12–12 Chapter 12 ♦ Services and Nonprofit Organization Marketing
The memo should include the following: definition of internal marketing (treating employees as customers and
6.2 Return to www.zagat.com and investigate what the site offers. How does Zagat propose to help companies do
internal services marketing?
Zagat has a corporate sales division that publishes special editions of its products for business clients to give to their
7.1 What issues would you have to think about in going global with the new service that you developed in the
questions above? How would you change your marketing mix to address those issues?
Answers will vary depending on what kind of service was developed previously. However, some issues that
8.1 Form a team with two or three classmates. Using the promotion strategies discussed in the nonprofit section
of this chapter, develop a promotion strategy for your college or university.
Four promotional strategies for dealing with the unique features of services are:
• stressing tangible cues
Supplemental Exercise: Group Work
Review and Applications
Review and Application Questions 4.1, 5.1, 7.1, and 8.1 lend themselves well to group work. For those activities,
divide the class into small groups of 4-5 people. Students from each group should read the question and then use
their textbooks, or any work that was completed previously, to perform the exercise. Then each group should discuss
or present its work to the class.
APPLICATION EXERCISE
Purpose: The purpose of this exercise is for students to think experientially about how difficult or easy it is to rate
products and services according to their quality.
Stacia Wert-Gray (University of Central Oklahoma)
Gordon T. Gray (Oklahoma City University)
ASSESSING SERVICE QUALITY
Students sometimes do not understand why service quality is difficult for consumers to assess. This exercise
illustrates that physical goods are generally easier to evaluate (for quality) than services.
Recognizing that most product offerings are a blend of physical goods and services, each student is asked to
position seven products on a scale ranging from “100% physical good” to “100% services.” The exercise provided
generally looks something like this:
When groups are finished, the instructor should fill in the class worksheet with input from the groups. The class
worksheet often looks something like the following:
100% physical good 100% service
C .J.…………O……………D……H……………….…………E……T
Each group is then asked to position the same product offerings on the following scale, which addresses how easy it
is to assess the quality of each product.
During the class discussion after completion of the two exercises, the instructor may emphasize at least two
important aspects of service quality and consider the implications for marketing practitioners.
1. Assessing the quality of physical goods is usually easier than assessing the quality of products consumers
consider services.
ETHICS EXERCISE
1. Is this practice ethical?
One point that affects this issue is who actually owns the information once it is given out. Some say that an
individual owns his or her data no matter where it is disseminated and has a right to privacy in areas that stretch
2. Does the AMA Statement of Ethics have anything to say about this issue? Go to
Statement of Ethics contains that relates to this situation.
Although the AMA Statement of Ethics does not specifically mention selling of information, it does state that,
MARKETING PLAN EXERCISE
Continue your strategic marketing plan (and complete your Part 3 Marketing Plan Worksheet on your companion Web
CASE STUDY
MinuteClinic: Serving the Sick where they Shop
1. Describe how MinuteClinic puts the following promotion strategies to work for them: stressing tangible cues,
using personal information sources, creating a strong organizational image, and engaging in post-purchase
communication. What else could they try?
Student answers will vary. A tangible cue is a concrete symbol of the service offering. The educational materials
that each patient is given at the end of the visit are tangible, for example. A personal information source is someone
Chapter 12 ♦ Services and Nonprofit Organization Marketing 12–15
2. Are MinuteClinic’s services customized or standardized for patients? Do they incorporate any elements of
mass customization?
Customized services are more flexible and respond to individual customers’ needs. They also usually command a
higher price. The traditional doctor’s office, for example, tends to be more customized because it handles any kind
3. In what way did MinuteClinic demonstrate reliability and responsiveness during the flu outbreak in
Minnesota? How did it impress customers with tangible physical evidence that the clinics cared about them?
MinuteClinic demonstrated its ability to administer large numbers of vaccines when the flu hit Minnesota hard in
2007. It managed its inventory better than traditional doctors’ offices because it had the electronic records system. It
4. How important has MinuteClinic’s place (distribution) strategy been to the company’s success? Which
elements does MinuteClinic focus on with its marketing mix? Why?
MinuteClinic’s place (distribution) strategy has been the key to the company’s success. Distribution strategies for a
service organization like MinuteClinic must focus on issues such as convenience, number of outlets, location, and
LESSON PLAN FOR VIDEO
Company Clips: Kodak – Reinventing the Mix
You probably think of Kodak as selling only products. In fact, the company has an entire division, the Graphic
Communications Group, dedicated to delivering service solutions to business customers. Mark Webber is vice president
of worldwide sales partnerships for Kodak’s digital printing solutions group, which provides services to the b–to–b
(business-to–business) market. In this video, he explains how Kodak creates both digital and analog printing solutions
for a wide variety of clients and how the company is taking advantage of new technology to meet evolving customer
demands.
1. Would you describe Kodak’s services as customized or standardized? Why?
2. Describe Kodak’s services mix.
3. Outline Kodak’s pricing strategy for its services.
12–16 Chapter 12 ♦ Services and Nonprofit Organization Marketing
Student’s answers may vary. Kodak’s pricing strategy seems to be a mix of revenue– and patronage-oriented pricing
Supplemental Exercise: Video
Company Clips
Pre-Class Prep for You:
• Preview the Company Clips video segment for Chapter 12. This exercise reviews concepts for LO1, LO2, LO5, and
LO6
• Review your lesson plan.
• Make sure you have all of the equipment needed to show the video to the class, including the DVD and a way to
Video Review Exercise Activity
• Warm-up
o Begin by asking students to make a list of the top ten companies or institutions with which they engage in
exchanges (or, buy from).
o Discuss what percentage of the companies on students’ lists is service-oriented. What are the implications
for the economy?
• In-Class Preview
o Review Exhibit 12.4, Core and Supplementary Services for a Luxury Hotel. Ask students “What other
questions in mind while viewing the video.
• Follow-up
o Have students revisit the Web site for Kodak’s graphic division (see Pre-Class Prep). Ask them to write a
Supplemental Exercise: Class Activity
Nonprofit Organizations and Their Many Publics
Nonprofit organizations serve several publics. Have student’s name 5 nonprofit organizations. They should then
determine the respective publics of those organizations. After that has been done, break the class into groups. Have each
Chapter 12 ♦ Services and Nonprofit Organization Marketing 12–17
GREAT IDEAS FOR TEACHING CHAPTER 12
Kay Blythe Tracy, Gettysburg College
SERVICE LEARNING AS A MARKETING PROJECT
Service learning benefits both the community and the students. This service learning project allows marketing
students to put what they are learning in class into practice, and to see some of their ideas actually implemented, while
Course Outcomes
Each student consulting group completes a written marketing research report for which they collect primary data on a
research question important to their client. Findings are utilized in developing a marketing plan, which is provided to the
Client Responsibilities
For this project, potential clients (local not-for-profit agencies) are contacted and asked to participate. The client provides
a one page write-up with information about what the agency does, for preliminary assessment by the students. A
representative of the agency comes to class and does a brief presentation (limited to five minutes), covering what the
Student Responsibilities
Before enrolling in the course, students are advised that it is a service learning experience, which will require a
higher commitment of time and effort on their part than the standard marketing course. The syllabus indicates that course
assignments will be tied to client service organizations’ needs, and that the project requires a tolerance for ambiguity,
adjustment, change, and group work.
Record Keeping
On their initial visit, clients are given a folder with project information. Clients and the student consulting groups keep
logs (blank forms are provided), to ensure that a reasonable level of interaction is maintained. Clients are contacted by
12–18 Chapter 12 ♦ Services and Nonprofit Organization Marketing
mail about mid-semester, a “just keeping in touch” letter. Clients are reminded about the presentation date and time by
letter about three weeks prior to the presentation. After the presentation, both clients and students are asked to complete a
service learning assessment form.
Time Line
Week 1: explanation of project (expect some few students to drop
when they hear the details.)
Week 2: selection of student consulting groups; handouts of client information; clients’ presentations in class
Week 3: two free class periods for group on-site visits
Summary
We are fortunate in having a service learning center on campus, which helps with setting up the clients initially.
We also have college transportation available if needed, but it has not been necessary to use it. The emphasis on practical
Allan C. Reddy, Valdosta State University
A LIVE-PROJECT FOR SERVICES MARKETING COURSE
Teaching the Services Marketing course can be an interesting and rewarding experience with a live class project included
along with the typical lecture, test, and term paper format. A project that involves student participation invariably creates
more enthusiasm about the course among the students. Also, it cultivates a group spirit (camaraderie) in them.
As part of the learning process, students in my Services Marketing course evaluate two similar service
establishments in the area. For convenience, we choose any two identical restaurants in the area, for example, Red
Chapter 12 ♦ Services and Nonprofit Organization Marketing 12–19
As stated earlier, this mini-project is both entertaining and educative, and it helps to cultivate a group spirit in
the class (of 20 or more students). The students eat out together (the student pays for his/her food) to evaluate two
identical restaurants (preferably chains). Also, it helps students to have a hands-on experience in setting objectives for
the measurement, developing scales of measurement, applying a method of measurement, and analyze and interpret the
service, hospitals, and so on).
Jacqueline K. Eastman, Valdosta State University
NONPROFIT MARKETING PLAN PROJECT
Marketing professors like to give their students the opportunity to do “real world” projects, especially in a capstone
undergraduate marketing course or an MBA marketing strategy course. Working with for-profit businesses can be
problematic though for a variety of reasons: (1) students are not given enough information by the firm to address issues
thoroughly; (2) students are not taken seriously by firm or not given enough of the managers’ time; (3) competitors, who
may even donate to the university, may get upset with other businesses getting free advice; and (4) students may feel
they are doing the grunt work for a potential paid consulting project for their professor.
One way to give the students the needed experience in creating a marketing plan while avoiding the above
problems is to work with nonprofit organizations. One’s local United Way Director may be an excellent resource for
steering Marketing professors to those nonprofit organizations who are willing to work with students and have more of a
I. Executive Summary (Synopsis and major aspects of the marketing plan)
II. Situation Analysis (Examine the environment)
SWOT Analysis
A. Internal Strengths and Weaknesses (recognized by customers
(both those who use the service and donors and critical
B. Monitoring and evaluating performance
VII. Financial Projections and Budget
A. Delineation of Costs
B. Estimates of sales (donations) and revenues
12–20 Part 3 ♦ Product Decisions – Solutions
Part 3 – Solutions
MARKETING MISCUES
McAfee Virus Protection Update Crashes Computers Worldwide
1. What is the role of quality assurance in McAfee’s product development process?
Quality assurance should be an integral component of McAfee’s product development process since a faulty
2. Describe McAfee’s customer service recovery process.
• Faulty product removed from McAfee’s download servers within hours of its discovery
• 36 hours after the faulty product release, McAfee VP posts an apology
CRITICAL THINKING CASE
Prestige Brands, Inc: Transforming the Business
3. What role can acquisitions play in building a product portfolio?
At Prestige Brands, acquisitions played a critical role in the development of the company’s product portfolio.
4. Outline the product line depth, product mix width, and individual product items at Prestige Brands.
Part 3 ♦ Product Decisions – Solutions 12–21
Eye & Ear Care is five deep:
Skin Care is ten deep:
Cough/Cold/Allergy/Sinus is five deep:
House & Home is five deep:
The company also has two brands that do not fit easily into any of the major product categories: