Cengage Learning 2013 All Rights Reserved

The Importance of Services

Discuss the importance of

services to the economy.

Copyright Cengage Learning 2013 All Rights Reserved

The result of applying human or mechanical efforts to people or objects.

Copyright Cengage Learning 2013 All Rights Reserved

Review Learning Outcome

Services as a percentage of GDP

Services as a percentage of employment

Copyright Cengage Learning 2013 All Rights Reserved

How Services Differ from Goods

Discuss the differences between

services and goods.

Copyright Cengage Learning 2013 All Rights Reserved

How Services Differ from Goods

Copyright Cengage Learning 2013 All Rights Reserved

How Services Differ from Goods

Search Qualities Experience Qualities Credence Qualities

Copyright Cengage Learning 2013 All Rights Reserved

Copyright Cengage Learning 2013 All Rights Reserved

Components of Service Quality

The ability to perform dependently, accurately, and consistently.

Responsiveness Assurance Empathy Tangibles

The knowledge and courtesy of employees. Caring, individualized attention to customers.

The Gap Model of Service Quality

Review Learning Outcome

Copyright Cengage Learning 2013 All Rights Reserved

Marketing Mixes for Services

Develop marketing mixes

Copyright Cengage Learning 2013 All Rights Reserved

Product Strategies for Services

Core and Supplementary

Copyright Cengage Learning 2013 All Rights Reserved

Copyright Cengage Learning 2013 All Rights Reserved

The Service Factory

The Service Offering

Copyright Cengage Learning 2013 All Rights Reserved

Core and Supplementary Services for a Luxury Hotel

Mass Customization A strategy that uses technology

to deliver customized services

Copyright Cengage Learning 2013 All Rights Reserved

The Service Mix

Copyright Cengage Learning 2013 All Rights Reserved

Place (Distribution) Strategy

Stress tangible cues

Create a strong organizational image Engage in postpurchase communication

Copyright Cengage Learning 2013 All Rights Reserved

Copyright Cengage Learning 2013 All Rights Reserved

Maximize the number of customers by varying price

Copyright Cengage Learning 2013 All Rights Reserved

Review Learning Outcome

Core and Supplementary

Copyright Cengage Learning 2013 All Rights Reserved

Copyright Cengage Learning 2013 All Rights Reserved

Review Learning Outcome

3 Creating Value-added Services

Structural Social Financial Social Financial