Chapter 12 MKTG6

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Chapter 12 Copyright 2012 by Cengage Learning Inc. All rights reserved 1

Lamb, Hair, McDaniel

CHAPTER 12Services andNonprofit

OrganizationMarketing

2012-2013

PeterDazeley/PhotographersChoice/Getty

Images


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2013 by Cengage Learning Inc. All Rights Reserved.2

The Importance

of Services

10 20 30 40 50 60 70 80 90 100

80%

Services as a percentage of employment

(Projected by 2018)

Services

Deed

Performance

Effort

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How Services

Differ from Goods

Intangible

Inseparable

Heterogeneous

Perishable

No physical object makes it hard to

communicate benefits.

Production and consumption are

simultaneous, meaning theconsumer 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.

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When Services are Assessed

Search Qualitymore often applied to

goods, assessed before purchase

Experience qualityassessed afterpurchase

Credence qualityassessed only with

appropriate knowledge.

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Components of Service Quality

TangiblesThe physical evidence

of the service.

EmpathyCaring, individualized

attention to customers.

AssuranceThe knowledge and courtesy

of employees.

ResponsivenessThe ability to provide

prompt service.

Reliability The ability to perform theservice right the first time.

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Exhibit 12.1

Gap Model of Service Quality


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Product Strategies

for Services

ServiceMix

Customizationor

Standardization

Core and

SupplementaryProcess

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Service as a Process

Mental Stimulus

Processing

PeopleProcessing

PossessionProcessing

InformationProcessing

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The Service Offering

CoreService

SupplementaryService

The most basic benefit theconsumer is buying.

A group of services that supportor enhance the core service.

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10/28 2013 by Cengage Learning Inc. All Rights Reserved.

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Exhibit 12.2

Core and Supplementary Services for a

Luxury Hotel

SOURCE: Lovelock,

Christopher H.; Wirtz,

Jochen, Services Marketing,

6th, 2007. Electronically

reproduced by permission of

Pearson Education, Inc.,

Upper Saddle River, New

Jersey


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Customization/Standardization

A strategy that uses

technology to deliver

customized services

on a mass basis.

Mass

Customization

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The Service Mix

Determine what new services to

introduce

Determine target market

Decide what existing services tomaintain and to eliminate

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13/28 2013 by Cengage Learning Inc. All Rights Reserved.

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Place (Distribution) Strategy

Scheduling

Location

Direct or indirectdistribution

Number of outlets

Convenience

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Promotion Strategy

Stress tangible cues

Use personal informationsources

Create a strongorganizational image

Engage in postpurchasecommunication

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Price Strategy

Pricing Challenges for Services

Define the unit of serviceconsumption

Determine if multiple elementsare bundled or priced

separately

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Pricing Objectives

Revenue-OrientedPricing

Operations-OrientedPricing

Patronage-Oriented

Pricing

Maximize the surplus of incomeover costs

Match supply and demand byvarying price

Maximize the number of

customers by varying price

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2Social

Financial

1Financial

3

StructuralSocialFinancial

Pricing incentives

Design services to

meet customer needs

Creating value-added

services not availableelsewhere

Relationship

Marketing in Services

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Internal Marketing

Internal

Marketing

Treating employees as

customers and

developing systems and

benefits that satisfy theirneeds.

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Global Issues in

Services Marketing

The U.S. is the worlds largest

exporter of services

The marketing mix must reflect each

countrys cultural, technological, and

political environment

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Nonprofit Organization

An organization that exists to achieve some

goal other than the usual business goals of

profit, market share, or return on investment.

Government

Museums

Theaters

Schools

Churches

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Marketing

Market intangible products

Production requirescustomers presence

Services vary greatly

Services cannot be stored

SharedCharacteristicswith

ServiceOrganizations

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Marketing Activities

Identify desired customers

Specify objectives

Develop, manage, eliminate programs and services

Decide on prices

Schedule events or programs

Communicate their availability

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Unique Aspects of Nonprofit

Organization Marketing Strategies

Setting of marketing objectives

Selection of target markets

Development of marketing mixes

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Objectives

Provide serv ices that respond to the wants o f :

Users

Payers

Donors

Politicians

Appointed

officials

Media

General Public

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Target Markets

Apathetic orstrongly opposed

targets

Pressure to adoptundifferentiatedsegmentation

Complementarypositioning

Unique Issues

of Nonpro f i t

Organizat ions

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Product Decisions

Distinctions betweenBusiness and Nonprofit Organizations

Benefit complexity

Weak or indirect benefit strength

Low involvement

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Promotion Decisions

Sales promotion activities

Public service advertising

Professional volunteers

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Pricing Decisions

Below-cost pricing

Separation between

payers and users

Indirect payment

Nonfinancial prices

Pricing objectives

CharacteristicsDistinguishing

Pricing Decisionsof Nonprofit

Organizations

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Chapter 12 MKTG6

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