Principles of Marketing Chapter 12 - Services and Nonprofit Organization Marketing

Explain internal marketing in services

Internal marketing means treating employees as customers & developing systems & benefits that satisfy their needs. Employees who like their jobs & are happy with the firm they work for are more likely to deliver good service

Discuss relationship marketing in services

Involves attracting, developing, & retaining customer relationships. There are three levels of relationship marketing: level 1 focuses on pricing incentives; level 2 uses pricing incentives and social bonds with customers; & level 3 uses pricing, social bonds, & structural bonds to build long-term relationships

Develop marketing mixes for services

- "Product" (service) strategy issues incl. what is being processed (people/possessions/mental stimulus/information), core & supplementary services, customization vs. standardization, & the service mix. - Distribution (place) decisions involve convenience, # of outlets, direct vs. indirect distribution, & scheduling. - Effective promotion strategies incl. stressing tangible cues, using personal sources of information, creating strong organizational images, & engaging in postpurchase communication - Pricing objectives for services can be revenue oriented, operations oriented, patronage oriented, or any combination of the three

What are the categories of adopters?

- Innovators (willing to take risks and are viewed by their peers as risk takers) - Early Adopters (Have a high degree of opinion leadership among the adopter categories. They are more aggressive than later adopters, but are judicious about their adoption choices) - Early Majority (Span a longer period of time than the innovators and early adopters. Like the early adopters, the early majority's opinions and decisions carry weight across the adopter categories) - Late majority (Arrive after the "average" participant have embraced an innovation. These individuals approach innovations reluctantly and with more skepticism than their predecessors) - Laggards (Last to adopt an innovation. They typically have little or no opinion leadership and are averse to things they perceive as "agents of change." Laggards tend to be focused on traditions and are less socially connected than the other groups)

Is the PLC different for Styles, Fashion, and Fads?

- Style will last until a new technology style appears. So the shape of a style product life cycle is like a wave, as one style fades out, another appears - Fashion: Current trend or popular style in a particular field - can last for a short period and the product life cycle will decline very rapidly, or will decline slowly or even turn into what is known as a timeless classic product life cycle - A fad is a product that is around for a short period. Sales peak very quickly

What are some reasons new products fail?

-They simply do not offer any discernible benefit compared to existing products -A poor match between product features and customer desires -Overestimation of market size -Incorrect targeting or positioning -A price too high or too low -Inadequate distribution -Poor promotion -Simply an inferior product.

Experience Quality

A characteristic that can be assessed only after use

Search Quality

A characteristic that can be easily assessed before purchase

Credence Quality

A characteristic that consumers may have difficulty assessing even after purchase because they do not have the necessary knowledge or experience

Supplementary Services

A group of services that support or enhance the core service

Gap Model

A model identifying five gaps that can cause problems in service delivery and influence customer evaluations of service quality

Mass Customization

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

Public Service Advertisement (PSA)

An announcement that promotes a program of a federal, state, or local government or of a nonprofit organization

Nonprofit Organization

An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment

Empathy

Caring, individualized attention to customers

What is meant by commercializing the new product?

Commercialization is the process of bringing new products or services to market. The broader act of commercialization entails production, distribution, marketing, sales, customer support, and other key functions critical to achieving the commercial success of the new product or service

Diffusion

Common sense suggests that not everyone will buy a new product at the same time. Some will rush out and buy first or try to get an early version of a product before it is widely available. Others will wait until many people have adopted a product before they reluctantly consider the purchase. As early as 1962, Everett Rogers recognized this phenomenon and described it as the "diffusion of innovation."

Explain the PLC (Product Life Cycle)

Product development Market introduction Growth Maturity Decline

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

Service quality has 5 components: - Reliability (ability to perform the service dependably, accurately, and consistently) - Responsiveness (providing prompt service) - Assurance (knowledge and courtesy of employees & their ability to convey trust) - Empathy (caring, individualized attention) - Tangibles (physical evidence of the service) The gap model identifies 5 key discrepancies that can influence customer evaluations of service quality - when gaps are large, service quality is low. As the gaps shrink, service quality improves. Mgr.s use this to analyze sources of quality problems & to understand how service quality can be improved -Gap 1 is found between customers' expectations & mgmt's perceptions of those expectations. -Gap 2 is between management's perception of what the customer wants & specifications for service quality -Gap 3 is between service quality specifications & delivery of the service -Gap 4 is between service delivery & what the company promises to the customer through external communication -Gap 5 is between cust.s' service expectations & their perceptions of service performance

Discuss the differences between services and goods

Services are distinguished by four characteristics: - Services are intangible performances in that they lack clearly identifiable physical characteristics, making it difficult for marketers to communicate their specific benefits to potential customers - The production & consumption of services occurs simultaneously - Services are heterogeneous b/c their quality depends on elements such as the service provider, individual consumer, location, & the like - Services are perishable in the sense that they cannot be stored or saved. As a result, synchronizing supply w/ demand is particularly challenging in the service industry

Describe nonprofit organization marketing

Several unique characteristics distinguish nonbusiness marketing strategy, including: -A concern w/ services & social behaviors rather than manufactured goods & profit -A difficult, undifferentiated, & in some ways marginal target market -A complex product that may have only indirect benefits & elicit very low involvement -Distribution that may/may not req. special facilities depending on the service provided -A relative lack of resources for promotion -Prices only indirectly related to the exchange between the producer & consumer of services

Discuss global issues in services marketing

The U.S. has become the world's largest exporter of services. Although competition is keen, the U.S. has a competitive advantage b/c of its vast experience in many service industries. To be successful globally, service firms must adjust their marketing mix for the environment of each target country

Reliability

The ability to perform a service dependably, accurately, and consistently

Responsiveness

The ability to provide prompt service

Nonprofit Organization Marketing

The effort by nonprofit organizations to bring about mutually satisfying exchanges with target markets

Inseparability

The inability of the production and consumption of a service to be separated; consumers must be present during the production

Assurance

The knowledge and courtesy of employees and their ability to convey trust

Core Service

The most basic benefit the consumer is buying

Discuss the importance of services to the economy

The service sector plays a crucial role in the U.S. economy - In 2012, service industries accounted for 68 percent of U.S. GDP & 4/5 U.S. jobs - Services have unique characteristics that distinguish them from goods, - marketing strategies need to be adjusted for these characteristics

Heterogeneity

The variability of the inputs and outputs of services, which causes services to tend to be less standardized and uniform than goods

Internal Marketing

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