Services and Non-profit marketing | Management Optional Notes for UPSC PDF Download

Introduction

• The marketing process holds immense significance for the success of any company. Marketers employ various marketing practices to attain a competitive advantage. In the global economy, particular emphasis is placed on the service sector within the marketing domain. This emphasis is largely driven by the increasing importance and share of the service sector in the economies of both developed and developing nations. The expansion of the service sector is often viewed as an indicator of a country's economic growth. 
• Services are intangible products that encompass deeds, performances, or efforts that cannot be physically possessed. The primary characteristic is their intangibility, covering activities such as goods rental, modification and repair of client-owned goods, and personal services. Many service-oriented firms prioritize technical expertise, leading to a lag in their utilization of marketing strategies. Additionally, numerous service firms are small in scale, making it challenging to acquire marketing expertise. 
• According to The American Marketing Association, services refer to activities, benefits, and satisfactions offered for sale or provided in connection with the sale of goods. Essentially, services involve activities or a series of activities occurring through interactions between customers and service employees. In well-known theories, Kotler defines services as activities or benefits that one party can offer to another, primarily intangible and not resulting in the ownership of anything. The production of services may or may not be linked to a physical product.

The life of services marketing has undergone three stages:

• The Crawling Out stage (Pre-1980)
• The Scurrying About stage (1980-1985)
• The Walking Erect stage (1986-today)

The Crawling Out Stage (Pre-1980) is a period of high risk. The objective was to prove the right of services marketing to exist.

• The Scurrying about Stage (1980-1985): Main characteristics include noteworthy increase in the interest of practitioners and academics in the case of services marketing, the debate on the uniqueness of services marketing was partly won. The objectives were to reinforce, even further, the argument that, despite similarities, the marketing of services necessitated a different management approach. Outcomes in this period were significant growth of the empirically based knowledge on the special nature of services such as Service quality, Service encounters, Service design and new service development.
• The Walking Erect Stage (1986-2003): In this period, the objective was to conduct empirical research in new areas of inquiry in services marketing. The empirical orientation and rigorousness of research on services marketing increased. New areas of inquiry are empirically investigated such as Customer retention, Relationship marketing, Green issues in services marketing, Branding services, Internationalisation of services, Direct services marketing, Sponsorship in services, and Franchising in services.

Features of a service include

• Intangibility: Services lack a physical existence, making them untouchable, unholdable, untastable, and unsmellable. This characteristic is crucial and distinguishes services from merchandise. It poses a unique challenge for those involved in marketing services, requiring them to associate tangible features with an otherwise intangible offering.
• Heterogeneity/Variability: Each service offering is distinct and cannot be precisely replicated, even by the same service provider. Unlike products that can be mass-produced and homogeneous, services exhibit variability.
• Perishability: Services have a unique quality as they cannot be stored, saved, returned, or resold once consumed. Once provided to a client, the service is entirely consumed and cannot be delivered to another customer.
• Inseparability: This feature indicates that services are generated and consumed within the same timeframe. Additionally, it is challenging to separate a service from the service provider.

Implications of Service Characteristics:

• The theoretical framework demonstrates that services marketing is a major subdivision of marketing, encompassing both business-to-consumer and business-to-business services. It includes marketing various services like telecommunications, financial, hospitality, healthcare, and professional services.

Service Marketing Mix:

• The Service Marketing Mix comprises Product, Price, Place, Promotion, People, Process, and Physical Evidence. Marketing a service requires precision in each of these elements. Managing services is more challenging than products due to the difficulty in standardizing services, influenced by factors beyond the service provider's control.
• Product: In services, the 'product' is intangible, heterogeneous, and perishable. Customization is possible based on customer requirements, but excessive customization may compromise service quality.
• Pricing: Pricing services is more challenging than goods, acting as a marker of perceived quality and playing a dominant role in managing demand.

Unique Elements of Service Marketing Mix:

• People: People are essential in service provision, requiring the recruitment and training of the right staff to gain a competitive advantage. Customers form judgments based on the people representing the organization.
• Process: This evaluates the systems used to deliver the service, fostering customer loyalty and confidence. Clearly defined and competent processes are crucial for consistency.
• Physical Evidence: Physical evidence is the environment where the service is delivered, applicable mainly to retailers. It differentiates a firm from competitors, including the servicescape, influencing customer perceptions and impacting the organization's perceptual plan of the service.

Nonprofit Marketing

• Nonprofit Marketing holds a distinctive position, and its effective approach proves beneficial for society. This type of marketing is linked to the activities and strategies adopted by a nonprofit organization to disseminate its message, solicit donations, and call for unpaid assistance. The realm of nonprofit marketing involves the creation of logos, slogans, and copy, along with the development of a media campaign aimed at portraying the organization to external audiences. In nonprofit organizations, various marketing approaches are employed to enhance the organization's image and reputation in society, helping the public remember the organization and its cause. Marketing strategies play a crucial role in distinguishing one nonprofit from another that may offer similar programs, attracting and retaining donors and volunteers.
• According to Philip Kotler, "Marketing is the function of a nonprofit whose aim is to plan, price, promote, and distribute the organization’s programs and products by keeping in constant touch with the organization’s various constituencies, uncovering their needs and expectations for the organization and themselves, and building a program of communication to not only express the organization’s purpose and goals but also their mutually beneficial want-satisfying products."
• Nonprofit marketing involves the effective use of marketing strategies to further the goals and objectives of nonprofit organizations. This includes various tactics such as advertising, public relations, and fundraising. Additionally, gathering and processing information for decision-making, maintaining relations with governments, board members, donors, and volunteers are integral elements of nonprofit marketing. Nonprofit marketing is undertaken by entities and individuals working in the public interest or promoting a cause without seeking financial gain. It leverages marketing approaches to aid in growth, financial support, and prosperity.
• Nonprofit Marketing involves exchanges, but not necessarily financial ones. Price is not necessarily an indicator of costs or values. Nonprofit organizations can approach marketing similarly to for-profit businesses, identifying their target market, developing marketing materials for that target market, and establishing the objectives of a marketing campaign. The four Ps of marketing—product, place, price, and promotion—are often followed by nonprofit organizations, emphasizing the need to develop a brand image.

Dimensions of Nonprofit Marketing

• Planning: Nonprofit marketers devise plans to assist organizations in achieving their strategic goals.
• Positioning: Becoming widely recognized in society is crucial for nonprofit organizations, as there are numerous opportunities for individuals to contribute to various causes. Competing for donations requires effective positioning in the public's perception.
• Communication: Communicating with various stakeholders, including customers, board members, employees, volunteers, donors, granting organizations, government, other nonprofits, and the communities served, is vital for successful nonprofit marketing. Building relationships with stakeholders is a key aspect.
• Resource Attraction: Nonprofit marketers play a significant role in attracting resources, including donations of time (volunteer staffing) and funds from organizations and individuals.

Major Factors in Nonprofit Marketing

• Branding: A powerful and positive brand image is crucial for nonprofit managers. Branding helps in establishing favorable reputations and distinguishing the organization from others.
• Social Marketing: Many nonprofits aim to influence social change, requiring the use of marketing approaches to raise awareness and encourage healthy behaviors.
• Use of the Internet: Nonprofits leverage the internet for communication, fundraising, volunteer recruitment, online surveys, and distribution of educational materials.

Nonprofit organizations face challenges such as shrinking budgets, donor fatigue, competition among organizations, and increased donor skepticism. Nonprofit marketing, as a management orientation, extends beyond internal operations and programs to include external communications, projecting a consistent image of the organization and influencing external perceptions. A nonprofit organization with a marketing orientation focuses on activities and external communications to convey a consistent image and shape how the external world perceives it.