1chap. 11 marketing 7e lamb hair mcdaniel ©2004 south-western/thomson learning services and...
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1Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Services andServices andNonprofit Organization MarketingNonprofit Organization Marketing
Prepared byPrepared byDeborah BakerDeborah Baker
Texas Christian UniversityTexas Christian University
Chapter 11
2Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning ObjectivesLearning Objectives
1.1. Discuss the importance of services to the economy.
2. Discuss the differences between services and goods.
3. Describe the components of service quality and the gap model of service quality.
3Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objectives Learning Objectives (continued)(continued)
4. Develop marketing mixes for services.
5. Discuss relationship marketing in services.
6. Explain internal marketing in services.
4Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objectives Learning Objectives (continued)(continued)
7. Discuss global issues in services marketing.
8. Describe nonprofit organization marketing.
5Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss the importance of services to the economy.
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On Linehttp://www.yellowfreight.com
On Linehttp://www.yellowfreight.com
6Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
ServiceService
The result of applying
human or mechanical
efforts to people or objects.
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7Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
The Importance of ServicesThe Importance of Services
79% of workers are inservice sector
79% of workers are inservice sector
Services account for 76% of U.S. GDP
Services account for 76% of U.S. GDP
Service occupations will be responsible for all net job
growth through 2005
Service occupations will be responsible for all net job
growth through 2005
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8Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Service-Producing IndustriesService-Producing Industriesand Job Growthand Job Growth
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9Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss the differences between services and goods.
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On Linehttp://www.sheraton.com
On Linehttp://www.sheraton.com
10Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
How Services Differ from How Services Differ from GoodsGoods
Services Are Intangible Performances
Services Are Intangible Performances
Services Are Produced and Consumed Simultaneously
Services Are Produced and Consumed Simultaneously
Services Have Greater VariabilityServices Have Greater Variability
Services Are PerishableServices Are Perishable
22On Linehttp://www.nationalamusements.comhttp://www.amctheatres.comhttp://www.movietickets.com
On Linehttp://www.nationalamusements.comhttp://www.amctheatres.comhttp://www.movietickets.com
11Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe the components of service quality and the gap model of service quality.
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12Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Components of Service Components of Service QualityQuality
TangiblesTangibles The physical evidence of a service.
The physical evidence of a service.
EmpathyEmpathy Caring, individualized attention to customers.Caring, individualized attention to customers.
AssuranceAssurance The knowledge and courtesyof employees.
The knowledge and courtesyof employees.
ResponsivenessResponsiveness The ability to provideprompt service.
The ability to provideprompt service.
ReliabilityReliability The ability to perform the service right the first time.The ability to perform the service right the first time.
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13Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
The Gap Model of Service The Gap Model of Service QualityQuality33
14Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Develop marketing mixes for services.
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15Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Marketing Mixes for ServicesMarketing Mixes for Services
Product Product (Service)(Service)StrategyStrategy
Product Product (Service)(Service)StrategyStrategy Mental StimulusMental Stimulus
ProcessingProcessingMental StimulusMental Stimulus
ProcessingProcessing
People People ProcessingProcessing
People People ProcessingProcessing
PossessionPossessionProcessingProcessing
PossessionPossessionProcessingProcessing
InformationInformationProcessingProcessing
InformationInformationProcessingProcessing
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16Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Core and Supplementary Core and Supplementary ServicesServices
CoreServiceCore
Service
SupplementaryService
SupplementaryService
The most basic benefit the consumer is buying.
The most basic benefit the consumer is buying.
A group of services that supportor enhance the core service.
A group of services that supportor enhance the core service.
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17Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Core and Supplementary Core and Supplementary ServicesServices
for FedExfor FedEx
Overnight Overnight transportation transportation and delivery and delivery of packagesof packages
Problem solving
Billing statements
TracingDocumentation
Order taking
Supplies
Pickup
Advice andinformation
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18Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Mass CustomizationMass Customization
A strategy that uses
technology to deliver
customized services on a
mass basis.
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19Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Mass CustomizationMass CustomizationC
ust
om
izat
ion
Cu
sto
miz
atio
n
Low
Lo
w
High
Hig
h
CustomizedCustomizedFocusFocus
StandardizedStandardizedFocusFocus
CostCost
MassMassCustomizationCustomization
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20Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Service Mix StrategyService Mix Strategy
Determine what new services to introduce
Determine target market
Decide what existing services to maintain and/or eliminate
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21Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Distribution Strategy IssuesDistribution Strategy Issues
SchedulingScheduling
LocationLocation
Direct vs. Indirect Distribution
Direct vs. Indirect Distribution
Number of OutletsNumber of Outlets
ConvenienceConvenience
Focus forFocus forDistribution Distribution StrategiesStrategies
Focus forFocus forDistribution Distribution StrategiesStrategies
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22Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Promotion Strategy IssuesPromotion Strategy Issues
Stress tangible cues
Use personal information sources
Create a strongorganizational image
Engage in postpurchase communication
ServiceServicePromotion Promotion StrategiesStrategies
ServiceServicePromotion Promotion StrategiesStrategies
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23Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Price StrategyPrice Strategy
Pricing Pricing ChallengesChallenges
Pricing Pricing ChallengesChallenges
Trends have Trends have made pricing an made pricing an
active component active component
Trends have Trends have made pricing an made pricing an
active component active component
Define unit of Define unit of service consumptionservice consumption
Define unit of Define unit of service consumptionservice consumption
Determine if multiple Determine if multiple elements are “bundled”elements are “bundled”Determine if multiple Determine if multiple
elements are “bundled”elements are “bundled”
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24Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Pricing ObjectivesPricing Objectives
Revenue-OrientedPricing
Revenue-OrientedPricing
Operations-OrientedPricing
Operations-OrientedPricing
Patronage-OrientedPricing
Patronage-OrientedPricing
Categories ofCategories ofPricingPricing
ObjectivesObjectives
Categories ofCategories ofPricingPricing
ObjectivesObjectives
44On Linehttp://www.etrade.comhttp://www.ameritrade.comhttp://www.schwab.com
On Linehttp://www.etrade.comhttp://www.ameritrade.comhttp://www.schwab.com
25Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss relationship marketing in services.
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26Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Relationship Marketing Relationship Marketing in Servicesin Services
Level 1Level 1FinancialFinancial
Level 2Level 2Financial, SocialFinancial, Social
Level 3Level 3Financial, Social, StructuralFinancial, Social, Structural
Three LevelsThree Levelsof of
Relationship Relationship MarketingMarketing
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27Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Explain internal marketing in services.
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28Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Internal MarketingInternal Marketing
Treating employees as
customers and developing
systems and benefits that
satisfy their needs.
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29Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Internal Marketing ActivitiesInternal Marketing Activities
StressingTeamworkStressingTeamwork
Competing for Talent
Competing for Talent
Offeringa VisionOfferinga Vision
TrainingEmployeesTraining
Employees
EmpowermentEmpowermentKnowing
Employees’ Needs
KnowingEmployees’
NeedsRewarding
PerformanceRewarding
Performance
InternalInternalMarketingMarketingActivitiesActivities
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30Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Discuss global issues in services marketing.
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31Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Global Issues in Global Issues in Services MarketingServices Marketing
FinancialFinancial
ConstructionConstruction
EngineeringEngineering
InsuranceInsurance
Hotel ChainsHotel ChainsU.S. is world’s U.S. is world’s
largest largest exporter of servicesexporter of services
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32Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Learning Objective Learning Objective
Describe nonprofit organization marketing.
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33Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Nonprofit Organization Nonprofit Organization MarketingMarketing
An organization that exists
to achieve some goal other
than the usual business
goals of profit, market
share, or return on
investment.
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34Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Nonprofit OrganizationsNonprofit Organizations
GovernmentGovernment
Private MuseumsPrivate Museums
TheatersTheaters
SchoolsSchools
ChurchesChurches
Other Non-GovernmentOther Non-Government
Nonprofit Organizations
Nonprofit Organizations
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35Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Nonprofit Organization Nonprofit Organization MarketingMarketing
Market intangible productsMarket intangible products
Production requires customer’s presenceProduction requires customer’s presence
Services vary greatlyServices vary greatly
Services can not be storedServices can not be stored
Shared Shared Characteristics Characteristics
with with Service Service
OrganizationsOrganizations
Shared Shared Characteristics Characteristics
with with Service Service
OrganizationsOrganizations
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36Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Nonprofit Organization Nonprofit Organization Marketing ActivitiesMarketing Activities
Identify Desired CustomersIdentify Desired Customers
Specify ObjectivesSpecify Objectives
Develop, manage, eliminate programs/services
Develop, manage, eliminate programs/services
Set pricesSet prices
Schedule eventsSchedule events
Communicate through advertising/PRCommunicate through advertising/PR
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37Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Unique Aspects of Nonprofit Unique Aspects of Nonprofit Organization Marketing StrategiesOrganization Marketing Strategies
Setting of Marketing ObjectivesSetting of Marketing Objectives
Selection of Target MarketsSelection of Target Markets
Development of Marketing MixesDevelopment of Marketing Mixes
88
On Linehttp://www.peta.com
On Linehttp://www.peta.com
38Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Market ObjectivesMarket Objectives
Users
Payers
Donors
Politicians
Appointed officials
Media
General Public
Provide Services to:
Provide Services to:
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39Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Target MarketsTarget Markets
Apathetic or strongly opposed
targets
Apathetic or strongly opposed
targets
Pressure to adopt undifferentiated segmentation
Pressure to adopt undifferentiated segmentation
Complementary positioning
Complementary positioning
Unique Issues Unique Issues of Nonprofitof Nonprofit
OrganizationsOrganizations
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40Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Product DecisionsProduct Decisions
BenefitComplexity
BenefitComplexity
WeakBenefit Strength
WeakBenefit Strength
Low Involvement
Low Involvement
Distinctions betweenDistinctions betweenBusiness and NonprofitBusiness and Nonprofit
OrganizationsOrganizations
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41Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
On Linehttp://www.adcouncil.org
On Linehttp://www.adcouncil.org
Promotion DecisionsPromotion Decisions
Sales PromotionActivities
Public ServiceAdvertising
ProfessionalVolunteers
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42Chap. 11 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning
Pricing DecisionsPricing Decisions
Below-Cost PricingBelow-Cost Pricing
Separation BetweenPayers and Users
Separation BetweenPayers and Users
Indirect PaymentIndirect Payment
Nonfinancial PricesNonfinancial Prices
Pricing ObjectivesPricing Objectives
Characteristics Characteristics DistinguishingDistinguishing
Pricing DecisionsPricing Decisionsof Nonprofit of Nonprofit
OrganizationsOrganizations
Characteristics Characteristics DistinguishingDistinguishing
Pricing DecisionsPricing Decisionsof Nonprofit of Nonprofit
OrganizationsOrganizations
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