4.6. The extended marketing mix (7Ps)

Service Marketing Mix – 7 P’s of marketing

The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 P’s as compared to the 4 P’s of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more P’s which are required for optimum service delivery.

The product marketing mix consists of the 4 P’s which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix – the 4 P’s.

The extended service marketing mix places 3 further P’s which include People, Process and Physical evidence. All of these factors are necessary for optimum service delivery. Let us discuss the same in further detail.

1) Product

The product in service marketing mix is intangible in nature. Like physical products such as a soap or a detergent, service products cannot be measured. Tourism industry or the education industry can be an excellent example. At the same time service products are heterogenous, perishable and cannot be owned.

The service product thus has to be designed with care. Generally, service blue printing is done to define the service product. For example – a restaurant blue print will be prepared before establishing a restaurant business. This service blue print defines exactly how the product (in this case the restaurant) is going to be.

2) Place

Place in case of services determine where is the service product going to be located. The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly, a software company will be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area. Read more about the role of business locations or Place element.

3) Promotion

Promotions have become a critical factor in the service marketing mix. Services are easy to be duplicated and hence it is generally the brand which sets a service apart from its counterpart. You will find a lot of banks and telecom companies promoting themselves rigorously.

Why is that? It is because competition in this service sector is generally high and promotions is necessary to survive. Thus banks, IT companies, and dotcoms place themselves above the rest by advertising or promotions.

4) Pricing

Pricing in case of services is rather more difficult than in case of products. If you were a restaurant owner, you can price people only for the food you are serving. But then who will pay for the nice ambiance you have built up for your customers? Who will pay for the band you have for music?

Thus these elements have to be taken into consideration while costing. Generally, service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit mark-up you get your final service pricing. You can also read about pricing strategies.

Here on we start towards the extended service marketing mix.

5) People

People is one of the elements of service marketing mix. People define a service. If you have an IT company, your software engineers define you. If you have a restaurant, your chef and service staff defines you. If you are into banking, employees in your branch and their behavior towards customers defines you. In case of service marketing, people can make or break an organization.

Thus many companies nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction. In fact many companies have to undergo accreditation to show that their staff is better than the rest. Definitely a USP in case of services.

Everyone who comes into contact with your customers will make an impression.

Many customers cannot separate the product or service from the staff member who provides it, so your people will have a profound effect — positive or negative — on customer satisfaction.

–– The reputation of your brand rests in the hands of your staff. They must be

appropriately trained, well-motivated and have the right attitude.

–– All employees who have contact with customers should be well-suited to the role.

–– In the age of social media, every employee can potentially reach a mass audience. Formulate a policy for online interaction and make sure everyone stays on-message.

–– Likewise, happy customers are excellent advocates for your business. Curate good opinion on review sites.

–– Superior after sales support and advice adds value to your offering, and can give you a competitive edge. These services will probably become more important than price for many customers over time.

–– Look regularly at the products that account for the highest percentage of your sales. Do these products have adequate after sales support, or are you being complacent with them? Could you enhance your support without too much additional cost?

6) Process

Service process is the way in which a service is delivered to the end customer. Let’s take the example of two very good companies – Mcdonalds and Fedex. Both the companies thrive on their quick service and the reason they can do that is their confidence on their processes.

On top of it, the demand of these services is such that they have to deliver optimally without a loss in quality. Thus the process of a service company in delivering its product is of utmost importance. It is also a critical component in the service blueprint, wherein before establishing the service, the company defines exactly what should be the process of the service product reaching the end customer.

Many customers no longer simply buy a product or service - they invest in an entire experience that starts from the moment they discover your company and lasts through to purchase and beyond.

–– That means the process of delivering the product or service, and the behaviour of those who deliver it, are crucial to customer satisfaction. A user-friendly internet experience, waiting times, the information given to customers and the helpfulness of staff are vital to keep customers happy.

–– Customers are not interested in the detail of how your business runs, just that the system works. However, they may want reassurance they are buying from a reputable or ‘authentic’ supplier.

–– Remember the value of a good first impression. Identify where most customers initially come into contact with your company - whether online or offline – and ensure the process there, from encounter to purchase, is seamless.

–– Ensure that your systems are designed for the customer’s benefit, not the company’s convenience.

–– Do customers have to wait? Are they kept informed? Is your website fast enough and available on the right devices? Are your people helpful? Is your service efficiently carried out? Do your staff interact in a manner appropriate to your pricing?

–– Customers trying to reach your company by phone are a vital source of income and returning value; but so often they are left on hold. Many will give up, go elsewhere and tell their friends not to use your company – just because of the poor process.

7) Physical Evidence

The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service. Take an example of a restaurant which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice music along with good seating arrangement and this also serves good food. Which one will you prefer? The one with the nice ambience. That’s physical evidence.

Several times, physical evidence is used as a differentiator in service marketing. Imagine a private hospital and a government hospital. A private hospital will have plush offices and well-dressed staff. Same cannot be said for a government hospital. Thus physical evidence acts as a differentiator.

Source - http://www.marketing91.com/service-marketing-mix/

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