Services
Marketing Mix
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.
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.
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.
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.
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.
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 ambience 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.
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.
Process – Service process is the way in which a
service is delivered to the end customer. Lets 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.
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.
This is the
service marketing mix (7p) which is also known as the extended marketing mix.
