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Chapter 11 Services and Nonprofit Organization Marketing. ‘Product’ Essentials. TOTAL MARKETING EFFORTS. Product (tangible). Product Planning. The Offering. Idea (ambiguous). Service (intangible). The Goods/Services Continuum. Computer diskette. Computer software. Computer.

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product essentials
‘Product’ Essentials

TOTAL

MARKETING

EFFORTS

Product

(tangible)

Product

Planning

The

Offering

Idea

(ambiguous)

Service

(intangible)

the goods services continuum
The Goods/Services Continuum

Computer

diskette

Computer

software

Computer

Computer

program

Systems

design

Exercise

equipment

In-home

rental of

equipment

Use of

equipment

in hotel

Health and

fitness

clubs

Personal

trainer

Off-the-

rack

furniture

Custom-

made

furniture

Reuphol-

stering

furniture

Cleaning

furniture

Interior

decorator

Self-service

gasoline

Full-service

gasoline

Trans-

mission

overhaul

Driver ed.

(firm’s car)

Driver ed.

(consumer’s

car)

Pure goods

Pure services

Please note: The above continuum should be viewed left to right. Within each row,

a consistent pattern moves from pure good to pure service. When comparing different

rows, less consistency exists due to the diversity of examples shown.

character of services

Performances

Objects

Intangible

Tangible

Use

Ownership & Use

Memory of

Transaction

Accumulation

Storage

Reuse

Reminder of

Transaction

Character of Services

Services

Products

character of services5
Character of Services

Services

Products

Invisible

Visible

Costs not Seen

Costs Seen

purchase behavior for services
Purchase Behavior for Services

Services

Products

Experience

Attributes

Search

Attributes

(restaurant)

(color)

Credence

Attributes

(healthcare)

Difficult to

Judge Quality

Easier to

Judge Quality

Price More as a

Surrogate of Quality

Price Less as a

Surrogate of Quality

characteristics of services

Intangibility

Services that cannot be touched, seen, tasted, heard, or felt in the same manner as goods.

Inseparability

A characteristic of services that allows them to be produced and consumed simultaneously.

Heterogeneity

A characteristic of services that makes them less standardized and uniform than goods.

Perishability

A characteristics of services that prevents them from being stored, warehoused, or inventoried.

Characteristics of Services
components of service quality

Reliability

The ability to perform the service right the first time.

Responsiveness

The ability to provide

prompt service

Assurance

The knowledge and courtesy

of employees.

Empathy

Caring, individualized attention to customers.

Tangibles

The physical evidence

of a service.

Components of Service Quality
which components are most important to customers
Which Components are Most Important to Customers?

1. Reliability - 32%

2. Responsiveness - 22%

3. Assurance - 19%

4. Empathy - 16%

5. Tangibles - 11%

importance of service quality
Importance of Service Quality

Businesses with high Service Quality have

1. 10% higher prices

2. Grow 6% faster

3. 12% high return on sales

hard customer defined service standards
Hard Customer-Defined Service Standards
  • Federal Express # missed pickups
  • Dun & Bradstreet 36 hour turnaround
  • U.S. Healthcare 20-second call answering
  • Lenscrafters glasses in an hour
soft customer defined service standards
Soft Customer-Defined Service Standards
  • Land’s End personal attention
  • General Electric summarize actions
  • Nationwide Insurance responsiveness
  • American Express open and honest
bottom line for service quality
Bottom Line for Service Quality

1. Clear and reasonable promises

2. Build staff skills

3. Emphasize ‘Do-It-Right-First’ performance

4. Be great at problem resolution

5. Make it easy for customers to complain

the importance of services

79% of workers are in

service sector

Services account for 76% of U.S. GDP

Service occupations will be responsible for all job growth through 2005

1

The Importance of Services
gap model of service quality
Gap Model of Service Quality

Expected

Service

Gap 5

Perceived

Service

Consumer

Provider

Service

delivery

Communication

with Customers

Gap 1

Gap 4

Gap 3

Service Quality

Specifications

Gap Legend

  • Knowledge gap
  • Standards gap
  • Delivery gap
  • Communications gap
  • Service gap

Gap 2

Mgt. Perceptions of

Con. Expectations

core and supplementary services
Core and Supplementary Services

Advice and

information

Problem solving

Order taking

Overnight transportation and delivery of packages

Billing

statements

Supplies

Tracing

Pickup

Documentation

promotion strategy issues

Stress tangible cues

Service

Promotion

Strategies

Use personal information sources

Create a strongorganizational image

Engage in postpurchase communication

Promotion Strategy Issues
price strategy
Price Strategy

Define unit of

service consumption

Pricing Challenges

Determine if multiple elements are “bundled”

Trends have made pricing an

active component

internal marketing activities

Competing

for Talent

Offeringa Vision

TrainingEmployees

StressingTeamwork

Empowerment

KnowingEmployees’ Needs

RewardingPerformance

InternalMarketingActivities

Internal Marketing Activities
global issues in services marketing

Financial

Construction

Engineering

Insurance

U.S. is world’s largest exporter of services

Restaurant Chains

Global Issues in Services Marketing
differences between nonprofit and profit oriented marketing
Differences Between Nonprofit andProfit-Oriented Marketing

Differences

  • Scope
  • Forms of exchange
  • Complexity of objectives
  • Distribution of benefits
  • Market segments served
  • Constituencies

Nonprofit Marketing

Profit-oriented Marketing

illustrations of nonprofit marketing
Illustrations of Nonprofit Marketing

Examples of Social Marketing:

  • Choose to Save - Am Savings Ed Campaign

(see http://www.choosetosave.org

Also see www.financenter.com)

  • Road Rage
  • Take folic acid
  • Designated driver
  • International Women’s Rights
  • 164 Fº beef
for profit support of nonprofits
For-Profit Support of Nonprofits
  • Social Marketing
  • Strategic Philanthropy
  • Charity
  • AMEX’s ‘Charge Against Hunger’
  • Walker’s ‘Corporate Citizenship’

TOP: Nonprofits, Computer & Food

BOTTOM: Government, Insurance,

Chemicals & Tobacco

importance of social marketing
Importance of Social Marketing

http://www.social-marketing.org/

nonprofit organizations

Nonprofit Organizations

Government

Private Museums

Theaters

Schools

Churches

Other Non-government

Nonprofit Organizations
nonprofit organization marketing

Market intangible products

Shared Characteristics

with

Service Organizations

Production requires

customer’s presence

Services vary greatly

Services can not be stored

Nonprofit Organization Marketing
nonprofit organization marketing activities

Identify Desired Customers

Specify Objectives

Develop, manage, eliminate programs/services

Set prices

Schedule events

Communicate through advertising/PR

Nonprofit Organization Marketing Activities
market objectives
Users

Payers

Donors

Politicians

Appointed officials

Media

General Public

Market Objectives

Provide Services to:

target markets

Apathetic or strongly opposed

targets

Pressure to adopt undifferentiated segmentation

Complementary positioning

Target Markets

Unique Issues of Nonprofit

Organizations

product decisions

Benefit

Complexity

Weak

Benefit Strength

Low Involvement

Product Decisions

Distinctions betweenBusiness and NonprofitOrganizations

promotion decisions

ProfessionalVolunteers

Sales PromotionActivities

Public ServiceAdvertising

Licensing

Promotion Decisions

Nonprofit

Organization

Promotion

Decisions

pricing decisions

Pricing Objectives

Nonfinancial Prices

Characteristics

Distinguishing

Pricing Decisionsof Nonprofit Organizations

Indirect Payment

Separation BetweenPayers and Users

Below-Cost Pricing

Pricing Decisions
boyne usa
Boyne USA
  • How do the characteristics of services apply to Boyne’s offerings?
  • Explain the core and supplementary services for Boyne.
  • What about distribution?
  • How does Boyne match supply and demand for their services?

http://www.boyne.com/

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