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7 p's of service marketing
- 2. Marketing Mix Traditional Marketing Mix ◦ Product ◦ Price ◦ Place ◦ Promotion Extended Marketing Mix ◦ People ◦ Process ◦ Physical Evidence
- 3. Product Level 1 • CUSTOMER BENEFITS CONCEPT concerned with what benefits do customers seek Level 2 • Translated into SERVICE CONCEPT is concerned with what the general benefits will the service offer Level 3 • Translated into SERVICE OFFER make greater detailed shaping of the service concept decisions on: service elements (tangible and intangible), service forms(In what way or how) service levels (quality and quantity) Level 4 • Translated into SERVICE FORMS Level 5 • Translated into SERVICE DELIVERY SYSTEM
- 4. Example in Context of Product Level 1 • Research what benefits do customers seek……For example Entertainment Level 2 • What business we are in like Entertainment Such as Drama, Live Theatre, Street Play, Musical Concert, Stand Up Comedy etc… Level 3 • More specific like if music …then classical, western, devotional, fusion as well as proportion of tangibles and intangibles Level 4 • What forms…whether ticket basis or membership, weekly, bi- weekly or daily or what other options Level 5 • Relation between tangibles, employees and physical evidence
- 5. Price Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in case of services attendant costs - such as labor and overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambience provided.
- 6. Price Terminology for Service SectorService Terminology Theatre/ School Entry time Admission fees Transport Fare Education Tuition Insurance Service Premium Employee Service Salary Labor Service Wages Usage of Loan/Overdraft Interest Utilities Tariff Charge Property usage Rent
- 7. Major Pricing Strategies Discount Pricing Diversionary Pricing Guaranteed Pricing Loss leader Pricing High price Maintenance Pricing Offset Pricing Differential Pricing ◦ Customer’s ability to pay ◦ Price time differential ◦ Place Differential
- 8. Place (Distribution Channel) Since service delivery is concurrent with its production and cannot be stored or transported, the location of the service product assumes importance. Thus a holiday resort is better situated in the countryside away from the rush and noise of a city. Following distribution channel are used by service operators to distribute their services: Direct Distribution Channel Indirect Distribution channel Agent Brokers Franchisee electronic channel
- 9. Examples of Distribution Channel for Services
- 10. Promotion Since a service offering can be easily replicated promotion becomes crucial in differentiating a service offering in the mind of the consumer. Following are the promotion tools which is/are used by service organization: Paid Forms of Communication Advertising Sales Promotion Direct Marketing Personal Selling Public Relations Publicity Non paid but also uncontrolled form of Promotion: WOM
- 12. People People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff. The same is true of banks and department stores. So it becomes important for service organization to educate its employees and customers to educate to deliver the best services. The below mentioned parties are important to make the service delivery happen. Employees Customers
- 13. Process The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers and customers are with service provider while delivering the services. Therefore, most companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff. Service can be described on the basis of the types of service delivered and this is of three types: Line Operation (Self service restaurants) Job shop operation (Hospital) Intermittent operation (Consultancy, Event Management)
- 14. Physical Evidence Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. Thus, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests. Physical Evidence is basically divided into two categories: Core Evidence Peripheral Evidence
- 15. Core Physical Evidence Peripheral Physical Evidence