Service – An intangible product involving a deed, performance, or effort that cannot be physically possessed; Services have six distinguishing characteristics: Intangibility, Inseparability of Production and Consumption, Perishability, Heterogeneity, Client-based relationships, and Customer contact
Service Quality – Customers’ perceptions of how well a service meets or exceeds their expectations
Nonprofit Marketing – Marketing activities conducted to achieve some goal other than ordinary business goals such as profit, market share, or return on investment
Service and Nonprofit Marketing Summary
The emphasis placed on understanding the marketing of services and nonprofit organizations, the topics under discussion in this mini-lecture, has rapidly increased in recent years. Statistics identify the importance of services in the study of marketing today. “More than one-half of new businesses are service businesses, and service employment is expected to continue to grow. These industries have absorbed much of the influx of women and minorities into the workforce.” (Pride and Ferrell, p. 419) A significant emphasis has been placed on the marketing of nonprofit organizations. What was once seen as a self-marketed concept, nonprofit organizations today are under pressure to establish proactive marketing programs that not only identify the good, service, or idea marketed, but to also establish a positive image within a community or positive perception in the minds of consumers. Hospitals, schools, and charitable organizations comprise three of the most common nonprofit marketing industries.
An example highlights the challenges certain nonprofit organizations relying on charitable donations face. The American Red Cross has been criticized for its response to the natural disaster brought about by hurricane Harvey in 2017. Specific criticisms leveled at the Red Cross, and the organization’s responses to these criticisms, are included in the following article:
“Red Cross faces criticism over Hurricane Harvey relief distribution,” CBS News, November 28, 2017.
Although this criticism can be important in furthering the improvements of operations for the Red Cross organization, the criticism has potentially a greater impact in terms of marketing this organization. The Red Cross relies on charitable donations which it uses to supply aid and needed resources in times of disaster. But to obtain these charitable donations, the Red Cross (and other humane organizations such as the Salvation Army) must maintain a positive image in the minds of consumers. Without this positive image, organizations such as the Red Cross might find it more difficult to convince individuals to respond in times of disaster and need.
Discussion Question #1 – How can a nonprofit charitable organization rebuild its image in the wake of severe criticism? What approach or action should a nonprofit charitable organization take to create a positive image in the minds of potential donors? Many nonprofit charitable organizations often do not possess a physical good to present to the public and must convey the importance of the services they provide. Hence, what can be utilized to regain the public’s trust or to re-establish a positive company image?
A second area of increasing importance in services marketing, especially when that importance is measured in dollars spent or budgeted, is sports marketing. The billions of dollars being utilized today in the sports marketing area include expenditures for promotion at sporting events, promotion during broadcasts of sporting events, sponsorships for teams, stadiums, and arenas, sports celebrity endorsement contracts, and a host of other significant outlay options.
Due to the proliferation of sports in the global economy today, one of the biggest challenges for any organization seeking to be involved in a sports related marketing venture is to determine which sport or sports can provide the best return on an investment. An increasing number of global organizations are deciding to utilize any number of sponsorship options to gain access to their stated target markets. But how much sponsorship is too much? The article linked below indicates that, although it often seems sport sponsorships have overrun sports venues, there remain a myriad of options available for logo or brand placement.
Pinsker, Joe (2016), “Is There Room for Sports to Get Even More Commercialized?” The Atlantic, June13, 2016.
Discussion Question #2 – Has sponsorship gone too far? It is a simple question that is on the minds of many sports marketing researchers today. As stated in the above article, and as displayed in any sports venue today, sponsorships have nearly overtaken the importance of the actual sporting event taking place. Are the positive outcomes associated with sponsoring events, teams, individual players, or venues enough to overcome the increasing displeasure that many consumers have today for overbearing event sponsors? Or have consumers become numb to the amount of sponsorship dollars being spent and the amount of visual sponsor recognition on display at most sporting venues? Additionally, will the current economic instability in the United States impact the utilization of sports sponsorships in the United States? [Feel free to use your own opinions, opinions of family members or opinions of friends in addition to any research you find on this subject to validate or justify your response(s).]