December 22, 2014

Service 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.

Service Marketing Mix

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.

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.

Also Read about Marketing Mix

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Comments

  1. poonam thakur says:

    that will be very helpful for me…very nice content.easily understandable

  2. meenakshi chavan says:

    plz can u help me out wid dis dollowings in brief

    1. pricing and promption strategy in hospital services
    2. benchmarking of airlines
    3. branding of insurance services
    4. impact of innovation n technolgy in banking industry and housing n construction industry

  3. Hitesh Bhasin says:

    Dear Meenakshi, You have not mentioned ur email id. I would have liked to help you but the comment column is too small for it. Also, i would suggest a lot of googling for ur questions as it will help u find lots of case studies especially in case of Hospitals and Airlines.

  4. Hello Hitesh, could send me some insight on bank marketing mix? or useful links where I can find it? Thx

  5. Hitesh Bhasin says:

    Dear Paterson, Can you leave me your email id? Or you can ask you question here

    It is my own site and i can answer with leisure over there.
    Regards

  6. Hi Would like to get the updates on service marketing

  7. Hitesh Bhasin says:

    Hey sonam. I m soon gonna start writing on Services marketing. Once i finish with Marketing Management.

  8. this website is very good… it gives very good information what is required… Thank you

  9. hi
    i would be glad if u can help me by briefing about 7ps of services marketing in insurance and banking services.

  10. hi,
    i will be happy if u briefly explain e-marketing issues in marketing mix
    thanx

  11. thanx a ton

  12. Mamt Koundal says:

    I have subscribed but from August i have not received a single mail from u….
    atleast abt the Topics u r writing.. so that i can read thru dem
    plss help for the same
    Thanks

  13. bhavani iyer says:

    the article is awesome learned nicely about 7 ps thanks a lot

  14. after reading ur articles, i came 2 know.. how easy marketing is.

  15. Hamideh says:

    Hi,
    First of all, Thanks for your worthy information.
    But I have a question, is there any model for ranking the marketing mix for different positioning strategy?

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