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Services and Non-profit Marketing. Chapter 12. Services Defined. A service is the .............of applying human or mechanical efforts to ................. A service involves a .........., ............or ...........that can not be physically possessed. Services Defined.

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Services defined
Services Defined

  • A service is the .............of applying human or mechanical efforts to .................

  • A service involves a .........., ............or ...........that can not be physically possessed.

Services defined1
Services Defined

  • A service is the result of applying human or mechanical efforts to people or objects.

  • A service involves a deed, performance or effort that can not be physically possessed.

Percent of u s labor force by industry
Percent of U.S. Labor Force by Industry





Percent of U.S. Labor Force






  • Services

  • Manufacturing

  • Mining & Agriculture








Source: Survey of Current Business, April 1998, Table B.8, July 1988, Table 6.6B, and July 1992, Table 6.4C; Eli Ginzberg and George J. Vojta, “The Service Sector of the U.S. Economy,” Scientific American, 244,3 (1981): 31-39.

The service product continuum
The Service Product Continuum

Most offerings lie somewhere in the middle

Implications of intangibility
Implications of Intangibility

  • Services cannot be _________________

  • Services cannot be easily ___________

  • Services cannot be _________________

  • Pricing is _________________

Implications of heterogeneity
Implications of Heterogeneity

  • Service delivery and customer satisfaction depend on _________________

  • Service quality depends on many _________________

  • There is no sure knowledge that the service delivered matches what was planned and promoted

Implications of simultaneous production and consumption
Implications of Simultaneous Production and Consumption

  • Customers participate in and affect the transaction

  • Customers affect each other

  • Employees affect the service outcome

  • Decentralization may be essential

  • _________________ is difficult

Implications of perishability
Implications of Perishability

  • It is difficult to synchronize supply and demand with services

  • Services cannot be _________________

Service quality is more difficult to determine than goods quality we need

Ability to perform the promised service dependably and accurately.

Knowledge and courtesy of employees and their ability to inspire trust and confidence.

Physical facilities, equipment, and appearance of personnel.

Caring, individualized attention the firm provides its customers.

Willingness to help customers and provide prompt service.

Service Quality is more difficult to determine than goods quality: we need:






Service failures
Service Failures accurately.

What are your experiences of horrible customer service?

Gaps model of service quality extra
Gaps Model of Service Quality/Extra accurately.

Expected Service






External Communications to Customers




Gap 4

Gap 3

Customer-Driven Service Designs and Standards

Gap 1

Gap 2

Company Perceptions of Consumer Expectations

How to give horrible service service gaps
How to Give Horrible Service accurately. (Service Gaps)

  • Don’t listen to what your customers want (i.e., only listen to your CEO or wallet)- customer gap

  • Don’t act on customers’ wants

  • Hire people without skills or a care, and don’t train them

  • Tell the customer whatever they want to hear (i.e., overpromise and underdeliver)

  • Don’t meet (or barely meet) customers’ expectations (i.e., ignore people and insult their intelligence)=Customer Gap

Expanded mix for services the 7 ps
Expanded Mix for Services -- accurately. The 7 Ps

  • Product

  • Price

  • Place

  • Promotion

  • People

    • All human actors who play a part in service delivery and thus influence the buyer’s perceptions: namely, the firm’s personnel, the customer, and other customers in the service environment.

  • Physical Evidence

    • The environment in which the service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service.

  • Process

    • The actual procedures, mechanisms, and flow of activities by which the service is delivered—the service delivery and operating systems.

Acsi and annual percentage growth in s p 500 earnings
ACSI and Annual Percentage Growth accurately. in S&P 500 Earnings

Customer satisfaction and customer loyalty
Customer Satisfaction and Customer Loyalty accurately.

Source: James L. Heskett, W. Earl Sasser, Jr., and Leonard A. Schlesinger, The Service Profit Chain, (New York, NY: The Free Press, 1997), p. 83.

How to create relationships loyalty in services
How to create relationships (loyalty) in Services accurately.

Stable pricing

Bundling and cross selling

Volume and frequency rewards

1. Financial bonds

Integrated information systems

Continuous relationships


service and value





Structural bonds

Personal relationships

Joint investments


processes and equipment

Social bonds among customers

3. Customization


Anticipation/ innovation

Customer intimacy

Mass customization

Services and profit
Services and Profit accurately.

  • Not all services are for profit

  • Non profit services and organizations are a large part of society

  • What nonprofits can you think of?

Non profit marketing1
Non-Profit Marketing accurately.

  • Non-profits are over 20% of U.S. economic activity

  • Government taxes> housing, healthcare, or food costs

  • Hard to service someone who doesn’t want it (e.g., AA, gambling help)

  • Must complement (vs. compete with) for profit businesses