A service is an intangible product involving a deed,
performance, or an effort that cannot be physically possessed.
Dominant component is intangible.
Includes rental of goods, alteration and repair of goods owned by
The extent of services in the economy
US is the worlds first service economy.
More than 75% of the workforce in the private sector is
employed in the service industry.
Accounts for more than $3bn in output and contribute 60% of GNP.
60% of services ar
Special Considerations for Service Marketing
Must consider how the intangible/inventory/inseparable/inconsistency
component effect the service.
Prior to purchase, much service promotion must rely on performance
attributes which can only be m
Non Profit Marketing
Conducted by organizations and individuals that operate in the
public interest or that foster a cause and do not seek financial
Companies Finding Consumers resisting Price Boosts
Different examples of products that have elastic demand and inelastic
In the long run, cannot survive by selling at or below cost. Need to
take into account all costs, costs associated wi
Factors Affecting Pricing Decisions
There is considerable uncertainty regarding the reaction to price on the part
of buyers, channel members, competitors etc.
It is also important in market planning, analysis and sales forecasting.
Organizational and Mark
Non Profit vs. Profit Oriented Marketing
Similar in many respects. Some basic differences include:
Combination of goals, ie,
raise $250,000 from government grants
increase client usage
find cure for disease
change public attitudes
raise $750,000 fro
Cost oriented pricing:
$ amount or % added to cost. Need to know the desired margins etc. Easy
Cost calculated then a % added.
Costs, overhead may be difficult to determine.
Establish the # of units to produce, calcula
Demand Oriented Pricing:
Determined by the demand for the product.
Determine the demand first,
calculate the mark up needed for each channel member,
then determine how much is available (cost ceiling) to produce
Need to estimate the amou
Services cannot be stockpiled. Need to avoid excess unsatisfied
demand and excess capacity leading to unproductive use of
Handout.Bikers Give Ski Resort Summer Lift
Discusses the seasonal demand patterns of ski resorts, and what ski