7 P's Of Service Marketing

Marketing mix is the set of important internal elements that make up an organization’s marketing programme. The marketing mix concept is a well-established tool used as a structure by marketers. It can be defined as the elements organizational controls that can be used to satisfy or communicate with customers. The phrase ‘marketing mix’ was first used by Neil H. Borden. The concept had its genesis in the classic work of James Culliton on the management of marketing costs. Borden suggested twelve marketing mix variables in the context of manufacturers. Borden’s concept of marketing mix was given due recognition in marketing theory and the concept of marketing mix was accepted as the set of marketing tools that a firm uses to pursue its marketing objectives in the target market, influenced by specific environmental variables.

It was McCarthy who summed up the twelve elements of Borden’s marketing mix into 4Ps - product, price, place (i.e. distribution), and promotion. He even clarified that the customer is not a part of the marketing mix, rather, he should be the target of all marketing efforts. The activities in service marketing are different , and often do not fall in the conventional marketing mix (4Ps) classification, though many marketing concepts and tools used by goods marketers hold good in services with some change in focus and importance. The traditional marketing mix became inadequate for service industries because of the following reasons:

• The concept of marketing mix as such was developed for manufacturing industries and was more oriented to deal with goods marketing situations.

• Marketing practitioners in service sector found that it did not address their needs.

• Due to differences in characteristics of physical products and services, marketing models and concepts had to be developed in direction of the service sector.

Keeping in view the inadequacy of conventional marketing mix to address the service situations, it needs to be modified and broadened. A seven Ps framework for services has been proposed. These elements of marketing mix for services are product, price, place, promotion, people, physical evidence and process. It is important to elaborate these Ps in order to have an understanding of a specific combination of these elements to arrive at the marketing strategy for service firms. A detailed account of each of these elements of marketing mix is as follows:

1. Product

A product is an overall concept of objects or processes which provide some value to customer; goods and services are subcategories which describe two types of product. Thus, the term product is frequently used in a broad sense to denote either a manufactured good or a service. In fact, customers are not buying goods or services - they are really buying specific benefits and value from the total offering. So, the most important issue in service product is what benefits and satisfaction the consumer is seeking from the service. From the point of view of a restaurant’s manager, the restaurant simply provides food. But, the customers coming to the restaurant may be seeking an ‘outing’ - an atmosphere different from home, relaxation, entertainment or even status. The marketing of services can be a success only if there is a match between the service product from the customer’s view point and the supplier’s view point. To find this match it is desirable to analyze the service at the following levels:

a) Customer benefit concept

The service product which is offered in the market must have its origin in the benefits which the customers are seeking. But, the problem is that customers themselves may not have a clear idea of what they are seeking, or they may find it difficult to express or it may be a combination of several benefits and not a single one. Over a period of time, the benefits sought may also change. This change in customer may come about by a satisfactory or unhappy experience in utilizing the service, through increased sophistication in service use and consumption, and changing expectations. All these make the issue of marketing a service product more complex.

b) Service concept

Using the customer benefits as starting point, the service concept defines the specific benefits which the service offers. At the generic level, the service concept refers to the basic service which is being offered. A center for performing arts may offer entertainment and recreation. But, within this broad framework, there can be specific choice paths for satisfying the entertainment objectives, such as, drama, musical concerts, mime, poetry recitation, dance, etc. Defining the service concept helps in answering fundamental question - ‘what business are we in?’

c) Service offer

After defining the business in which we are operating, the next step is to give a specific shape and form to the basic service concept. In the case of center for the performing arts, the service concept is to provide entertainment. The service offer is concerned with the specific elements that will be used to provide entertainment; drama, music, mime, dances. In the category of musical concerts the choice may be vocal or instrumental, with vocal whether light or classical, Hindustani, Carnatic or Western. While these represent the intangible items of the service offer, the physical infrastructure of the center, in terms of its seating capacity, seating comfort, quality and acoustics, provision for air-conditioning, snack bar and toilets are the tangible items. The tangible aspects can be controlled by offering the best possible benefit, but the quality and performance of the actors, singers, musicians cannot be controlled.

d) Service forms

In what form should the services be made available to the customers is another area of decision making. Should all the shows of the center be available in a package deal against an annual membership fee or seasonal ticket? Should there be daily tickets with the consumer having the freedom to watch any one or more performances being staged on that particular day? Should each performance have a separate entrance ticket, with a higher priced ticket for a well-known performer? Service form refers to the various options relating to each service element. The manner in which they are combined gives shape to the service form.

e) Service delivery system

When we go to bank to withdraw money, we either use a cheque or a withdrawal slip in which we fill all the particulars and hand it over to the dealing assistant, who after verifying the details, gives us money. The cheque or withdrawal slip and the dealing assistant constitute the delivery system. In case of airlines, the airplane, pilot, crew members, airport, etc. are the elements of delivery system. The two main elements in a delivery system are the people and the physical evidence. The competence and public relations ability of a lawyer represents the ‘people’ component, while his office building, office door, letter head, etc., are all elements of the ‘physical evidence’ component. The physical evidence components have also been called facilitating goods or support goods. These are the tangible elements of the service and they exert an important influence on the quality of the service as perceived by the consumers. Delivering an intangible at a level consistently is a complex issue. The experience in two flights of the same airline is not the same. The visit to a bank on two occasions brings different experiences. The consumer’s service experience is, as such, a result of provider-customer interaction, atmosphere, emotional stress, anxieties, surprises, etc. It is because of these delivery factors (varying at different points of time) that no two customer experiences are identical. This variability of experience is attributable to the inability of the service firms to deliver the intangible uniformly.

Service firms must learn to manage intangibles. They need to go beyond the technical skills of employees or the tangible output. Service levels should be set in accordance with the desired customer satisfaction. The answer to ‘what customer expects’ should be sought. And it is not an easy answer because the subjective nature of the customer expectations often vitiates the whole exercise.

2. Price

Pricing is one factor that has received much less attention in service firms. Pricing decisions in services are approached in a not-very-sophisticated manner. The role price plays in the marketing strategy is lesser known in service firms than in manufacturing firms. Even in Britain, the United States and some other developed economies where more people are employed in the provision of services than in the direct production of material goods, the marketing of services in general, and their pricing in particular, are relatively neglected aspects of management studies.

Though price is one of the Ps in the marketing mix of firms, its use as a purposive marketing tool has been limited to a few marketers. Most marketers tend to adopt a passive approach and commit many mistakes in pricing their goods and services. “The most common mistakes are these: pricing is too cost-oriented; price is not revised often enough to capitalize on market changes; price is set independent of the rest of marketing mix rather than as an intrinsic element of market positioning strategy, and price is not varied enough for different product items and market segments”. Unlike in manufactured goods, where price has one common name across a wide range of goods, such as, fruits, clothes, computers, cars, etc.; price in services goes by different names. The services are diverse. The extent of their diversity can be gauged by the names by which the price is called in services. In following table, some terms referring to price in different services are listed. Almost every service has its own price terminology.

Pricing is important because it has a direct bearing on sales and profits of an organization. Therefore, price cannot be determined in isolation without keeping in mind the sales it would generate and the profit it would earn. Generally, a trade-off is observed between the sales and the profit. A lower price of product or service is capable of generating higher sales at low profit per unit. Similarly, a high price would result in greater profit margins but the product or service may not sell that much. Pricing arithmetic is not simple. There are a number of factors that influence the pricing decisions of a firm. It is important for a firm to consider the customers, the marketing offer, competition, legal framework, and social and technological environment while setting the price.

Pricing methods and practices tend to vary widely in service industries. Unlike goods which may bear similarities in processes, competition, output, raw material, labour, etc.; service industries are laden with diversity. On the spectrum of variety and uniqueness; services are unique, both in their own character and in their difference from one another. This service character does not allow standardization of pricing across various service categories. A household service supplier, banking company, hairdresser, transporter, etc.; because of their unique character, tend to consider their pricing in a variety of ways.

In determining the prices of services, the one characteristic which has great impact is their perishability and the fact that fluctuations in demand cannot be met through inventory. Hotels and airlines offering lower rates in off-season and lower telephone charges for outstation calls after peak hours are examples of how pricing strategy can be used to offset the perishable characteristics of services.

Another characteristic of services that creates a problem in price determination is the high content of the intangible component. The higher the intangibility, the more difficult it is to calculate cost and greater the tendency towards non-uniform services, such as fees of doctors, management consultants, lawyers, etc. In such cases, the price may sometimes be settled through negotiation between the buyer and seller.

On the other hand, in services such as dry cleaning, the tangible component is higher, and the service provided is homogeneous. It is easier to calculate the cost on a unit basis and have a uniform pricing policy. In general, the more unique a service is, the greater the freedom to fix the price at any level. Often the price may be fixed according to the customer’s ability to pay. In such cases price may be used as an indicator of quality.

The third characteristic to be kept in mind while determining prices is that in many services, the prices are subject to regulations, either by the government or by trade associations. Bank charges, electricity and water rates, fare for rail and air transport in India are controlled by the government. In many other cases, the trade or industry association may regulate prices in order to avoid undercutting and maintain quality standards. International air fares are regulated by international agreement of airlines, sea freight fares are regulated by shipping conferences. In all such cases, the producer has no freedom to determine his own price.

The two methods which a service organization may use to determine prices are cost-based pricing and market-oriented pricing. In the former, the price may be regulated by the government or industry association on the basis of the cost incurred by the most efficient unit. Such a pricing strategy is effective in restricting entry and aiming at minimum profit targets. The market-oriented pricing may either be a result of the competition or customer oriented. In case of competition-oriented pricing, the price may be fixed at the level which the competitor is charging, or fixed lower to increase market share. Customer-oriented pricing varies according to the customer’s ability to pay. The pricing tactics that may be used to sell services are:

a) Differential or Flexible Pricing

It is used to reduce the ‘perishability’ characteristic of services and iron out the fluctuations in demand. Differential price implies changing different prices according to:

• customer’s ability to pay differentials (as in professional services of management consultants, lawyers);

• price time differentials (used in hotels, airlines, telephones where there is the concept of season and off-season and peak hours); and

• Place differential used in rent of property-theatre seat pricing (balcony tickets are more expensive than front row seats) and houses in better located colonies command higher rent.

b) Discount Pricing

It refers to the practice of offering a commission or discount to intermediates such as advertising agencies, stock brokers, and property dealers for rendering a service. It may also be used as a promotional device to encourage use during low-demand time slots or to encourage customers to try a new service (such as an introductory discount).

c) Diversionary Pricing

It refers to a low price which is quoted for a basic service to attract customers. A restaurant may offer a basic meal at a low price but one which includes no soft drink or sweet dish. Once the customer is attracted because of the initial low price he may be tempted to buy a drink or an ice-cream or an additional dish. Thus, he may end up buying more than just the basic meal.

d) Guaranteed Pricing

It refers to pricing strategy in which payment is to be made only after the results are achieved. Employment agencies charge their fee only when a person actually gets a job, a property dealer charges his commission only after the deal is actually transacted.

e) High Price Maintenance Pricing

This strategy is used when the high price is associated with the quality of the service. Many doctors, lawyers and other professionals follow this pricing strategy.

f) Introductory Pricing

It is one in which an initial low price is charged in the hope of getting more business at subsequently better prices. The danger is that the initial low price may become the price for all times to come.

g) Offset Pricing

It is quite similar to diversionary pricing in which a basic low price is quoted but the extra services are rather highly priced. A gynecologist may charge a low fee for the nine months of pregnancy through which she regularly checks her patient, but may charge extra for performing the actual delivery and post-delivery visits.

h) Competitive parity pricing

Prices are set on the basis of following those set by the market leader.

i) Value based pricing

Prices are based on the service’s perceived value to a given customer segment. This is a market driven approach which reinforces the positioning of the service and the benefits the customer receives from the service.

j) Relationship Pricing

Prices are based on considerations of future potential profit streams over the lifetime of customers. Relationship pricing follows closely the market oriented approach of value-based pricing but takes the lifetime value of the customer into account.

3. Place

In order to bring the products to the customer, the marketer has to work with distribution channels that are the interdependent set of organizations involved in the process of making the goods or services available. Service marketers, like goods marketers, also have to handle distribution channel problems. They too, have to make their services available to target customers without which marketing cannot take place. Because of intangibility of services, they cannot be stored, transported and inventoried. Similarly, because of inseparability, that is, in case of services production cannot be separated from selling, services must be created and sold at the same time. These characteristics of services make distribution strategy more complex and difficult.

There are three critical issues that must be sorted out while evolving the distribution channels for a service:

a) Location of the service

Location is concerned with the decisions a firm makes about where its operations and staff are situated. The importance of location for a service depends upon the type and degree of interaction involved. When the customer has to go to the service provider, location becomes very important. For a service business such as a restaurant, location may be one of the main reasons for patronage. In this type of interaction, service providers seeking growth can consider offering their services at more than one location. Where the service provider can go to the customer, site location becomes much less important provided it is sufficiently close to the customers for good quality service to be received. In some circumstances, the service provider has no discretion in going to customer as certain services must be provided at the customer’s premises. This is the case with a wide range of maintenance services such as, lift repair, cleaning services etc. However, when the customer and service organization transact at arm’s length location may be largely irrelevant. Customers are not concerned with where the physical locations are of suppliers of services such as electricity, telephone or insurance. There are three important questions that would help service provider in deciding where to locate service:

• How important is the location of the service to the customers?

• Is the service, technology - based or people-based?

• How important are complementary services to the location decision?

The selection of location and site for a service depends on a number of factors and trade offs among benefits and costs. The following table depicts the critical factors affecting the location decisions; vary from one service to another.

b) Channels through which services are provided

The second decision variable in the distribution strategy is whether to sell directly to the customers or through intermediaries. Traditionally it has been argued that direct sales are the most appropriate form of distribution for services. Whilst this form of distribution is common in some service sectors, e.g., professional services, companies in other areas of the service sector are increasingly seeking other channels to achieve improved growth and to fill unused capacity.

Many services are now being delivered by intermediaries and these can take a variety of forms. The broad channel options for services are direct sales, agent or broker, sellers’ and buyers’ agents, franchises or contracted service deliverers, etc. Following table provides an illustrative list of the intermediaries who sell services.

c) How to provide service to maximum number of customers

The third decision variable in the distribution strategy is how to provide the service to a maximum number of customers in the most cost-effective manner. Some of the innovations in the area are:

• Rental or leasing-leasing or rental offers an easy solution for companies which want to expand and diversify but do not have the necessary resources to buy the required plant and machinery. This trend is now also becoming popular in services. Today we have the concept of time-sharing for holiday resorts.

• Franchising-franchising is the granting of rights to another person or institution to exploit a trade name, trade mark or product in return for a lump-sum payment or a royalty. In service industries franchises operate in the area of hotels, restaurants, car rentals, fast food outlets, beauty parlors, travel agencies, couriers, computer education, etc.

• Service integration - recent times have also witnessed the growth of an integrated service system. Hotels offer local tours and airlines offer holiday resort services. Travel agencies offer ‘package tours’ in which they take care of all formalities such as visa, foreign exchange, reservations, local travel, etc.

All these trends highlight the importance of using innovative methods to overcome the inherent characteristics of service products which make their distribution a complex affair.

5. Promotion

The promotion element of the services marketing mix forms a vital role in communicating the positioning of the service to customers. Promotion adds significance to services; it can also add tangibility and help the customer make a better evaluation of the service offer. The fundamental difference which must be kept in mind while designing the promotion strategy is that the customer relies more on subjective impressions rather than concrete evidence. This is because of the inherent nature of services. Secondly, the customer is likely to judge the quality of service on the basis of the performer rather than the actual service. Thirdly, since it is difficult to sample the service before paying for it, the customers find it difficult to evaluate its quality and value. Thus, buying a service is a riskier proposition than buying a product. So, the service marketers must design a promotion strategy which helps the customers overcome these constraints.

George and Berry have identified six guidelines for services advertising which really are applicable to most elements of the communication mix. These apply to a wide range of service industries, but not to all of them, because of the heterogeneous nature of services.

1) Provide tangible clues- A service is intangible in the sense that a performance rather than an object is purchased. Tangible elements within the product surround can be used to provide tangible clues, e.g. seating comfort in aircraft.

2) Make the service understood- Services may be difficult to grasp mentally because of their intangibility. Tangible attributes of the service can be used to help better understand the service offered, e.g. credit cards.

3) Communication continuity- This is important to help achieve differentiation and present a unifying and consistent theme over time. McDonalds and Disney logo provide good examples of such continuity.

4) Promising what is possible- Service firms need to deliver on their promises. If a promise such as fast delivery cannot be consistently met, it should not be made at all, e.g. Domino’s Pizza.

5) Capitalizing on word of mouth- The variability inherent in services contributes to the importance of word of mouth. Word of mouth is a vitally important communication’s vehicle in services, as evidenced by the way we seek personal recommendations for lawyers, accountants, doctors, bankers, etc.

6) Direct communications to employees- In high contact services communication should be directed at employees to build their motivation, e.g. cabin crew of airlines.

The promotion mix of services include the following elements:

a) Advertising

It is any kind of paid, non-personal method of promotion by an identified organization or individual. The role of advertising in services marketing is to build awareness of the service, to add to customer’s knowledge of the service, to help persuade the customer to buy, and to differentiate the service from the other service offerings. Relevant and consistent advertising is therefore, of great importance to the success of the marketing of the service. Advertising has a major role in helping deliver the desired positioning for the service. Since the core product is intangible it is difficult to promote, and therefore, service marketers frequently choose tangible elements within the product for promotion. Thus, airlines promote the quality of their cuisine, seat width, and the quality of their in-flight service. Certain services such as entertainment, transportation, hotel, tourism and travel, insurance, etc. have been advertising heavily in newspapers, magazines, radio, TV to promote greater usage and attract more customers. However, certain service professionals such as doctors and lawyers had rarely used advertising as a means of increasing their clientele. But, this situation is changing and one can occasionally see an advertisement in the daily newspaper giving information about the location and timings that a particular doctor is available for consultation. These advertisements may also carry the message ‘Honorary doctor to the president of India’ or ex-director of a prestigious medical college, etc. Such messages help create a positive image and credibility.

b) Personal selling

Personal selling has a vital role in services, because of the large number of service businesses which involve personal interaction between the service provider and the customer, and service being provided by a person, not a machine. The problem with using personal selling to promote services is that in certain types of services, the service cannot be separated from the performer. Moreover, it is not a homogeneous service in which exact standards of performance can be specified. In such situations, personal selling implies using an actual professional rather than a salesman to sell the service. A firm of management consultants may send one of its consultants for soliciting new business. This kind of personal selling is certainly effective but also very expensive. One way of making personal selling more cost effective is to create a derived demand by tying up with associated products and services. A management consultant may associate with a bank, so that the bank recommends his name as a consultant to any new entrepreneur coming for a loan. A chain of hotels may team up with an airline to offer a concessional package tour. The other way is to maintain a high visibility in professional and social organizations, getting involved in community affairs and cultivating other professionals so as to maximize personal exposure and the opportunities for getting work from new sources. Personal selling has a number of advantages over other promotion mix elements, such as,

• Personal contact- Three customer contact functions have been identified; selling, servicing and monitoring. These personal contacts should be managed to ensure that the customer’s satisfaction is increased or maintained at a high level.

• Relationship enhancement- The frequent and sometimes intimate contact in many service businesses provides a great opportunity to enhance the relationship between the seller/service provider and the customer.

• Cross selling- The close contact frequently provides the opportunity for cross-selling other services. The sales persons are also in a good position to communicate details of other services which they may offered to customers.

c) Sales promotion

In the case of services, the sales promotion techniques which are used are varied and various in number. Traditionally, sales promotion has been used mainly in the fast moving consumer goods market. However, in the recent past we have seen a trend for many service firms to use sales promotion. Sales promotion tools are aimed at these audiences:

• Customers - Free offers, samples, demonstrations, coupons, cash refunds, prizes, contests and warranties.

• Intermediaries- Discounts, advertising allowances, cooperative advertising, distribution contests and awards.

• Sales force- Bonuses, awards, contests and prizes for best performer.

A number of activities can be undertaken which aim at providing incentive to encourage sales. A doctor may charge lesser amount as fee on subsequent visits to encourage patient’s loyalty, a car mechanic may offer a guarantee for repairs undertaken up to three months, a chartered accountant may offer his services free for the first two visits to allow the customer to evaluate his work.

In services, sales promotion techniques are also used to offset their perishability characteristic, e.g., family discounts offered by hotels in off-season in which two children under twelve are allowed free of charge. Sales promotion helps to overcome the problem faced by customers in evaluating and judging the quality before making the purchase, thus, it reduces the risk associated with the purchase.

d) Publicity

It is unpaid for exposure which is derived by getting coverage as a news or editorial item. It is possible to get publicity when the service which one is offering is unique and, therefore, newsworthy, by holding a press conference in which offered services can be associated with some issues of greater social relevance or by involving the interest of the newspaper or its staff in covering the service. The important point about publicity is that the choice of newspaper, magazine and journal should be correct. The vehicle which is chosen must be credible and enjoy a reputation of being trustworthy. A wrong choice of media vehicle will result in adverse publicity.

e) Word of mouth

One of the most distinctive features of promotion in service businesses is the word of mouth communications. This highlights the importance of the people factor in services promotion. Customers are often closely involved in the delivery of a service and then talk to other potential customers about their experiences. Research points to personal recommendations through word of mouth being one of the most important information sources. Where people are the service deliverers personal recommendation is often the preferred source of information. Thus, word of mouth can have a more important impact than other promotion mix elements in a number of services, including professional and health care services. Positive or negative word of mouth communication will then influence the extent to which others use the service. However, negative experiences tend to have a greater impact than positive experiences. Customers who are dissatisfied tend to tell more than twice as many people of their poor experiences as those who are satisfied relate good experiences.

6. People

In services, ‘People’ refers to all human actors who play a part in service delivery and thus influence the buyer’s perceptions; namely, the firm’s personnel, the customer, and other customers in the service environment. All of human actors participating in the delivery of a service provide cues to the customer regarding the nature of the service itself. How these people are dressed, their personal appearance, and their attitudes and behaviors all influence the customer’s perception of the service. If the service personnel are cold and rude, they can undermine all the marketing work done to attract the customers. If they are friendly and warm, they increase customer satisfaction and loyalty. Employee behavior is often an integral part of the service product. This is not true in a manufacturing operation, where employee behavior may affect product quality, but is not a part of the product.

People constitute an important dimension in the management of services in their role both as performers of services and as customers. People as performers of service are important because, a customer sees a company through its employees. The employees represent the first line of contact with the customer. They must, therefore, be well informed and provide the kind of service that wins customer approval. The firm must recognize that each employee is a salesman for the company’s service. If these employees are not given training in how to go about face-to-face customer contact, the entire marketing effort may not prove to be effective. The importance of customers in services stems from the fact that most services imply active and involved customer-organization interface. In many service situations, customers themselves can also influence service delivery, thus affecting service quality and their own satisfaction. Customers not only influence their own service outcomes, but they can influence other customers as well. People can be subdivided into:

a) Service personnel

Service personnel are important in all organizations but more so in an organization involved in providing services. The behavior and attitude of the personnel providing the service is an important influence on the customer’s overall perception of the service and he can rarely distinguish between the actual service rendered and the human element involved in it. Customer contact is very important concept in services, which refers to the physical presence of the customer in the system. The extent of contact refers to the percentage of time a customer ought to be in the system out of the total time it takes to serve him. The low contact services include bank, post offices or retailing and the high contact services include hotels, educational institutions, restaurants and hospitals. Services with high contact are more difficult to control and manage because a longer customer contact is more likely to affect the time of demand, and nature of service and its quality; whereas, in low contact services such contact has much less impact on the service. Therefore, the high contact personnel must be dexterous in public relations and inter-personal skills, and the low contact personnel must have high technical and analytical attributes. The quality and performance of service personnel can be improved through:

• Careful selection and training of personnel

• laying down norms, rules and procedures to ensure consistent behavior

• ensuring consistent appearance; and

• Reducing the importance of personal contact by introducing automation and computerization wherever possible.

b) Customers

Customers are important because they are a source of influencing themselves, being actively involved in service delivery, and other customers as well. In case of doctors, lawyers, consultants one satisfied customer will lead to a chain reaction, bringing in his wake a number of other customers. So, its an important task of service marketers to ensure complete satisfaction of the existing customers. The kind of customers that a firm attracts exerts an important influence on prospective customers. The prospective customer may feel attracted towards the organization e.g., club, restaurant, school, because it has his type of customers or the customer may turn away if he perceives the existing customers to be a kind with whom he would not like to associate.

7. Physical evidence

It refers to the environment in which service is delivered and where the firm and customer interact, and any tangible components that facilitate performance or communication of the service. The physical evidence of service includes all of the tangible representations of the service such as, brochures, letterhead, business cards, report format, signage, equipment, etc.

Packaging importance stems from the fact that it is what comes in between the product and the customer’s eye. The product package is a visual representation of the whole marketing effort. The customer judgment and evaluation are often based on the product packaging.

Physical evidence is to a service, what the packaging is to a product. In services, the product itself being intangible, the need is to tangibles it as far as possible. Thus, physical entities can be successfully employed to describe the service product and its distinguishing qualities. Since the potential customers form impressions about the service organizations on the basis of physical evidence, like building, furniture, equipment’s, stationery and brochures, it becomes imperative that the marketers manage the physical evidence in a manner that reinforces the proposed position and image of the organization.

Cleanliness in a doctor’s clinic, the exterior appearance and interior decor of a restaurant, the comfort of the seating arrangement in a cinema hall, adequate facility for personal needs at the airport, all contribute towards the image of the service as perceived by the customer. The common element in these is that they are all physical, tangible and controllable aspects of a service organization. There may be two kinds of physical evidence:

a) Peripheral evidence

It is actually possessed as a part of the purchase of service but by itself is of no value. An airline ticket, cheque book, or receipt for a confirmed reservation in a hotel is examples of peripheral evidence. A cheque book is of value only if customer has money in the bank, without that it is of no significance. Peripheral evidence adds on to the value of essential evidence, such as writing pad, pen, match box, complimentary flowers and drinks, etc. in a hotel, which customer may take away. Such evidence must be designed keeping in mind the overall image which the organization wishes to project and the reminder value of the evidence in its ability to remind the customer about the organization.

b) Essential evidence

Whereas the peripheral evidence is possessed and taken away by the customer, the essential evidence cannot be possessed by the customer; the building, its size and design, interior layout and decor, logo, etc. of the organizations are constituents of essential evidence. The essential evidence is a very critical input in determining the atmosphere and environment of the service organization. Physical evidence can be used to build strong association in the customers’ minds and service can be differentiated from the competitor’s similar offering. By making the service more tangible and making it easier for the customer to grasp the concept of the service, marketers can create the ideal environment for the service offering.

8. Process

Process in services refers to the actual procedures, mechanisms, and flow of activities by which the service is delivered- the service delivery and operating systems. In a service organization, the system by which customer receives delivery of the service constitutes the process. In fast food outlets the process comprises buying the coupons at one counter and picking up the food against that at another counter. The process of a delivery function which can be compared with that of operations management implies the conversion of input into the finished product. But, in a service organization, there is no clear cut input or output. Rather, it is the process of adding value or utility to system inputs to create outputs which are useful for the customers.

The process by which services are created and delivered to the customer is a major factor within the services marketing mix, as services customers will often perceive the service delivery system as part of the service itself. Thus, decisions on operations management are of great importance to the success of the marketing of the service. In fact, continuous coordination between marketing and operations is essential to success in most services businesses. Identification of process management as a separate activity is a prerequisite of service quality improvement. The importance of this element is especially highlighted in service businesses where inventories cannot be stored. Through the introduction of automatic teller machines (ATMs) banks have been able to free staff to handle more complex customer needs by diverting cash only customers to the ATMs. If the processes supporting service delivery cannot, for example, quickly repair equipment following a breakdown or provide a meal within a defined period, an unhappy customer will be the result. This suggests that close cooperation is needed between the marketing and operations staffs who are involved in process management. By identifying processes as a separate marketing mix element, its importance to service quality is duly recognized.

References

• https://www.businessmanagementideas.com/service-marketing/what-is-service/20967

• https://www.yourarticlelibrary.com/marketing/service-marketing-definition-features-and-problem-faced-in-marketing-services/32336