1. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University Lamb, Hair, McDaniel 2007-2008 Services and Nonprofit Organization Marketing 11 CHAPTER

2. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 2 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 LO 1 LO 2 LO 3

3. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 3 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 LO 6 LO 5 LO 7 LO 8 LO 4

4. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 4 Discuss the importance of services to the economy The Importance of Services LO 1

5. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 5 LO 1 Service The result of applying human or mechanical efforts to people or objects. Service

6. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 6 REVIEW LEARNING OUTCOME LO 1 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

7. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 7 Discuss the differences between services and goods How Services Differ from Goods LO 2

8. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 8 How Services Differ from Goods LO 2 Intangible Inseparable Heterogeneous Perishable

9. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 9 How Services Differ from Goods LO 2 Intangibility  Search Qualities  Experience Qualities  Credence Qualities Online http://www.webmd.com

10. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 10 Describe the components of service quality and the gap model of service quality Service Quality LO 3

11. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 11 Components of Service Quality LO 3 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.

12. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 12 LO 4 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.

13. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 13 LO 4 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

14. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 14 Describe nonprofit organization marketing Nonprofit Organization Marketing LO 8

15. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 15 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.

16. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 16 Nonprofit Organization Marketing LO 8  Government  Museums  Theaters  Schools  Churches

17. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17 Nonprofit Organization Marketing LO 8 Market intangible products Production requires customer’s presence Production requires customer’s presence Services vary greatly Services cannot be stored Shared Characteristics with Service Organizations Shared Characteristics with Service Organizations

18. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18 Unique Aspects of Nonprofit Organization Marketing Strategies LO 8  Setting of marketing objectives  Selection of target markets  Development of marketing mixes

19. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19 Objectives LO 8 Provide services that respond to the wants of :  Users  Payers  Donors  Politicians  Appointed officials  Media  General Public

20. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20 Target Markets LO 8 Apathetic or strongly opposed targets Apathetic or strongly opposed targets Pressure to adopt undifferentiated segmentation Complementary positioning Unique Issues of Nonprofit Organizations

21. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 21 Product Decisions LO 8 Distinctions between Business and Nonprofit Organizations  Benefit complexity  Weak or indirect benefit strength  Low involvement

22. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 22 Promotion Decisions LO 8 Sales promotion activities Public service advertising Professional volunteers Online http://www.adcouncil.com

23. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 23 Pricing Decisions LO 8 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

24. Chapter 11Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 24 REVIEW LEARNING OUTCOME LO 8 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