Do you know what consumers have to say to when their needs are not met? “I won’t complain, I just won’t come back” [Brown & Williamson, Tobacco ad]. In this game of no second chances, it is important to plan a successful product offering. That’s when we reach out to our good old friend- 7Ps of Marketing Mix to guide us.
The term Marketing Mix was originally developed by Neil Borden in the year 1949. It was E. Jerome McCarthy who gave the 4Ps of the Marketing Mix. After the emergence of the service economy, the 4Ps were promoted to 7Ps of Marketing Mix. People normally refer to them as the Service Marketing Mix.
With years, theories become old and people develop newer frameworks. But the Marketing Mix has been in the market for almost 70 years now. And still the young marketers, even today, are taught this as the alphabets of marketing.
During this reading, I want you to keep your awareness as a consumer awake at all times. We will learn the 7Ps of Marketing Mix with examples from our own lives and some from the Industry.
We will try to orient ourselves to the services sector, which was the prime reason behind the adoption of 7Ps of Marketing Mix.
What is Marketing Mix?
Before I start talking myself, I would like to ask you some fundamental questions.
Why are Organizations in Business? Don’t shy away from admitting that their sole purpose is to make profits.
When do businesses make those profits? Its when their product or service sells, actually sells better than others.
How are businesses being able to sell better? When the customer connects to their product or service.
And when does the customer connect to a business? When the needs are met and the customer gets reasons to come back to the business.
Keeping that in mind, we can now define the Marketing Mix as the set of guiding variables that help a firm to develop products and services keeping the target market in mind.
It is a combination of elements that help a firm to:
- Develop the right product/service
- Reach the right customer
- At the right time
- Make the customer feel right
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What Should You Care About the Marketing Mix?
We sure will learn about the 7Ps of the marketing mix in this article. But why is it necessary for us in the first place?
Future Product Managers: It helps you to channelize your product development keeping in mind the customer’s needs. As product managers it is important to always keep ears open to customer needs and eyes open to innovation.
Future Area Sales Managers: It is important that your product is made available to your customers conveniently and at all times. Place and the distribution network are very important to keep serving your customers.
Future Advertisement/Campaign Managers: Its very important that the target customers know about your product. Promotion either for new customers or the existing customers is a very important tool for campaign managers.
This list is not exhaustive but is very much indicative of the fact that this tool is a lever in the hands of marketers. They can play around with the various elements and direct their offerings to targeted segment/desired positioning.
The Marketing Mix traditionally had 4Ps- Product, Place, Price and Promotions. But these were found to be inadequate as far as services were considered which led to the extended Marketing Mix or the 7Ps of service marketing.
But what was the inadequacy? How are services different from products?
Also Read: 4Ps of Marketing
Characteristics of Services
There are certain characteristics which differentiate marketing of services from typical products. Let’s list down a few of those:
A product can actually be felt- they are physically present. Various features of the product like color, shape and style can trigger emotions. The customers actually know what they are buying.
But that’s not the case with services. It doesn’t become evitable until the customer has actually leveraged it once.
Service firms are always trying to ‘tangiblize’ a service. For instance, take a look at the two images below:
The first picture is a menu from an Asian Restaurant. They have placed such colorful realistic pictures on their menu, its as if you can see your plate of food before you actually order it. In the second picture, you see the Japanese practice of showcasing plastic replicas of their dishes in order to entice the customer.
Don’t you think, these are absolutely genius ways to add senses and emotions to the hospitality services!
Just try and think about it! Can you clearly distinguish the sequential cycle of manufacturing, marketing, selling and then consumption of services? No, right!
Services have no distinction based on time and space. The service provider plays the twin role of production as well as delivery of services.
If you think through, the customer is usually a part of the production process of a service. Think of an airplane journey. Aren’t you the part of the service production process? This makes customers equally involved and, in that case, poor task executions by customers may lead to an overall bad service experience.
Services cannot be inventoried. Like you can store products, its impossible store services for later sale.
For an example, the seats in airplanes are service provided by the airline industry. But it may happen that the flight is not fully booked. These empty seats perish as soon as the plane takes off. This is simply lost revenue.
A product is manufactured with standard operating procedures and is passed through various mechanized and manual quality inspections. Any particular product will look the same even after millions of units of production.
That is not the case with services. You may be visiting the same restaurant everyday but each occasion may turn out to be a unique experience. There are various external factors that govern your experience. On one day you may get your favorite seat, on the other you may have to wait in queue for the same services.
Service marketing is a seemingly complex task. Which is why, by now, I have begun to see the need for expanding the Marketing Mix.
7Ps of Marketing Mix
Because of the outlined differences between products and services and their implications, 7Ps of Marketing Mix were developed. The additional 3 Ps- People, Process and Physical Evidence, try to solve the deficiencies of the traditional Marketing Mix.
In simple terms, what is being sold to the customer is the product. It is the ‘Core’ which is offered to the customer.
Service products are intangible which means that the customer has to try the service once before selecting or rejecting a particular provider.
Like I said, this certainly has its advantages as the service provider can offer more customized services to its customer. This is one point that marketers should actually leverage for their advantage.
There are various things that have to be kept in mind while designing a service package, most of which coincide with how a product is conceptualized:
- The target market
- Product range
- Product quality
- Features and benefits
- Sizing and packaging
- Add-ons like guarantees and customer service
Just have a look at the kind of options that even a traditional industry like banking provides. That’s how firms orient themselves to their target markets and provide products and services that satisfy their needs.
Pricing is in itself a very tricky element among the 7Ps of Marketing Mix. Price can make or break a product/service launch. The first principle of pricing keeps in mind the value of the product or service that the customer perceives.
Product pricing is somewhat logical in the sense that you are able to see tangible material goods infront of you and you can, with some help figure out the approximate cost of the product.
But don’t you think it is quite difficult for you to assign value to services. Just think about it! When you go for a haircut, can you place a price on everything that the barber does and come up with the right price. Your price benchmarks are majorly your past experiences or how the competitors are pricing their service.
Pricing of services is not as objective as pricing of goods. Companies base their prices keeping in mind customer’s perception of the brand and also competitor’s pricing strategy.
There is this one good article that I found on pricing of services which I would like all of you to go through once: check it here.
Place is all about making your products or services available to right customers, at the right place at the right time. Place is a very critical element in the 7Ps of marketing mix.
For most routine services, customers want to stick to their locality and avoid travelling to far off places. It’s just for those highly specialized services like visiting a doctor for which you will take the inconvenience of travelling kilometers.
Just think of a scenario! What would you think if you went on a vacation and your resort was situated amidst the chaos of the city market? For the girls out there, it would be one hell of a shopping spree but Hey! It would be a complete mood spoiler for that Vacay-mode you would be in.
It’s important to take into consideration where your customers will be looking for your products or service, where do they spend most of their time and then decide your place or medium of distribution.
Intensive distribution which is reaching out to masses becomes somewhat difficult for services as services generally have a sense of personalization attached to them. But technology has surely brought about a change in terms of mobile banking and internet services.
Exclusive distribution is preferred for products and services that are sought after by customers for their uniqueness. Services like surgery and exclusive dining are made available through limited places.
Selective distribution in services can be best explained with the franchise model. McDonald’s is now made available in even Tier-II cities only because of this strategy.
Promotion in simple terms is the tactics used by firms to make their customers aware about their product, build their brand image and retail their customers.
Promotion is again a very strategic element because on one hand you want your target customers to know about your product or service but on the other hand you are under the pressure of The Invisible Hand- Promotion spend restrictions. Market segmentation helps a great deal in knowing who your customer is and then you can effectively promote to them.
What do you think is Aashirvad trying to do here? Look at the product! It’s an advertisement in a famous women’s magazine. Now think who is the person responsible for taking buying decisions for this product? I know you have your answers.
The communication mix comprises of advertisements, sales promotions, direct selling, publicity, etc. The question is how is it unique for promotion of services. We have already established that services are intangible which poses a greater risk for customers to be doubtful about services.
Marketers need to assign tangible clues to their services so that the customer can rely on them. And we’ll see how they are able to achieve that. Just think of FedEx, what’s the first thing that comes to your mind. In my mind it’s a FedEx truck or the FedEx Airline carrier.
Now just think of what this means. FedEx is a courier service which needs to deliver goods at the right time. Hasn’t it created an image of fast mobility which makes you rely on the brands promises.
With that we conclude our traditional marketing mix elements and now let’s figure out the extended elements.
Services are generally characterized by frequent interaction of the creator and the consumer. Think about the beauty and self-care industry, hospitality sector or the banking industry. All of them require frequent customer-producer interactions.
It is expected from all employees to be trained on both fronts:
- Technical or core skills: Any compromise on employee skills not only damages the brand image but also leads to quality variations and service heterogeneity.
Customers lose their belief in brands whose front-end employees are not technically sound.
Just think of a situation when you go to buy a laptop at a retail store of one of the best brands in India. But you have an encounter with an employee who has to google features of the laptops. Will you trust him or the store with your money?
- Interpersonal Skills: With services, it’s very difficult to separate the service and the provider.
It’s the front-end employees like showroom sales men or receptionists who play the customer facing role even before the service experience can begin for your customer. Employee behavior can actually make or break a brand name.
Therefore employing, training and retaining the right set of people becomes imperative for the success of a service business.
Use marketing frameworks like these to solve business case studies with ease
For the delivery of quality and timely services, it is important to design a robust process.
Think about that vacation when you booked a hotel online and you reach the place in the early hours of morning. You are in a completely new city and have heavy baggage with you. It’s a struggle in itself to find the hotel and then when you reach there you have to wait for some time in the lounge because apparently your room has just been vacated.
Let’s picture another scenario. You are about to reach your destination in the early hours and you get a call from your hotel at night. They give you a contact of the person who would come to pick you up and additionally ask about your breakfast preferences.
Damn! I don’t know about you but I will be ecstatic. You are escorted by the person in the morning to the hotel and you get straight to your room because the hotel had kept your room already neat.
That is the importance of a streamlined process of your service delivery. Businesses have to keep in mind that the process of service delivery is designed not for provider’s convenience but keeping the customer in mind.
With that we come to the last element in the 7Ps of Marketing Mix.
Physical evidence is important because of the intangible nature of services. The customer has to get some tangible clues in order for him to buy your services.
Cleanliness, dress of staff, wall color, website experience, packaging, brochure designs are some of the many factors in determining the customers decision towards buying that service.
I found this interesting table in one of the business research reports online. Just have a look at the multitude of variables that affect a customer’s perception.
What do you think about the two images above? You should have spotted some differences in their setting.
The first picture is more elegant, chic and calls out for that fine date with your partner. The other one is a completely different social setting. Its more fun, bold, noisy in a good way and calls out that gang of yours to sit here and talk tirelessly.
That’s how marketers play with physical evidences to communicate to the customer, the services they wish to deliver.
Marketing strategy has to be used if businesses want to succeed in reaching to their customers faster than their competitors can get. And the 7Ps of marketing mix help them do just that.
Marketing helps a business to make their products or services aligned to the customer’s needs and make them reach their customers at the right place and at the right price.
The 7Ps of service marketing are as follows:
Product: It is the ‘Core’ which is offered to the customer.
Price: Matching your pricing with the customer’s perceived value of the product or service
Place: Making your product or service available to the customer
Promotion: Making your target customers aware about your products and services and retaining them
People: Having the right set of people inclined to serving the customers with their skills
Process: Streamlined process flow in order to reduce quality variations and provide seamless services to customers
Physical Evidence: Attaching tangible clues to services in order to communicate and satisfy your customers