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Marketing 3-03

key terms, definitions,concepts

QuestionAnswer
CHAPTER 12 p. 193 PRICE STRATEGY First,in order to price a service, it is important to define the unit of service consumption. Some services include food & beverages. EX: restaurants charge cust for food & drinks rather than use of table & chairs.
Second,for serv that are composed of multiple elements, the issue is whether pricing should be based on a "bundle" of elements or on each ele priced separately. EX: some cust prefer bundle when they dislike paying extra for baggage or food on an airplane. Alternatively, cust may not want to pay for serv elem they not use. EX: furn stores "unbundle" delivery charges from price if cust can pick up,saving delivery fee.
Marketers should set performance objectives when pricing ea service. 3 objectives are suggested: REVENUE-ORIENTED PRICING focuses on maximizing the sourplus of income over costs. A limitation of this approach is that determining costs can be difficult for many services.
OPERATIONS-ORIENTED PRICING seeks to match supply & demand by varying prices. FOR EX: matching hotel demand to the number of available rooms can be achieved by raising prices at peak times & decreasing them during slow times. PATRONAGE-ORIENTED PRICING tries to maximize the number of customers using the service. Thus, prices may vary with different market segments' aboitlity to pay, & methods of payment(credit) are offered that increase the likelihood of a purchase.
All three objectives probably need to be included to some degree in a pricing strategy. RELATIONSHIP MARKETING IN SERVICES. Many services involve ongoing interaction between the serv organization & the customer, as a meaans of attracting, developing & retaining customer relationships. Relationsip marketing can be practiced at three levels:
LEVEL 1: the firm uses pricing incentives to encourage cust to continue doing business with it. FOR EX: frequent flyer programs are an example least effective in its price-based advantage is easily limitated by other firms. LEVEL 2: This level of relationship marketing also uses pricing incentives but seeks to build social bonds with customers.Level 2 is often more effective than level 1 relationship marketing.
LEVEL 3: the firm again uses financial & social bonds byt adds structural bonds to the formula. INTERNAL MARKETING treating employees as customers & developing systems & benefits that satisfy their needs.
NONPROFIT ORGANIZATION an organization that exists to acheive some goal other than the usual business goals of oprofit, market share, or return on invenstment. NONPROFIT ORGANIZATION MARKETING the effort by nonprofit organizations to bring about mutually satisfying exchanges with target markets.
Nonprofit orgainzations do not seek to make a profit for redistribution to owners or shareholders. Rather, their focus is often on generationg enough funds to cover expenses/ Marketing in nonprofit organizations is unique in many ways-including the setting of marketing objectives, the selection of target markets, the development of appropriate marketing mixes.
TARGET MARKETS three issues relating to target markets are unique to nonprofit organizations. APATHETIC OR STRONGLY OPPOSED TARGETS: private-sect org usually give priority to developing those market segments that are most likely to respond to particular offerings.Nonprofit org moust target those who are strongly opposed to receiving their services
PRESSURE TO ADOPT UNDIFFERENTIALTED SEGMENTATION STRATEGIES: sometimes they fail to recognize the advantages of targeting. other times they are pressured or required to serve the max number of people by targeting the avg user. COMPLEMENTARY POSITIONING: the main role of many nonprofit org is to provide serv,with avail resources, to those who are not adeq served by priv-sect.EX: a univ library may see itself as complementing the serv of public library not than competing with it.
PRODUCT DECISIONS: there are 3 product-related distinctions between business & nonprofit organizations. BENEFIT COMPLEXITY: Nonprofit orgs often market complex behafiors or ideas. EX: the need to exercise or eat right & quit smoking. The benefits that a person receives are complex, long term, & intangible,& are more difficult to communicate to consumers.
BENEFIT STRENGTH: The benefit strength of many nonprofit offerings is quite weak or indirect. INVOLVEMENT: Many nonprofit orgs market products that elicit very low involvement (prevent foroest fires) or very high involvemnet (stop smoking).
Public Service Advertisement (PSA) an announcement that promotes a program of federal, state, or local government or of a nonprofit organization.
Created by: cacox2
 

 



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