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 Ps as compared to the 4 Ps of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more Ps which are required for optimum service delivery.

The product marketing mix consists of the 4 Ps which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix the 4 Ps. The extended service marketing mix places 3 further Ps 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 beowned. 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. Thats 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. Characteristics of Services
Perishability Intangibility Heterogeneity

Variability
Inseparably Non-ownership

Perishability
Products are produced in the factory today, stocked for the next two, three or four months and sold when an order is procured. However, services cannot be stored because they are perishable. An unoccupied air seat, a vacant hotel room, an unsold seat in cinema hall, or a car mechanic who has no cars to repair today is irreparable loss because all these are perishable services. Besides, a service not fully utilized represents a total loss or even a fluctuating demand. For instance, there is peak demand time for buses in the morning and evening or certain train routes are always more heavily booked than others. This fluctuating demand pattern aggravates the Perishability characteristics of services. Intangibility When in tourism you buy a tour package you are basically buying a dream, a concept or an idea. You cannot touch it, feel it, or smell it. When you buy a package or any tourism product you can only develop an imaginary picture about what you are going to see at the destination, whereas when you buy a bathing soap you can see it, smell it, touch it, feel it and use to check its effectiveness in Cleaning. In this product buying you can immediately check its benefits whereas in case of tourism Product there is no fixed method to calculate what would be the level of satisfaction or value for Money that a tourist will get in return. The continuum of Goods-Service, however, suggests that most services in reality are a combination of products and services having both tangible and intangible aspects. For instance, when you sell a hotel room, hotel room is tangible since its location, physical amenities offered, etc. can be seen and felt by a guest but services attached with the room like room service, laundry, food and beverages, back office, etc. are intangible aspects of tourism services. Therefore, the intangible features of services are: a) A service cannot be touched; b) Precise standardization is not possible; c) There are no ownership transfers; d) A service cannot be patented;

e) Production and consumption are inseparable; f) There are no inventories of the service; g) Middlemen roles are different; and h) Consumer is part of production process so that delivery system must go to the market or customer Must come to the delivery system. Heterogeneity In tourism related services humans serve humans. The human element is very much involved in providing and rendering services and this makes standardization a very difficult task to achieve. A restaurant chef who cooks best cuisines in best possible manner with full attention but every time same chef may behave differently while preparing same cuisine or while presenting it. The new bank clerk may not be as efficient as the previous one and you have to spend more time for the same activity. In hotels, airlines, restaurants, etc. there are standardized procedures to book a room, seat or a corner, respectively. To minimize human contact, Computerized Reservation System (CRS) is created but when you reach the hotel there will be a well-groomed and trained person at the reception who will handover the keys, his behavior will be an important factor in your overall assessment of the 10 standard of services provided by the hotel. Thus, it is the people interacting with you who will make all the differences between a favorable and unfavorable perception of the hotel.

Variability
In the production and marketing of physical products, companies have increasingly paid special attention to ensuring consistency in quality, feature, packaging, and so on. More often than not all customers can be sure that every bottle of Coke he/she buys, even in a life-time of purchases, will not vary. The provision of services, however, invariably includes a large measure of the human element Indeed, with many services, we are purchasing nothing else but the skills of the suppliers. Because of this, it is often very difficult for both supplier and consumer to ensure a consistent product or quality of service.

Inseparability In case of a consumer product, say body talk, is produced/manufactured at Calcutta but is brought and sold at Delhi, whereas in most cases a service cannot be separated from the person or firm providing it. A service is provided by a person who possesses a particular skill (chef or an escort) by using equipment to handle a tangible product (dry cleaning) or by allowing access to or use of a physical infrastructure (hotel, train). To put it in other words, a plumber has to be physically present to provide the services, a guide has to go physically along with the group, a beautician has to be available to perform the massage.

Non-ownership
The final distinguishing feature of a service is that, unlike a physical product, the consumer does not secure ownership of the service. Rather the customer pays only to secure access to or use of the service. Again the hotel room is a good example. Similarly, with banking services, although the customer may be

given a Cheque book, credit cards, etc, they serve only to allow the customer to make use of what he or she is actually buying, namely, bank services.

Role of people in service management

People are the most important element of any service or experience. Services tend to be produced and consumed at the same moment, and aspects of the customer experience are altered to meet the individual needs of the person consuming it. Most of us can think of a situation where the personal service offered by individuals has made or tainted a tour, vacation or restaurant meal. Remember, people buy from people that they like, so the attitude, skills and appearance of all staff need to be first class. People have an important role in service delivery, they are relied upon to deliver and maintain transactional marketing and people play an important part in the customer relationship. People deliver services in all sorts of settings. It is an important element of the services marketing mix. If you go to an organized event such as the Olympics then everything about the experience is underpinned by people. Behind-the-scenes there are project managers and chefs, maitre d' and accountants. The people deliver the service and this is the same for restaurants, hairdressers and auto mechanics. People are the transactional interface between the company and its customers so people deliver the service and they collect money i.e. get paid on behalf the company for the service. So if you go to a restaurant the waiter will greet you, take your order and serve your food and finally he or she will take the money which completes the contractual transaction. People underpin the customer relationship between the company and the consumer. Remember that people buy from people (as we always remind you on Marketing Teacher) and that the relationship between the person you are dealing with and yourself add much value to the transaction. If you know you're going to eat at your favorite restaurant, it a good idea to learn the waiters name and build a rapport. Think of other times such as when you were selling a property and an agent was a particularly reliable and polite person, or perhaps you bought a car because you trusted the salesperson and this advantage clinched the deal. Marketing today is based on Customer Relationship Management (CRM) and the relationship with people that you're dealing with at the company can recruit you as a customer, retaining you as a customer and encourage you to remain a customer in the future. This is where people underpin the long-term customer relationship. Here are some ways in which people add value to an experience as part of the marketing mix. Lets consider training, personal selling and customer service.

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 center 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 offer 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 provide 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, expertise and advice.