SUPPLEMENTAL “SERVICES”PRODUCT ELEMENT

FRAMEWORKS

FOR

MKTG 490

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

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

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

Discuss the importance of services to the

economy

The Importance of ServicesThe Importance of ServicesLO1

LO1

Service

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

Service

REVIEW LEARNING OUTCOME

LO1

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

Discuss the differences between services and goods

How Services Differ from How Services Differ from GoodsGoodsLO2

How Services Differ from Goods

LO2

Intangible

Inseparable

Heterogeneous

Perishable

How Services Differ from Goods

LO2

Intangibility

Search Qualities

Experience Qualities

Credence Qualities

Online

http://www.webmd.com

Describe the components

of service quality and the gap model of service quality

Service QualityService QualityLO3

Components of Service QualityLO3

Tangibles The physical evidence of a service.

Empathy Caring, individualized attention to customers.

Assurance The knowledge and courtesyof employees.

Responsiveness The ability to provideprompt service.

Reliability The ability to perform the service right the first time.

The Gap Model of Service QualityLO3

Biz Flix

LO3Intolerable Cruelty

REVIEW LEARNING OUTCOME

LO3

Service Quality

Develop marketing mixes for services

Marketing Mixes for ServicesMarketing Mixes for ServicesLO4

LO4

Product Strategies for Services

ServiceMix

Standardizationor

Customization

Core andSupplementaryProcess

LO4

Service as a Process

Mental StimulusProcessing

People Processing

PossessionProcessing

InformationProcessing

LO4

The Service Factory

Possession processing

Mental-stimulus processing

LO4

The Service Offering

CoreService

SupplementaryService

The most basic benefit the consumer is buying.

A group of services that supportor enhance the core service.

LO4

Core and Supplementary Services for FedEx

Overnight Overnight transportation transportation and delivery of and delivery of

packagespackages

Problem solving

Billing statements

Tracing Documentation

Order taking

Supplies

Pickup

Advice andinformation

LO4

Customization/Standardization

A strategy that uses technology to deliver customized services on a mass basis.

MassCustomization

LO4

The Service Mix

Determine what new services to introduce

Determine target market

Decide what existing services to maintain and to eliminate

LO4

Place (Distribution) Strategy

Scheduling

Location

Direct or indirect distribution

Number of outlets

Convenience

LO4

Promotion Strategy

Stress tangible cues

Use personal information sources

Create a strong organizational image

Engage in postpurchase communication

LO4

Price Strategy

Pricing Challenges for Services

Define the unit of service consumption

Determine if multiple elements are “bundled” or priced separately

LO4

Pricing ObjectivesRevenue-OrientedPricing

Operations-OrientedPricing

Patronage-OrientedPricing

Maximize the surplus of income over costs

Match supply and demand by varying price

Maximize the number of customers by varying price

http://www.etrade.comhttp://www.tdameritrade.comhttp://www.schwab.com

Online

REVIEW LEARNING OUTCOME

LO4

Marketing Mixes for Services

PLACE PROMOTION PRICEPRODUCT

= SERVICE

Process

Core and Supplementary

Mass Customization

Standardization

Number ofoutlets

Direct

Indirect

Location

Tangiblecues

Personalinformation

Strong image

Post-purchasecommunication

Revenueoriented

Operationsoriented

Patronageoriented

Discuss relationship marketing in services

Relationship MarketingRelationship MarketingLO5

REVIEW LEARNING OUTCOME

LO5

Relationship Marketing in Services

2Social

Financial1

Financial

3Structural

SocialFinancial

Pricing incentives

Design services to meet customer needs

Creating value-added services not available elsewhere

Explain internal marketing in services

Internal Marketing in Internal Marketing in Service FirmsService FirmsLO6

Internal MarketingLO6

Internal Marketing Treating employees

as customers and developing systems and benefits that satisfy their needs.

REVIEW LEARNING OUTCOME

LO6

Internal Marketing in Services

Discuss global issues

in services marketing

Global Issues in Global Issues in Services MarketingServices MarketingLO7

REVIEW LEARNING OUTCOME

LO7

Global Issues in Services Marketing

United States is world’s largest exporter of services.

U.S.A.

Describe nonprofit organization

marketing

Nonprofit Organization Nonprofit Organization MarketingMarketingLO8

Nonprofit Organization Marketing

LO8

NonprofitOrganization

MarketingAn organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment.

Nonprofit Organization Marketing

LO8

Government

Museums

Theaters

Schools

Churches

Nonprofit Organization Marketing

LO8

Market intangible products

Production requires customer’s presence

Services vary greatly

Services cannot be stored

Shared Characteristics

with Service

Organizations

Nonprofit Organization Marketing

LO8

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

LO8

Setting of marketing objectives

Selection of target markets

Development of marketing mixes

Objectives

LO8

Provide services that respond to the wants of :

UsersPayersDonorsPoliticians

Appointed officialsMediaGeneral Public

Target Markets

LO8

Apathetic or strongly opposed

targets

Pressure to adopt undifferentiated segmentation

Complementary positioning

Unique Issues of Nonprofit

Organizations

Product Decisions

LO8

Distinctions between Business and Nonprofit Organizations

Benefit complexity

Weak or indirect benefit strength

Low involvement

Promotion Decisions

LO8

Sales promotion activities

Public service advertising

Professional volunteers

Online

http://www.adcouncil.com

Pricing Decisions

LO8 Below-cost pricing

Separation betweenpayers and users

Indirect payment

Nonfinancial prices

Pricing objectives

Characteristics Distinguishing

Pricing Decisionsof Nonprofit

Organizations

REVIEW LEARNING OUTCOME

LO8

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