Services and Nonprofit Organization
Marketing
Key Concepts
The Importance of Services
Services
Deed
Performance
Effort
Services as a percentage of GDP
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
81%
Services as a percentage of employment
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
81%
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
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
The PHYSICAL EVIDENCE
of a service.
Marketing Mixes for Services
Develop marketing mixes for services
Product Strategies for Services
Process
Core and
Supplementary
Standardization
or
Customization
Service
Mix
Service as a Process
People
Processing
Possession
Processing
Mental Stimulus
Processing
Information
Processing
The Service Factory
Possession processing
Mental-stimulus
processing
The Service Offering
Core
Service
The most BASIC BENEFIT the
consumer is buying.
Supplementary
Service
A group of services that
SUPPORT
or ENHANCE the core service.
Core and Supplementary
Services for FedEx
Problem
solving
Billing
statements
Tracing
Advice and
information
Overnight
transportation
and delivery of
packages
Documentation
Order taking
Supplies
Pickup
Customization/Standardization
Mass
Customization
A strategy that uses
technology to deliver
CUSSTOMIZED
SERVICES on a
MASS basis.
The Service Mix
 Determine what new services to introduce
 Determine target market
 Decide what existing services to maintain and to
eliminate
Place (Distribution) Strategy
Convenience
Number of outlets
Direct or indirect
distribution
Location
Scheduling
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
Maximize the surplus of income
over costs
Operations-Oriented
Pricing
Match supply and demand by
varying price
Patronage-Oriented
Pricing
Maximize the number of
customers by varying price
Marketing Mixes for Services
PRODUCT
=
SERVICE
PLACE
PROMOTION
PRICE
Process
Number of
outlets
Tangible
cues
Revenue
oriented
Core and
Supplementary
Direct
Personal
information
Operations
oriented
Mass
Customization
Indirect
Strong image
Patronage
oriented
Standardization
Location
Post-purchase
communication
Internal Marketing
Internal
Marketing
Treating employees as
customers and developing
systems and benefits that
satisfy their needs.
Nonprofit Organization
Marketing
Nonprofit
Organization
Marketing
LO8
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
Shared
Characteristics
with
Service
Organizations
Production requires
customer’s presence
Services vary greatly
Services cannot be stored
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
 Appointed officials
 Payers
 Media
 Donors
 General Public
 Politicians
Target Markets
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
Professional volunteers
Sales promotion activities
Public service advertising
Pricing Decisions
Pricing objectives
Characteristics
Distinguishing
Pricing Decisions
of Nonprofit
Organizations
Nonfinancial prices
Indirect payment
Separation between
payers and users
Below-cost pricing
Nonprofit Organization Marketing
Benefit
complexity
PRODUCT
Benefit
strength
Involvement
Professional
volunteers
PROMOTION
PLACE
Special
facilities
TARGET
• Apathetic or
strongly opposed
• Undifferentiated
segmentation
• Complementary
positioning
Sales
Public Service
Advertising
Nonfinancial
Indirect
payment
Separation
Below cost
pricing
PRICE
MARKETING OF FAMILY PLANNING
SERVICES & AIDS PREVENTION
The special case of
CABBAGES AND CONDOMS
program in Thailand