Marketing Mix: Expanded Mix and Service Environment

Marketing Mix

• The traditional marketing mix consists of four basic strategic elements: product, price, place, and promotion (4 Ps).

Product

• Defined as anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.
• Key decisions include:
  • Physical good features of the product
  • Quality level
  • Packaging
  • Branding the product
  • etc.

Pricing

• Factors that determine pricing include:
  • Target customers
  • Cost
  • Competition
• Key decisions include:
  • Flexibility
  • Terms of payment
  • Differentiation
  • Discount
  • Allowances
  • etc.

Promotion

• Key decisions include:
  • Promotional blend
  • Sales people
  • Advertising
  • Internet/web strategy
  • Media types
  • Publicity
  • etc.

Place (Convenience)

• Key decisions include:
  • Channel types
  • Intermediaries
  • Outlet locations
  • Transportation
  • Storage
  • Managing channels
  • etc.

Expanded Marketing Mix of Services

• In addition to the conventional 4Ps, services have additional 3Ps that make it 7Ps.
• The additional 3Ps are:
  • Physical evidence
  • People
  • Process

Physical Evidence

• Environment in which the service is delivered.
• Where the firm and customers interact.
• Any tangible components that facilitate performance.
• Communication of the service.
• Key decisions include:
  • Facility design
  • Equipment
  • Signage
  • Employee dress
  • Business cards
  • etc.
• Role of physical evidence:
  • Provides tangible evidence of a firm's service quality
  • Serves as the packaging material for service
  • Communicates the quality of service before consumption
  • Serves as a brand or differentiation tool for the organization

Processes

• Procedures, mechanisms, and flow of activities that take place during the consumption of a service.
• Key issues include:
  • Flow of activities
  • Standardized services
  • Customized services
  • Customer involvement
  • Number of steps
  • etc.
• Role of processes:
  • Brings about belongingness
  • Brings about the real interaction
  • Offers the consumer the opportunity to give inputs to the production process
  • Provides security for the recipient
  • Serves as a record of dealings
  • Repeated buying brings about specialization

People

• All human actors who play a part in the service delivery process and influence buyers' perception.
• Appearance and behavior of both service personnel and customers.
• Key decisions include:
  • Employee recruitment
  • Employee training
  • Motivation
  • Rewards
  • Teamwork
  • Customer education
  • etc.
• Role of people:
  • An extension of tangibles
  • Source of customer loyalty
  • Serves as brand
  • Serves as the service firm
  • Determines quality and customization

This unit covers the traditional marketing mix, physical evidence, service process, people element, and services environment. Evaluate and examine the roles of each in the service environment and how managers respond.