7 Ps of Services Marketing - The traditional 4 Ps and the additional 3 Ps

7 Ps of Services Marketing

1. 7 P s OF SERVICES MARKETING TRADITIONAL MARKETING MIX 4 P’s of Marketing was created by E.Jerome McCarthy in 1960s. Product, Place, Price, Promotion Additional 3 P’s of Services marketing were developed in the 1990s. Traditional 4 P’s are adequate for product marketing, but inadequate for Services marketing – because: Products are tangible; services are intangible Lack of ability to store services for future sale Greater variability in service delivery Greater variability among service customer’s expectation.

2. 7 P s OF SERVICES MARKETING MARKETING STRATEGY FOR SERVICES STRATEGY SELECTION : S, T, P Segmentation Target Market Selection Positioning STRATEGY EXEUTION 7 P’s of Services Marketing Product Price Place Promotion People Process Physical Evidence

3. 7 P s OF SERVICES MARKETING

4. 7 P s OF SERVICES MARKETING – 1.PRODUCT PRODUCT : A product can be defined as a mix of intangibles and tangibles offered by the marketer at a price . Ex. You are buying a bike from Suguna Automobiles, Coimbatore. You are given the bike and offered free services. The bike is a tangible product and the free services offered is intangible services.

5. 7 P s OF SERVICES MARKETING – 1.PRODUCT PRODUCT : Bundle of utilities; build or produced to satisfy the needs of a certain group of people Tangible or intangible – in the form of goods or services No use of developing a product or service that no one wants to buy Successful companies produce what the customers wants or need at present & future Perfect product provides value for the customer There are differences between products and services

6. 7 P s OF SERVICES MARKETING – 1.PRODUCT SERVICE PRODUCT CONCEPT : Theodore Levitt’s Product Concept Model helps to understand how service can be differentiated.

7. 7 P s OF SERVICES MARKETING – 1.PRODUCT SERVICE PRODUCT CONCEPT : Core Benefit: Core benefit is what the buyer really buying. It is the need or want that is being fulfilled. Examples: when you buy a movie ticket the core benefit is entertainment When you go to gym, you get health and fitness as the services When you buy a airline ticket, you get the core benefit of travelling from one place to other.

8. 7 P s OF SERVICES MARKETING – 1.PRODUCT SERVICE PRODUCT CONCEPT : Basic Service: The intangible service through which the core benefit is called basic service. Example: An airline has aircraft and other infrastructure to implement their service. Low cost airlines Indigo, Air Asia will provide its customers only with basic service.

9. 7 P s OF SERVICES MARKETING – 1.PRODUCT SERVICE PRODUCT CONCEPT : Expected Service: Customers expect to get certain service quality or features when they purchase services . Example: When you go to a hotel, you can expect rest rooms. When you book a flight ticket, you can expect good in-flight food, pleasant service from well trained crews.

10. 7 P s OF SERVICES MARKETING – 1.PRODUCT SERVICE PRODUCT CONCEPT : Augmented Service: An augmented service is enhanced by its provider with added features or services . Example: you order a Non- veg meal in a restaurant. The food is a product. But everything else involved in the experience is the service: the quality of the serving staff (people), how quickly the food is served (process), and the restaurant’s ambiance (Physical evidence) You are booking a chef and his team for preparing food for a marriage function. But he helps you in booking for photography, orchestra, etc. This is augmented service

11. 7 P s OF SERVICES MARKETING – 1.PRODUCT SERVICE PRODUCT CONCEPT : Potential Service: The service firm tries to find out better ways of delighting customers. Example : A hotel unit in a tourist location providing boarding and lodging can expand itself to the residents on sight seeing tours, arrange cultural evenings. A College providing the core benefit of education has the potential to provide great placements, bring out latest developments in its curriculum, developing its alumni into brand ambassadors.

12. 7 P s OF SERVICES MARKETING – 1.PRODUCT SERVICE PRODUCT CONCEPT : What does the customer want from the product/service? What customer needs does it satisfy? What features does it have to meet these needs? Are there any features you have missed out? Are you including costly features that the customer won’t actually use? How and where will the customer use it? What size(s), colour (s), and so on, should it be? What is it to be called? How is it branded? How is it differentiated from your competitors?

13. 7 P s OF SERVICES MARKETING – 2 .PLACE 2. PLACE : - Place refers to the accessibility of the service to customers. Location is the key to successful marketing of services. A customer is often present at the same place where a service is ‘manufactured’ and delivered. (example : Beauty saloon, restaurant, hotel etc.) Customers will choose a conveniently located supplier of services over the best service provider located far away because transportation is not cheap. Position and distribute the product in a place that is accessible to potential buyers The product or service must be available in the right place, at the right time and in the right quantity.

14. 7 P s OF SERVICES MARKETING – 2 .PLACE 2. PLACE : Place also means ways of displaying product to customer groups. This could be in a shop window, but it could also be online. For physical locations, convenience, ambience and facilities matter For online services, a user-friendly website or app is essential The location strategy of D’Mart is one of the reasons for its success. There is an ambience of parking vehicles, near to Bus stand, Airport, situated on the main road etc.

15. 7 P s OF SERVICES MARKETING – 2 .PLACE 2. PLACE Factors to be considered for location and place: What locations do buyers look for your product? How can I locate the finest distribution channels? The placement / location of rival businesses If you are rendering service online, do you offer your services using your business website or online marketplace like amazon , flipkart , ola , uber etc.

16. 7 P s OF SERVICES MARKETING – 3 .PRICE 3. PRICE Price involves determining the right amount customers should pay for the service. Considering various factors like cost, competition, and perceived value is crucial. Pricing strategies, such as discounts, memberships, or packages, can attract different customer segments. The price should reflect the service’s value, ensuring it’s affordable for customers while generating revenue for the business.

17. 7 P s OF SERVICES MARKETING – 3 .PRICE 3. PRICE While deciding on a price, marketers should consider the worth of the services and consider the various aspects of different pricing strategies. What is the price of your service? The cost of the services offered by competitors Does the customer have to adhere to any credit terms? Whether any kind of discount is offered to the customers? Cost of materials, labour and other overhead expenses for rendering the service.

18. 7 P s OF SERVICES MARKETING – 3 .PRICE 3. PRICE The service is only worth what customers are prepared to pay for it. The price need to be competitive Pricing is the only element of the marketing mix that generates revenue ( earns profit) Price helps to position a service in the market The more price, the more value or quality customers expect for their money Existing customers are generally less sensitive about price than new customers. Example : Service in automobiles, hospitals, hotels etc.

19. 7 P s OF SERVICES MARKETING – 3 .PRICE 3. PRICE Difference names for prices in service industries . Interest rates, Processing fees in bank or other loans Fees in education, consultancy Service charge in hotels Nursing charge in hospitals Loading – entry / exit in mutual fund products Brokerage / Commission in sale or purchase of securities Toll in road or bridge usage Premium in insurance Commission in advertising Entry ticket in trade fairs, museums Honorarium for guest speakers Fare for air or bus travels

20. 7 P s OF SERVICES MARKETING – 4.PROMOTION 4. PROMOTION Promotion involves creating awareness and interest in the service . Effective promotional strategies include advertising, social media marketing, public relations, and sales promotions. Clear, compelling messages communicate the service’s benefits, attracting customers and encouraging them to engage with the business. Consistent, targeted promotion increases visibility and builds a strong brand image.

21. 7 P s OF SERVICES MARKETING – 4 .PROMOTION 4. PROMOTION In the service marketing mix, the components of  promotion refers to what is communicated (advertising), who receives it (general public), how that audience is reached (time, frequency, place), and how often it is advertised. Therefore, the selection of media, selection of message and deciding on a promotional cycle (timing and the frequency) are most significant. The selection of medium should be most cost-effective.

22. 7 P s OF SERVICES MARKETING – 4 .PROMOTION 4. PROMOTION The prominent media options available include: Televisions, (Audio-visual) Print media - Newspapers, Magazines or Jounals Hoardings or Billboards Cinema Theatre Commercial Posters Direct mails / Direct marketing Event sponsorship Flyers in newspapers or at shopping centres (inserting pamphlets, brochures ) Personal visits for promotion / sales (Real estates) The purpose and guiding principle of the promotion mix are to raise sales and brand recognition.

23. 7 P s OF SERVICES MARKETING – 4 .PROMOTION 4. PROMOTION Promotion strategy strategy should be created answering to these questions: When and where can you deliver your marketing messaging to your target audience? How do your rivals market their businesses? How do your competitors' marketing strategies affect the ones you choose? When should your product be marketed for maximum effect?

24. 7 P s OF SERVICES MARKETING – 4 .PROMOTION 4. PROMOTION Special considerations in promotion of services Clear focus on the benefits while advertising or communicating Emphasis on tangible elements – appearance of personnel, testimonials, photographs of the facilities etc. Promotion can create tangible metaphors for the intangible service – a logo or a slogan that creates an image in the mind Information can be provided in the communication to train customers ‘how to use’ Example : Maggi , Aachi Briyani Masala (cooking recipe printed on the package) etc.

25. 7 P s OF SERVICES MARKETING – 5 .PEOPLE 5. PEOPLE In addition to generating sales, providing satisfactory customer service helps increase your customers and increase sales. People are defining factors in a service delivery process , since a service is inseparable from the person providing it. Anyone who interacts with customers and represents your brand, even chatbots that aren't people, needs to be an adequately qualified sales expert with good knowledge of your product and services how it can better their lives or resolve their issues.

26. 7 P s OF SERVICES MARKETING – 5 .PEOPLE 5. PEOPLE Various strategies can be implemented to improve customer services, such as: Giving the employees vital information regarding their interests, careers, and recurring clients Teaching salespeople how to solve problems with the product or service Establishing a framework for the sale of goods or services to customers that will make them feel at ease

27. 7 P s OF SERVICES MARKETING – 5 .PEOPLE 5. PEOPLE People are given training in technical skills needed in service jobs. Few corporate service providers training their employees to provide fairly high quality services to customers. For example: The air hostess needs physical stamina, pleasant disposition, and the ability to cope with odd working hours, in return for reasonably high compensation. Teachers require an ability to control large classes, sometimes of unruly students, and fairness to treat the students alike when grading.

28. 7 P s OF SERVICES MARKETING – 5 .PEOPLE 5. PEOPLE Examples continued: The marketing people at telecom service provider require the skill of calling on strangers who are potential customers, and converting them into customers The call centre personnel require a good voice and the ability to answer questions effectively with strangers over the phone. A TV anchor needs to have a personality that gets the desired responses from the guests and the live audience. A radio announcer needs a pleasant & clear voice which people like to hear

29. 7 P s OF SERVICES MARKETING – 6.PROCESS 6. PROCESS Process includes how your goods and services are introduced to the customers. Process involves the procedures, mechanisms, and flow of activities by which the service is delivered. Efficient, customer-friendly processes enhance the service experience, ensuring satisfaction. Streamlining operations, minimizing wait times, and ensuring reliability in service delivery contribute to a positive customer experience and encourage repeat business.

30. 7 P s OF SERVICES MARKETING – 6.PROCESS 6. PROCESS The old process of opening of a bank account was a humiliating experience for the customer. The bank employees hesitated and they consider it as a nuisance. But now-a-days, they are sending their employees to the homes of customers to open a new account in a bank or it is done through online easily. The process of service delivery can be mapped with a flow chart or a ‘service blueprint’ This diagrammatic representation helps to know the time required for each process, overlapping, unnecessary steps or just right. This helps to make improvement in the process of service delivery system through re-engineering. (BPR) Examples : After sales service of a vehicle Loan application process of a bank

31. 7 P s OF SERVICES MARKETING – 7. Physical evidence 7. PHYSICAL EVIDENCE Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. The brochure of a vacation destination can create images about the place, and may end in desire to visit the place. The physical evidence includes the appearance of people, stationery, bills sent to customers, visiting cards, ambience and other tangible evidence may result in creating an impression about the service brand.

32. 7 P s OF SERVICES MARKETING – 7. Physical evidence 7. PHYSICAL EVIDENCE Examples: Hair Saloons have well designed waiting areas often with magazines and plush sofas for awaiting customers. Restaurants, Bakery shops invest heavily in their interior design and decorations to offer a tangible and unique experience of ambience to their guests. Light music is played in some restaurants, live music and dancing may provide a certain king of ambience in hotels . A theme restaurant with an aquarium, waterfall, different seating arrangements may provide one kind of ambience.

33. 7 P s OF SERVICES MARKETING – 7. Physical evidence 7. PHYSICAL EVIDENCE Examples: Theme parks are built around cartoon characters like Mickey Mouse and Donald Duck to attract the children – Disneyworld , Disneyland etc. The seashore parks conducts shows with marine animals like seals, sea lions, dolphins etc. Petroleum outlets created uniform for employees Ambience is different in public transport and private transport Movie theatres create ambience by providing comfortable seats, A/c, surround sound, pleasant interiors etc.

34. DIFFERENCE BETWEEN 7 P’S OF SERVICE MARKETING AND 7 P’S OF PRODUCT MARKETING Aspect Service Marketing Product Marketing Product Focuses on selling intangible services, consumed immediately and cannot be owned. Centers on tangible goods that can be seen, touched, and owned by consumers. Price Uses subscriptions, hourly rates, or bundled services reflecting immediate consumption. Involves cost of production, distribution, and physical attributes like size, quality. Place About accessibility and convenience, often digitally or at a comfortable location. Focuses on physical distribution channels including stores, warehouses, and logistics. Promotion Emphasizes benefits, experience, and value, using testimonials and case studies. Highlights features, specifications, and physical attributes of the product. People People play a crucial role as service providers, impacting customer experience. People are involved in sales and customer service, but their role is less direct. Process Vital to ensure efficient and satisfactory service delivery, often in real-time. Involves manufacturing, distribution, and sales, not immediate service delivery. Physical Evidence Includes the environment and elements that support and enhance the service experience. Relates to the actual product, packaging, and branding elements.