Principles of marketing MKTG 8e joe hair carl mcdaniel chapter 012

Service and
Nonprofit
Organization
Marketing

Chapter 12
Lamb, Hair, McDaniel
2014-2015

© Cengage Learning 2015. All Rights Reserved.


1

Discuss the importance of services to the
economy

2

Discuss the differences between services
and goods

3

Describe the components of service quality
and the gap model of service quality

4

Develop marketing mixes for services
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2


5

Discuss relationship marketing in services

6

Explain internal marketing in services

7

Describe nonprofit organizational
marketing

8

Discuss global issues in services
marketing

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3


The Importance of Services

Discuss the importance

of services to the
economy

4

1
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The Importance of Services
Service industries accounted for
68 percent of U.S. GDP in 2012.
Services involve:
•Deeds
•Performances
•Efforts
1
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5


How Services Differ from Goods

Discuss the differences
between services and
goods

6

2
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How Services
Differ from Goods
Intangible
Intangible
Inseparable
Inseparable
Heterogeneous
Heterogeneous
Perishable
Perishable

No physical object makes it hard to
communicate benefits.
Production and consumption are
simultaneous, meaning the
consumer takes part in production.
Services depend on their
employees for quality, which
makes consistency difficult to
achieve.
Services cannot be saved, and it is
challenging to synchronize supply
and demand.

2
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7


When Services are Assessed
• Search quality: More often applied to
goods, assessed before purchase
• Experience quality: Assessed after
purchase
• Credence quality: Assessed only with
appropriate knowledge.

2
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8


Service Quality
Describe the
components
of service quality
and the gap model
of service quality

9

3
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Components of Service Quality
Reliability
Reliability

The
The ability
ability to
to perform
perform the
the
service
service right
right the
the first
first time.
time.

Responsiveness
Responsiveness

The
The ability
ability to
to provide
provide
prompt
prompt service.
service.

Assurance
Assurance

The
The knowledge
knowledge and
and courtesy
courtesy
of
of employees.
employees.

Empathy
Empathy

Caring,
Caring, individualized
individualized
attention
attention to
to customers.
customers.

Tangibles
Tangibles

The
The physical
physical evidence
evidence

of
of the
the service.
service.

3
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10


Exhibit 12.1
Gap Model of Service Quality

3
11


Marketing Mixes for Services

Develop marketing mixes
for services

12

4
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Product Strategies

for Services
Service as a
Process

Core and
Supplementary

Customization/
Standardization

Service
Mix

4
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13


Service as a Process
People
People
Processing
Processing
Possession
Possession
Processing
Processing
Mental
MentalStimulus

Stimulus
Processing
Processing
Information
Information
Processing
Processing
4
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14


The Service Offering
Core
Core
Service
Service

The
The most
most basic
basic benefit
benefit
the
the
consumer
consumer is
is buying.
buying.

Supplementary
Supplementary
Service
Service

A
A group
group of
of services
services that
that
support
support or
or enhance
enhance the
the
core
core service.
service.

4
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15


Customization/Standardization

Mass

Mass
Customization
Customization
A strategy that uses
technology to deliver
customized services
on a mass basis.

4
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16


The Service Mix
 Determine which new services to introduce
 Determine the target market
 Decide which existing services to maintain
and which to eliminate

4
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17


Place (Distribution) Strategy
Convenience
Convenience
Number

Number of
of outlets
outlets
Direct
Direct or
or indirect
indirect
distribution
distribution
Location
Location
Scheduling
Scheduling
4
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18


Promotion Strategy
Stress tangible cues
Use personal information
sources
Create a strong
organizational image
Engage in postpurchase
communication
4
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19


Price Strategy
Pricing Challenges for Services

 Define the unit of service consumption
 Determine if multiple elements are
“bundled” or priced separately

4
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20


Pricing Objectives
Revenue-Oriented
Pricing

Maximize the surplus of
income over costs

OperationsOriented
Pricing

Match supply and demand
by varying price

PatronageOriented

Pricing

Maximize the number of
customers by varying price

4
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21


Relationship Marketing in Services

Discuss relationship
marketing in services

22

5
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Relationship
Marketing in Services
3
Structural
Social
Financial

Creating valueadded services

not available
elsewhere

2
Social
Financial

Design services
to meet
customer needs

1
Financial

Pricing
incentives

5
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23


Internal Marketing in Service Firms

Explain internal
marketing in services

24

6
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Internal Marketing

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

6
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25