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Chapter 12: Services and Nonprofit
Organization Marketing
Prepared and Designed by Laura Rush, B-books Ltd.
1Copyright Cengage Learning 2013All Rights Reserved
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Learning Outcomes
Discuss the importance of services to the
economy
Discuss the differences between servicesand goods
Describe the components of service quality
and the gap model of service quality
Develop marketing mixes for services
2Copyright Cengage Learning 2013All Rights Reserved
LO1
LO2
LO3
LO4
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Learning Outcomes
Discuss relationship marketing in services
Explain internal marketing in services
Discuss global issues in services marketing
Describe nonprofit organization marketing
3Copyright Cengage Learning 2013All Rights Reserved
LO5
LO6
LO7
LO8
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The Importance of Services
Discuss the importance of
services to the economy.
LO1
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Service
The result of applying human or
mechanical efforts to
people or objects.
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Review Learning OutcomeThe Importance of Services
LO1
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
Services
Deed
Performance
Effort
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How Services Differ from Goods
Discuss the differences between
services and goods.
LO27
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How Services Differ from Goods
Search Qualities
Experience
Qualities
CredenceQualities
Intangibility
Online
http://www.webmd.com
9Copyright Cengage Learning 2013All Rights Reserved
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Service Quality
Describe the componentsof service quality
and the gap model
of service quality.
LO310
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Components of Service Quality
TangiblesThe physical evidence
of a service.
EmpathyCaring, individualized
attention to customers.
AssuranceThe knowledge and courtesy
of employees.
ResponsivenessThe ability to provide
prompt service.
Reliability The ability to perform dependently,accurately, and consistently.
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The Gap Model of Service Quality
12
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Review Learning OutcomeService Quality
LO313
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Marketing Mixes for Services
Develop marketing mixes
for services.
LO414
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Product Strategies for Services
Service
Mix
Standardization
orCustomization
Core and
SupplementaryProcess
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The Service Factory
Possession processing
Mental-stimulus processing
17Copyright Cengage Learning 2013
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The Service Offering
Core ServiceThe most basic
benefit the customer is buying.
Supplementary ServiceA
group of services that support
or enhance the core service.
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Core and Supplementary Services
for a Luxury Hotel
19Source: Christopher H. Lovelock and Jochen Wirtz, Services Marketing(Upper Saddle River, NJ: Pearson Education,Inc., 2006). Electronically reproduced with permission of Pearson Education, Inc.
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Customization/Standardization
Mass Customization
A strategy that uses technology
to deliver customized services
on a mass basis.
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The Service Mix
Determine what new services to introduce
Determine target market
Decide what existing services to maintain
and to eliminate
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Place (Distribution) Strategy
Scheduling
Location
Direct or indirectdistribution
Number of outlets
Convenience
22Copyright Cengage Learning 2013All Rights Reserved
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Promotion Strategy
23Copyright Cengage Learning 2013All Rights Reserved
Engage in postpurchasecommunication
Create a strongorganizational image
Use personal informationsources
Stress tangible cues
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Price Strategy
Define the unit of service consumption
Determine if multiple elements are bundledor priced separately
Pricing Challenges for Services
24Copyright Cengage Learning 2013All Rights Reserved
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Pricing Objectives
Revenue-OrientedPricing
Operations-Oriented
Pricing
Patronage-OrientedPricing
Maximize the surplus of incomeover costs
Match supply and demand by
varying price
Maximize the number ofcustomers by varying price
Online
http://www.etrade.com
http://www.tdameritrade.com
http://www.schwab.com
25Copyright Cengage Learning 2013 All Rights Reserved
Online
O
http://www.etrade.com/http://www.tdameritrade.com/http://www.schwab.com/http://www.schwab.com/http://www.tdameritrade.com/http://www.etrade.com/8/13/2019 LHM 12e ch12_PPT_IE
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Review Learning OutcomeMarketing Mixes for Services
PLACE PROMOTION PRICEPRODUCT
=SERVICE
Process
Core and
Supplementary
MassCustomization
Standardization
Number of
outlets
Direct
Indirect
Location
Tangible
cues
Personal
information
Strong image
Post-purchase
communication
Revenue
oriented
Operations
oriented
Patronageoriented
26Copyright Cengage Learning 2013 All Rights Reserved
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Relationship Marketing
Discuss relationship
marketing in services.
LO5
27
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Relationship Marketing
Attracting, developing, and retaining customerrelationships 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
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Copyright Cengage Learning 2013
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Internal Marketing in Service Firms
Explain internal
marketing in services.
LO6
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Internal Marketing
Treating employees as
customers and developing
systems and benefits that
satisfy their needs.
31Copyright Cengage Learning 2013All Rights Reserved
R i L i O t
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Review Learning Outcome
LO6
Internal Marketing in Services
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Global Issues in Services Marketing
Discuss global issues
in services marketing.
LO7
33
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Global Issues in Services Marketing
The U.S. is the worlds largest exporter ofservices. International competition is increasing.
To be successful, global service firms mustdetermine the nature of the core product. Additional services
Place
Promotion
Pricing Distribution
34Copyright Cengage Learning 2013All Rights Reserved
O
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Review Learning Outcome
LO7
Global Issues in Services Marketing
United States
is worlds largestexporter of services.
U.S.A.
35
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Nonprofit Organization Marketing
Describe nonprofit
organization marketing.
LO8
36
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Nonprofit Organization Marketing
Government
Museums
Theaters
Schools
Churches
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Nonprofit Organization Marketing
Market intangible products
Production requires
customers presence
Services vary greatly
Services can not be stored
Shared
Characteristicswith
ServiceOrganizations
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Nonprofit Organization Marketing
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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Target Markets
Apathetic orstrongly opposed
targets
Pressure to adoptundifferentiatedsegmentation
Complementarypositioning
43Copyright Cengage Learning 2013
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Product Decisions
Benefit complexity
Benefit strength
Low involvement
Distinctions betweenBusiness and Nonprofit Organizations
44Copyright Cengage Learning 2013
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Promotion Decisions
Sales promotion activities
Public service advertising
Professional volunteers
Online
http://www.adcouncil.com
Peer-to peer-communications
45Copyright Cengage Learning 2013
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Pricing Decisions
Below-cost pricing
Separation between
payers and users
Indirect payment
Nonfinancial prices
Pricing objectives
CharacteristicsDistinguishingPricing Decisions
of NonprofitOrganizations
46
Copyright Cengage Learning 2013 All Rights Reserved
Review Learning Outcome
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Review Learning OutcomeNonprofit Organization Marketing
LO8
TARGET
Apathetic orstrongly opposed
Undifferentiated
segmentation
Complementary
positioning
PRODUCT
PROMOTION
PLACE
PRICE
Professional
volunteers
Sales
Public Service
Advertising
Involvement
Benefit
strength
Benefit
complexity
Special
facilities
Nonfinancial
Indirect
payment
Separation
Below cost
pricing
47
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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
Copyright Cengage Learning 2013
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http://www.cengage.com/marketing/book_content/9781111821647_lamb/videos/ch12.htmlhttp://www.cengage.com/marketing/book_content/9781111821647_lamb/videos/ch12.htmlhttp://www.cengage.com/marketing/book_content/9781111821647_lamb/videos/ch12.htmlhttp://www.cengage.com/marketing/book_content/9781111821647_lamb/videos/ch12.html8/13/2019 LHM 12e ch12_PPT_IE
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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 iPhoneapplication fresh and new.
http://www.cengage.com/marketing/book_content/1439039429_lamb/part_videos/part03.html
Copyright Cengage Learning 2013 49
http://www.cengage.com/marketing/book_content/1439039429_lamb/part_videos/part03.htmlhttp://www.cengage.com/marketing/book_content/1439039429_lamb/part_videos/part03.htmlhttp://www.cengage.com/marketing/book_content/1439039429_lamb/part_videos/part03.htmlhttp://www.cengage.com/marketing/book_content/1439039429_lamb/part_videos/part03.html