Services and
Nonprofit Organization Marketing
chapter
11
Chapter 11 Version 6e
Prepared by
Deborah Baker
Texas Christian University
©2002 South-Western
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Learning Objectives
11
2. Discuss the differences between services
and goods.
chapter
1. Discuss the importance of services to the
economy.
3. Describe the components of service quality
and the gap model of service quality.
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Learning Objectives (continued)
4. Explain why services marketing is
important to manufacturers.
5. Develop marketing mixes for services.
11
chapter
6. Discuss relationship marketing in services.
7. Explain internal marketing in services.
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Learning Objectives (continued)
8. Discuss global issues in services
marketing.
9. Describe nonprofit organization marketing.
chapter
11
10.Explain the unique aspects of nonprofit
organization marketing.
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1
Learning Objective
Discuss the importance of
services to the economy.
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1
Service
The result of applying
human or mechanical
efforts to people or objects.
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The Importance of Services
79% of workers are in
service sector
Services account for
76% of U.S. GDP
Service occupations will be
responsible for all job growth
through 2005
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2
Learning Objective
Discuss the differences
between services and goods.
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2
How Services Differ from Goods
Intangibility
Characteristics
That
Distinguish
Services
Inseparability
Heterogeneity
Perishability
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2
Characteristics of Services
Intangibility
Inseparability
Heterogeneity
Perishability
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Services that cannot be touched,
seen, tasted, heard, or felt in the
same manner as goods.
A characteristic of services that
allows them to be produced and
consumed simultaneously.
A characteristic of services that
makes them less standardized
and uniform than goods.
A characteristics of services that
prevents them from being stored,
warehoused, or inventoried.
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3
Learning Objective
Describe the components of service quality
and the gap model of service quality.
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3
Service Quality
Reliability
Responsiveness
Components for
Evaluating
Service Quality
Assurance
Empathy
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Tangibles
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Components of Service Quality
Reliability
The ability to perform the
service right the first time.
Responsiveness
The ability to provide
prompt service
Assurance
The knowledge and courtesy
of employees.
Empathy
Caring, individualized
attention to customers.
Tangibles
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The physical evidence
of a service.
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3
The Gap Model of Service Quality
Customer
Expected Service
GAP 5
Perceived Service
Provider
GAP 1
Service Delivery GAP 4 Communication
with Customers
GAP 3
Quality Specifications
GAP 2
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Mgmt
perception
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4
Learning Objective
Explain why services marketing
is important to manufacturers.
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Services Marketing in
Manufacturing
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5
Learning Objective
Develop marketing mixes for services.
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5
Marketing Mixes for Services
People
Processing
Product
(Service)
Strategy
Possession
Processing
Information
Processing
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Core and Supplementary Services
Core
Service
The more basic benefit the
consumer is buying.
Supplementary
Service
A group of services that support
or enhance the core service.
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Core and Supplementary Services
Problem solving
Billing
statements
Tracing
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Advice and
information
Overnight
transportation
and delivery
of packages
Documentation
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Order taking
Supplies
Pickup
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5
5
Mass Customization
A strategy that uses
technology to deliver
customized services on a
mass basis.
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5
High
Customized
Focus
Mass
Customization
Standardized
Focus
Low
Customization
Mass Customization
High
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Cost
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Low
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5
Service Mix Strategy
 Determine what new services to
introduce
 Determine target market
 Decide what existing services to
maintain and/or eliminate
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5
Distribution Strategy Issues
Convenience
Number of Outlets
Focus for
Distribution
Strategies
Direct vs. Indirect
Distribution
Location
Scheduling
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5
Promotion Strategy Issues
Stress tangible cues
Service
Promotion
Strategies
Use personal
information sources
Create a strong
organizational image
Engage in postpurchase
communication
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5
Price Strategy
Define unit of
service consumption
Pricing
Challenges
Determine if multiple
elements are “bundled”
Trends have
made pricing an
active component
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Pricing Objectives
Categories of
Pricing
Objectives
PatronageOriented
Pricing
Revenue-Oriented
Pricing
OperationsOriented
Pricing
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6
Learning Objective
Discuss relationship marketing
in services.
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Relationship Marketing
in Services
Three Levels
of
Relationship
Marketing
6
Level 3
Financial, Social, Structural
Level 2
Financial, Social
Level 1
Financial
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Relationship Marketing
in Services
Level
Type of
bond
Degree of
service
customization
Main element
of marketing
mix
One
Financial
Low
Two
Financial
and social
Medium
Personal
communication
Three
Financial,
social, and
structural
Medium to
high
Service
delivery
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Price
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Potential for
long-term
advantage
over competitors
Low
Medium
High
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7
Learning Objective
Explain internal marketing
in services.
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Internal Marketing
Treating employees as
customers and developing
systems and benefits that
satisfy their needs.
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Internal Marketing Activities
Competing
for Talent
Offering
a Vision
Empowerment
Training
Employees
Rewarding
Performance
Stressing
Teamwork
Knowing
Employees’
Needs
Internal
Marketing
Activities
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8
Learning Objective
Discuss global issues
in services marketing.
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Global Issues in
Services Marketing
8
Financial
Construction
Engineering
Insurance
U.S. is world’s
largest
exporter of services
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Restaurant Chains
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9
Learning Objective
Describe nonprofit
organization marketing.
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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.
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Nonprofit Organizations
Government
Private Museums
Theaters
Schools
Nonprofit
Organizations
Churches
Other Non-government
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Nonprofit Organization Marketing
Market intangible products
Shared
Characteristics
with
Service
Organizations
Production requires
customer’s presence
Services vary greatly
Services can not be stored
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Nonprofit Organization
Marketing Activities
9
Identify Desired Customers
Specify Objectives
Develop, manage, eliminate
programs/services
Set prices
Schedule events
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Communicate
6e
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advertising/PR
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Learning Objective
10
Explain the unique aspects of
nonprofit organization marketing.
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Unique Aspects of Nonprofit
10
Organization Marketing Strategies
Unique Aspects of
Marketing of Nonprofit
Organizations
Market
Objectives
Marketing
Mixes
Target
Markets
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Market Objectives
Provide Services
to:
 Users
 Payers
 Appointed
officials
 Donors
 Media
 Politicians
 General Public
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Target Markets
Apathetic or
strongly opposed
targets
Pressure to adopt
undifferentiated
segmentation
Unique Issues
of Nonprofit
Organizations
Complementary
positioning
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Product Decisions
Benefit
Complexity
10
Distinctions between
Business and Nonprofit
Organizations
Weak
Benefit Strength
Low
Involvement
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Promotion Decisions
Professional
Volunteers
Nonprofit
Organization
Promotion
Decisions
Sales Promotion
Activities
Public Service
Advertising
Licensing
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Pricing Decisions
Pricing Objectives
Nonfinancial Prices
Characteristics
Distinguishing
Pricing Decisions
of Nonprofit
Organizations
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Indirect Payment
Separation Between
Payers and Users
Below-Cost Pricing
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