Table of Contents:-
- Meaning of 7Ps of Marketing Mix
- Definition of 7Ps of Marketing Mix
- Principles of Service Marketing Mix
- Traditional Marketing Mix/4 P’s of Marketing
Meaning of 7Ps of Marketing Mix
The unique characteristics of services make developing a 7 Ps of marketing mix very challenging. The tangible nature of the product enhances a customer’s ability to make a buying decision about it. The purchase decision is easier because customers can see the products, they can smell, touch, or taste the products before purchase. Because services are intangible, service marketers must help their customers to visualise them. By applying the principles of product or service planning, pricing, promotion, and distribution in various ways suited to the nature of the services they provide, they engage in the process. As with products, the purpose is to satisfy their customers.
Marketing a service requires two very distinct strategies.
When companies construct an effective marketing plan, they take into account the 7 Ps of marketing mix, which represents the combination of crucial and interconnected marketing elements. In traditional terms, people know the marketing mix as the four Ps of marketing: product, price, place, and promotion. However, growth in the service sector has led to the development of an expanded 7 P’s of service marketing. The marketing mix for services extends the marketing mix for products and goods by adding a few more elements.
Definition of 7Ps of Marketing Mix
According to Borden, “The Marketing mix refers to the appointment of efforts, the combination, the designing and the integration of marketing elements into a program or mix which, based on an appraisal of the market forces will best achieve an enterprise at a given time”.
According to Stanton, “Marketing mix is the term used to describe the combination of the four inputs which constitute the core of a company’s marketing system – the product, the price structure, the promotional activities and the distribution system”.
Services marketing is a branch of marketing in which building and maintaining a profitable relationship with the service customer for the long term is necessary for every organisation. Since the nature of services ultimately defers the nature of goods, this task becomes more challenging in the case of service marketing.
In this way, the marketing mix used for services should be stronger than the marketing mix used for goods. In services marketing, companies use some additional elements of marketing, such as people, physical evidence, and process, in addition to the traditional marketing mix, which includes the 4Ps of marketing. The marketing mix includes additional elements known as the augmented and expanded marketing mix.
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Principles of Service Marketing MixÂ
Some proven maxims aimed at helping and guiding the leaders of services marketing are as follows.
Principles of Service Marketing Mix
- Customer Value
- Speed
- Knowing Customer Needs
- Staff is for Support
- Focus on Core Competencies
- Everyone is a Stakeholder
- What Gets Measured Gets Done
1) Customer Value
No matter how elegantly designed the service offering is, how massive the research effort that defined it is, or how expensive the development is, the customer does not care. The customers only care about what the benefits are to them. The customer defines value. A useful exercise in helping an organisation discover where it currently adds the most value is to identify the most profitable customers.Â
2) Staff is for Support
Everyone whose work connects with the customer has marketing responsibility. They should have goals and measures that put accountability into their responsibility. If people’s tasks are not contributing to getting or keeping customers (adding value), they are contributing to waste.Â
3) Speed
In services marketing, companies apply speed most dramatically in rapidly prototyping new offerings. Rapid prototyping means more iteration, more tests, and more milestones to evaluate and make decisions. Rapid prototyping directly impacts long-term product and service profitability.
4) Focus on Core Competencies
All organisations have limited resources. Core competencies are to do what is done best, develop a few critical capabilities to world-class levels, and outsource everything else. The focus on core competencies is bringing about significant business changes. A company can be either a supplier or a customer to a business but now everything is shades of gray, and the boundaries are blurred. The connectivity between supplier-customer-competitor-partners is formed from the specific realities of the situation. Most organisations should strive to make this “alliance-building capability” a core competency.
5) Knowing Customer Needs
Issues, expectations, wants and needs of customers are too complicated to be learned about from standard surveys. The solution is not to take things for granted but to gather new information regularly. One proven way to keep in touch with the voice of the customer is to employ a programme of customer visits with cross-functional teams systematically.Â
6) Everyone is a Stakeholder
Customers, suppliers, and employees are all stakeholders in the marketing process. Everyone should be aware of the marketing strategy and understand their role and responsibility in achieving marketing objectives. Marketing to people inside the organisation is just as important as marketing to people outside the organisation. Just like customers, they must see the value of marketing initiatives for themselves. It may be more important in the high-tech world where many service organisations must educate and persuade sometimes reluctant product management to re-think their business model.
7) What Gets Measured Gets Done
This is the marketing principle that turns the other principles into reality- what gets measured gets done. If people have clear personal expectations of these principles and know that consequences are attached, the probability of their occurring goes up immensely. Principles form a framework in which services marketing can operate effectively. The value must be defined for both key customers and the organisation. Everyone must be accountable and responsible for marketing.
Traditional Marketing Mix/4 P’s of Marketing Mix
Marketing mix describes the specific combination of marketing elements used to achieve an organisation’s/individual’s objectives and satisfy the target market’s needs.
Traditional Marketing Mix Elements is made up of four P’s:
Marketing Mix four P’s:
- Product
- Price
- Place
- Promotion
- Target Market
Traditional Marketing Mix Elements is made up of four P’s:
1) Product
Marketers have found three levels when they develop the product part of the marketing mix for services. The ‘core’ level aims to satisfy the customer’s essential needs while the tangible group manages the product’s appearance. The augmented story involves the addition of supplementary services to the primary offering.
The core level, catering to primary benefits, and a secondary story, including tangible and augmented service levels, can condense these three levels into two. The core level deals with the service offering while the secondary service level deals mostly with service delivery. For example, the core service of a restaurant is to serve good food to the customers while the secondary service includes providing them with a good ambience.
2) Pricing
Pricing for services is not the same as pricing for goods, and there are several reasons for this. Services can be differentiated based on their price, as a higher price is generally associated with better quality. Another differentiating factor between services and goods as far as pricing is concerned, is the cos component involved. For a service, the fixed cost is high, but the variable costs are low when compared to a product. For example, the marginal cost involved in letting out a room in a hotel to a customer is negligible while the fixed cost of establishing and maintaining the hotel is high. Therefore, when customers pay for a service, the service provider directs a large portion of the money towards covering their fixed costs.
3) Place/ Distribution
In services, “place” refers to how easy it is to access the service. Due to the inseparability of services, companies produce and consume them in the same place. This inseparability of services makes it impossible for service providers to have the service at a place where the costs are low and sell to them at a place where there is a high demand for it. Therefore, there is no distribution channel for service marketing, or if at all there is one, it is very small.
4) Promotion
People who use services feel more unsure or at risk compared to those who buy products because services are intangible or not physical like products. Service providers should aim to promote their services to eliminate the elements of this perceived risk. This can be best achieved by facilitating and promoting positive word of mouth marketing publicity, developing strong brand loyalty, offering a trial use of service for the customers and finally, by managing advertising and public relations effectively to communicate a positive message to the customers.
