Services and Nonprofit Organization Marketing Key Concepts

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 Services Deed Performance Effort Deed Performance Effort

How Services Differ from Goods What are the differences between services and goods?

How Services Differ from Goods Intangible Inseparable Heterogeneous Perishable

How Services Differ from Goods Intangibility Search Qualities Experience Qualities Credence Qualities

Components of Service Quality Tangibles The PHYSICAL EVIDENCE of a service. The PHYSICAL EVIDENCE of a service. Empathy CARING, individualized attention to customers. Assurance The KNOWLEDGE and courtesy of employees. The KNOWLEDGE and courtesy of employees. Responsiveness The ability to provide PROMPT service. The ability to provide PROMPT service. Reliability The ability to perform the service RIGHT the first time.

Marketing Mixes for Services Develop marketing mixes for services

Product Strategies for Services Service Mix Standardization or Customization Core and Supplementary Process

Service as a Process Mental Stimulus Processing People Processing People Processing Possession Processing Information Processing

The Service Factory Possession processing Mental-stimulus processing

The Service Offering Core Service Supplementary Service Supplementary Service The most BASIC BENEFIT the consumer is buying. A group of services that SUPPORT or ENHANCE the core service. A group of services that SUPPORT or ENHANCE the core service.

Core and Supplementary Services for FedEx Overnight transportation and delivery of packages Problem solving Billing statements Tracing Documentation Order taking Supplies Pickup Advice and information

Customization/Standardization A strategy that uses technology to deliver CUSSTOMIZED SERVICES on a MASS basis. Mass Customization

The Service Mix Determine what new services to introduce Determine target market Decide what existing services to maintain and to eliminate

Place (Distribution) Strategy Scheduling Location Direct or indirect distribution Direct or indirect distribution Number of outlets Convenience

Promotion Strategy Stress tangible cues Use personal information sources Create a strong organizational image Engage in postpurchase communication

Price Strategy Pricing Challenges for Services Define the unit of service consumption Determine if multiple elements are bundled or priced separately

Pricing Objectives Revenue-Oriented Pricing Operations-Oriented Pricing Patronage-Oriented Pricing Maximize the surplus of income over costs Match supply and demand by varying price Maximize the number of customers by varying price

Marketing Mixes for Services PLACE PROMOTION PRICE PRODUCT = SERVICE Process Core and Supplementary Mass Customization Standardization Number of outlets Direct Indirect Location Tangible cues Personal information Strong image Post-purchase communication Revenue oriented Operations oriented Operations oriented Patronage oriented

Internal Marketing Treating employees as customers and developing systems and benefits that satisfy their needs.

Nonprofit Organization Marketing LO 8 Nonprofit Organization Marketing An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment.

Nonprofit Organization Marketing Government Museums Theaters Schools Churches

Nonprofit Organization Marketing Market intangible products Production requires customers presence Production requires customers presence Services vary greatly Services cannot be stored Shared Characteristics with Service Organizations Shared Characteristics with Service Organizations

Nonprofit Organization Marketing 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 Setting of marketing objectives Selection of target markets Development of marketing mixes

Objectives Provide services that respond to the wants of : Users Payers Donors Politicians Appointed officials Media General Public

Target Markets Apathetic or strongly opposed targets Apathetic or strongly opposed targets Pressure to adopt undifferentiated segmentation Complementary positioning Unique Issues of Nonprofit Organizations

Product Decisions Distinctions between Business and Nonprofit Organizations Benefit complexity Weak or indirect benefit strength Low involvement

Promotion Decisions Sales promotion activities Public service advertising Professional volunteers

Pricing Decisions Below-cost pricing Separation between payers and users Indirect payment Nonfinancial prices Pricing objectives Characteristics Distinguishing Pricing Decisions of Nonprofit Organizations Characteristics Distinguishing Pricing Decisions of Nonprofit Organizations

Nonprofit Organization Marketing TARGET Apathetic or strongly 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

MARKETING OF FAMILY PLANNING SERVICES & AIDS PREVENTION The special case of CABBAGES AND CONDOMS program in Thailand