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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