Institute of Management Studies, Dehradun SESSION: 2010-2011
Institute of Management Studies, Dehradun SESSION: 2010-2011
DEHRADUN
SESSION: 2010-2011
A
PROJECT REPORT ON
CERTIFICATE
I hereby declare this is to certify that project reports titles 7P’S OF MARKETING MIX
has been prepared and submitted by SUMIT BHAUGUNA ( I-D NO: MB1OB61) for the
partial fulfillment of MBA Course affiliated to Uttrakhand Technical University under
my supervision and guidance.
INTERNAL GUIDE
H.O.D
MBA
IMS, DEHRADUN
ACKNOWLEDGEMENT
I feel pride and privileged in expressing my deep sense of gratitude to all those who
have helped me in presenting this assignment.
Sincere thanks to all my colleagues and last but not the least to the librarian.
CONTENT
1) .INTRODUCTION
2. ) PRODUCT
a} service package
b} augmented package
c market communication of the service offer
d develop service offering
3) PRICE
A} minimum price
B} penetration price
C} economy price
D} psychological price
E} product line price
4). PLACE
A} channel decision
B} type of channel intermediaries
5} promotion
Promotion objectives
6 .PEOPLE
A} Training
B} Customer service
7 ) PROCESS
8 ) PHYSICAL EVIDENCE
MARKETING MIX
• The tools available to a business to gain the reaction it is seeking from
its target market in relation to its marketing objectives
• 7Ps – Price, Product, Promotion, Place, People, Process, Physical
Environment
• Traditional 4Ps extended to encompass growth of service industry
Potential Service
The service package:
The package concept of service product suggests that what you offer to the market is a
bundle of different services, tangible and intangible, but there is a main or substantive or
core service and around it are built the auxiliary or peripheral or facilitator services. It is
important to note that facilitating services are mandatory and if these were left out, the
entire service would collapse. In the service package there are yet other type of services
called supporting services. The basic difference between the 2 is that supporting services
don’t facilitate the consumption of core services but are used to increase the value and
thus differentiate it from competition
e.g. in a 500 room hotel the core service is lodging and room service, bellboy services are
facilitating services and health club , car rental are support services. However it may not
always be possible to draw a line of distinction between facilitating and support services.
For e.g. in a typical city hotel business center might be the support service but in a
business and convention hotel the same service would be facilitating service
Economy Pricing.
This is a no frills low price. The cost of marketing and manufacture are kept at a
minimum. Supermarkets often have economy brands for soups, spaghetti, etc.
Price Skimming.
Charge a high price because you have a substantial competitive advantage. However, the
advantage is not sustainable. The high price tends to attract new competitors into the
market, and the price inevitably falls due to increased supply. Manufacturers of digital
watches used a skimming approach in the 1970s. Once other manufacturers were tempted
into the market and the watches were produced at a lower unit cost, other marketing
strategies and pricing approaches are implemented.Premium pricing, penetration pricing,
economy pricing, and price skimming are the four main pricing policies/strategies. They
form the bases for the exercise. However there are other important approaches to
pricing.
Psychological Pricing.
This approach is used when the marketer wants the consumer to respond on an emotional,
rather than rational basis. For example 'price point perspective' 99 cents not one dollar.
Promotional Pricing.
Pricing to promote a product is a very common application. There are many examples of
promotional pricing including approaches such as BOGOF (Buy One Get One Free).
Geographical Pricing.
Geographical pricing is evident where there are variations in price in different parts of the
world. For example rarity value, or where shipping costs increase price.
Value Pricing.
This approach is used where external factors such as recession or increased competition
force companies to provide 'value' products and services to retain sales e.g. value meals at
McDonalds.
Number of intermediaries at each level (e.g. how many retailers in Southern Spain).
Changes during the product life cycle - different channels can be exploited at
different points in the PLC e.g. Foldaway scooters are now available everywhere. Once
they were sold via a few specific stores.
Producer - distributor fit - Is there a match between their polices, strategies,
image, and yours? Look for 'synergy'.
They break down 'bulk' into smaller packages for resale by a retailer.
They buy from producers and resell to retailers. They take ownership or 'title' to
goods whereas agents do not (see below).
They provide storage facilities. For example, cheese manufacturers seldom wait
for their product to mature. They sell on to a wholesaler that will store it and eventually
resell to a retailer.
Wholesalers offer reduce the physical contact cost between the producer and
consumer e.g. customer service costs, or sales force costs.
A wholesaler will often take on the some of the marketing responsibilities. Many
produce their own brochures and use their own telesales operations.
An agent will typically secure an order for a producer and will take a commission.
They do not tend to take title to the goods. This means that capital is not tied up in goods.
However, a 'stockist agent' will hold consignment stock (i.e. will store the stock, but the
title will remain with the producer. This approach is used where goods need to get into a
market soon after the order is placed e.g. foodstuffs).
Agents can be very expensive to train. They are difficult to keep control of due to
the physical distances involved. They are difficult to motivate.
The retailer will hold several other brands and products. A consumer will expect
to be exposed to many products.
Retailers will often offer credit to the customer e.g. electrical wholesalers, or
travel agents.
The retailer will give the final selling price to the product.
Retailers often have a strong 'brand' themselves e.g. Ross and Wall-Mart in the
USA, and Alisuper, Modelo, and Jumbo in Portugal.
The main benefit of the Internet is that niche products reach a wider audience e.g.
Scottish Salmon direct from an Inverness fishery.
There are low barriers low barriers to entry as set up costs are low.
The message is decoded by a car radio (decoding) and the target consumer interprets the
message (receiver). He or she might visit a dealership or seek further information from a
web site (Response). The consumer might buy a car or express an interest or dislike
(feedback). This information will inform future elements of an integrated promotional
campaign. Perhaps a direct mail campaign would push the consumer to the point of
purchase. Noise represent the thousand of marketing communications that a consumer is
exposed to everyday, all competing for attention.
1. Personal Selling.
Personal Selling is an effective way to manage personal customer relationships. The sales
person acts on behalf of the organization. They tend to be well trained in the approaches
and techniques of personal selling. However sales people are very expensive and should
only be used where there is a genuine return on investment. For example salesmen are
often used to sell cars or home improvements where the margin is high.
2. Sales Promotion.
Sales promotion tend to be thought of as being all promotions apart from advertising,
personal selling, and public relations. For example the BOGOF promotion, or Buy One
Get One Free. Others include couponing, money-off promotions, competitions, free
accessories (such as free blades with a new razor), introductory offers (such as buy digital
TV and get free installation), and so on. Each sales promotion should be carefully costed
and compared with the next best alternative.
7. Sponsorship.
Sponsorship is where an organization pays to be associated with a particular event, cause
or image. Companies will sponsor sports events such as the Olympics or Formula One.
The attributes of the event are then associated with the sponsoring organization.
The elements of the promotional mix are then integrated to form a unique, but coherent
campaign.
There are clear differences in information usage between goods and services. First, the
difference is that the consumers of services are less likely to purchase without
information, than those of goods. Second, the consumer of services will prefer personal
sources to impersonal sources of information. And third, the basic characteristics of
services have implications for communication strategies. The above three differences
influence the decisions regarding the
Communications objectives
Target audiences
Planning of each of the sub elements in the promotion mix
Promotion objectives:
the basic objective of promotion would be to develop public relations and create a brand
image. The promotion mix should use indirect selling techniques, packaging and
customization.
Target audiences:
In service sector there should be a direct contact between the customers and there service
providers. Therefore some promotion should be directed towards the employees so as to
motivate them to serve the customers better. The target audience also includes buyers,
influencer and the decider or user of the buying cycle.
Planning the Promotion mix:
a customer is buying the performance of the service personnel and therefore the
advertising in service industry shouldn’t only restrict itself to encouraging consumption,
but also it should encourage employees to perform well. Effective advertising programs
should be such that they have a positive effect on contact personnel, capitalize on word of
mouth, provide tangible clues, make offer easily understandable and contribute
continuity.
Planning for promotion mix: planning the promotiom mix calls for the right advertising
strategies, consumer promotions, efficient selling methodologies and good public
relations for the right kind of publicity.
Public relations and publicity:
Promotional activities like community relations, event management, media blitz,
corporate identity programmes have relevance and should be used effectively by
marketers.
Eg: a medical doctor specialising in eye care running his own clinic cum nursing home
and organizing free eye camps in competence. all over the region. This community
service will not only spread his name but also prove his
Communication strategy:
The service marketer should attempt to reflect a consistent & attractive personality in all
manifestations of the organizations that reach the public.
Also one must aim for a recognizable human personality to endorse the service.
Stress on specialization, rather than all things for all people. This will help in creating a
unique positioning.
The 5th P: People
To realize its potential in services marketing, a firm must realize its potential in internal
marketing - the attraction, development, motivation and retention of qualified employee-
customers through need meeting job-products. Internal marketing paves way for external
marketing of services. In internal marketing a variety of activities are used internally in
an active, marketing like manner and in a coordinated way.
The starting point in internal marketing is that the employees are the first internal market
for the organization.
The basic objective of internal marketing is to develop motivated and customer conscious
employees.
A service company can be only as good as its people. A service is a performance and it is
usually difficult to separate the performance from the people. If the people don’t meet
customers' expectations, then neither does the service. Therefore, investing in people
quality in service business means investing in product quality.
Training.
All customer facing personnel need to be trained and developed to maintain a high
quality of personal service. Training should begin as soon as the individual starts working
for an organization during an induction. The induction will involve the person in the
organization's culture for the first time, as well as briefing him or her on day-to-day
policies and procedures. At this very early stage the training needs of the individual are
identified. A training and development plan is constructed for the individual which sets
out personal goals that can be linked into future appraisals. In practice most training is
either 'on-the-job' or 'off-the-job.' On-the-job training involves training whilst the job is
being performed e.g. training of bar staff. Off-the-job training sees learning taking place
at a college, training centre or conference facility. Attention needs to be paid to
Continuing Professional Development (CPD) where employees see their professional
learning as a lifelong process of training and development.
Personal Selling
There are different kinds of salesperson. There is the product delivery salesperson. His or
her main task is to deliver the product, and selling is of less importance e.g. fast food, or
mail. The second type is the order taker, and these may be either 'internal' or 'external.'
The internal sales person would take an order by telephone, e-mail or over a counter. The
external sales person would be working in the field. In both cases little selling is done.
The next sort of sales person is the missionary.
Here, as with those missionaries that promote faith, the salesperson builds goodwill with
customers with the longer-term aim of generating orders. Again, actually closing the sale
is not of great importance at this early stage. The forth type is the technical salesperson,
e.g. a technical sales engineer. Their in-depth knowledge supports them as they advise
customers on the best purchase for their needs. Finally, there are creative sellers. Creative
sellers work to persuade buyers to give them an order. This is tough selling, and tends to
o ffer the biggest incentives. The skill is identifying the needs of a customer and
persuading them that they need to satisfy their previously unidentified need by giving an
order.
Customer Service
Many products, services and experiences are supported by customer services teams.
Customer services provided expertise (e.g. on the selection of financial services),
technical support(e.g. offering advice on IT and software) and coordinate the customer
interface (e.g. controlling service engineers, or communicating with a salesman). The
disposition and attitude of such people is vitally important to a company. The way in
which a complaint is handled can mean the difference between retaining or losing a
customer, or improving or ruining a company's reputation. Today, customer service can
be face-to-face, over the telephone or using the Internet. People tend to buy from people
that they like, and so effective customer service is vital. Customer services can add value
by offering customers technical support and expertise and advice
Going on a cruise - from the moment that you arrive at the dockside, you are greeted;
your baggage is taken to your room. You have two weeks of services from restaurants
and evening entertainment, to casinos and shopping. Finally, you arrive at your
destination, and your baggage is delivered to you. This is a highly focused marketing
process.
Customers are retained, and other serves or products are extended and marked to
them.
Customers in the service sector attempt to take cues about the service
provider's capabilities and the quality of service offered from physical
evidence. The major elements of physical evidence include the physical
environment, the modes and content of communication, service
personnel, the tangible elements accompanying the service and the
brand.
Service providers should price their services right (neither too high nor
too low) to attract customers. Some service providers offer tangibles
like books or gifts to improve their relationship with customers.
Service providers also need to invest on building the corporate brand,
which conveys their image. Brand is another tangible considered by
customers before purchasing a service.
Physical evidence is the material part of a service. Strictly speaking there are no physical
attributes to a service, so a consumer
tends to rely on material cues.
are many examples of physical evidence, including some of the following:
Packaging.
Internet/web pages.
Brochures.
Furnishings.
Uniforms.
Business cards.
A sporting event is packed full of physical evidence. Your tickets have your team's logos
printed on them, and players are wearing uniforms. The stadium itself could be
impressive and have an electrifying atmosphere. You travelled there and parked quickly
nearby, and your seats are comfortable and close to restrooms and store. All you need
now is for your team to win!
BIBLOGRAPHY
www.Google.com
PHILIP KOTLER