Service marketing | 7ps of marketing | with examples

Hello and welcome to today's lesson. Where we're looking at the service marketing also known as the 7ps of marketing.

Now in this blog, we'll define the full model in service marketing and then we'll look at a complete example so the model really sinks in.

So, the service marketing mix consists of a set of tactics, that a company can use to promote and encourage potential customers to buy their service.

Now the model is unique to services. It does not apply to products. The model is an extension of the 4Ps of marketing. And actually, the model is essentially the 4Ps of marketing plus three new tactics.

But before we examine the model let's first define,

What is a service

Now unlike physical goods, services are intangible. It cannot be seen tasted or touched they're inseparable. So, production cannot be separated from consumption. They're perishable meaning once used services cannot be stored saved or returned. And finally, they're heterogeneous, which describes the uniqueness of services. Meaning they cannot be mass-produced.

So, examples of businesses providing services include airlines, hotels and software as a service company.

The services marketing mix consists of the original 4 tactics of the product marketing mix plus three new techniques.

So, let's look at all seven.

Number 1, product concept in marketing

Now product refers to the service a company wishes to sell. This would be flights in the case of an airline or rooms in the case of a hotel.

Now because services are intangible. It can help to think of services as being an asset plus the processes around that asset. So, for example when you book a hotel room for the night. You use the hotel room which is the asset, would you also undergo a series of processes such as checking in and checking out.
read more: product concept in marketing

Number 2, Price in Service marketing

Price refers to the price the customer pays for the services. Now it's worth noting that pricing for services can be a little more complex and for products. So, for example, an airline charging for flights would need to consider many factors. Such as will we charge more as the flight gets increasingly booked, will be charged more for peak times, will we offer discounts for group bookings.

And these are just a few of the factors that might need to be taken into account when determining the price of a flight.

Now interestingly because services are much more ambiguous than products. Customers are likely to associate a higher-priced service with superior quality.

Number 3, place in Service marketing

For services, place refers to the simple of access that clients had to a service. Now, this can involve a physical decision. Such as where to locate a hotel. But it also involves determining which affiliates to use to help you to sell the service.

For example, if you're selling hotel rooms you might choose to use hotels.com as your affiliate.

Number 4, Promotion in Service marketing

Promotion refers to different ways you communicate describe and advertise your service. Now because they are intangible, services can be more difficult than products to promote and that's because there's nothing physical that can be assessed by a potential customer.

Now common ways to promote services include using celebrity endorsements to create trust in the product, offering guarantees to remove risk, using testimonials and using branding to highlight the quality of your product.

Number 5, People in Service marketing

People we mean those individuals who are directly or indirectly relater in the delivery of the service. And that typically means employees of the company. But it can also mean subcontractors with direct interaction with customers.

Now actually it can even refer to existing and past customers of the company and these customers represent the company through word-of-mouth by talking to their friends and their colleagues.

Now people are a very important factor in the 7 Ps. Because services serve to be produced and consumed at the simultaneously. And because of this, the behaviour of these people is very important in determining the experience of the customer using your service. Now all services business should ensure that staff are well trained and motivated.

Number 6, Physical evidence in Service marketing

As we've already defined services are intangible. But despite this, the delivery often involves some tangible elements. So physical evidence is defined as being both the environment or place where the service is delivered. And any tangible elements that facilitate the service or provide information about the service.

So, based on this definition of physical evidence includes things such as the company's website, their annual accounts, if they're publicly available any logos or brochures or even the buildings that the services are provided from.

So as an example, think about a hotel. That someone wants to visit for the first-time physical evidence might include pictures of the hotel, past customer reviews online and the hotel's proximity to the canter of town.

Number 7, Process in Service marketing

Process refers to the procedure’s mechanisms and flow of activities that occur when the customer and the business interact with each other.

So, when for example at customer books a hotel room a process is triggered. When the customer then checks into the hotel another process is triggered and obviously then when they check out yet another process is triggered.

Now all of these processes need to be tightly controlled to ensure a consistent customer experience. They're usually defined in written standard operating procedure documents.

Now one criticism of the 7ps is that they force you to think in an internally focused manner. Rather than a customer-focused manner.

7 c's in marketing

Now because of that, it can be useful to use the 7P's and convert them into the 7C's. And these reimagine the 7 PS in a more customer-focused manner. So, for example, -

Product = customer

Price = cost

Place= convenience

Promotion= communication

People= caring

Process = coordination

Physical evidence = confirmation

Some people find thinking in terms of the 7C's makes much more sense for them, as it's much more customer-focused.

Now when we're using the services marketing mix, what we're trying to do is get the right balance of each tactic. so that the service is a success in the marketplace and people buy it.

Now we can think of the sweet drop as being the point when all seven tactics are in balance. Now if you were just one factor or one tactic then you may have to adjust the others to maintain that balance.

So, for example, if we decide to change from a budget airline into a luxury one. We obviously need to change the price. But we'd also need to change all the other tactics too. We probably need more people to offer a more personal experience. Because that's what higher-end customers would expect and we need to change processes. So, each customer is given more care and attention.

example

So, let's use the example of a luxury hotel, to see the services marketing mix in action and bring everything together.

So firstly product, so the core product of the hotel is its rooms. Which customers stay in for a period of time. Of course, there is more to a luxury hotel than just his rooms there's also its restaurants, Wi-Fi, spa etc.

Next is the price, now in the case of a luxury hotel price will vary according to room size. So, as you might expect a large suite with a cityscape of view costs significantly more than a small group with no view. And that's because the value perceived by the customer is much greater and therefore, they are prepared to pay more.

Next, we have a place, so for our hotel place concerns how the service is consumed. So typically, the place will be chosen for a strategic reason. So, for example, because the hotel making the hotel close to a city, a business canter or even a tourist attraction. The location of the hotel is obviously in one fixed place. However, a place could also mean that a mobile app, is used to give customers easy access to concierge services, wherever they happen to be while they're staying at the hotel.

Next, we have a promotion, so for our luxury hotel promotion could include advertising on travel websites related to the location of the hotel. It could also mean directly advertising to past customers using social media and press releases.

Next, we have people, there would be many people who interact with guests, including managers, receptionist's, concierge staff, spar staff, pointers etc.

Next comes process, now the key processes for a luxury hotel include things that happen when a guest books a room, checks in and obviously checks out. Each of these will have a unique and formal process associated with it designed to delight the customer.

And finally, we have physical evidence, so for our luxury hotel, the physical evidence includes the customer service they receive before their stay. It also includes you know the hotel's website and any online reviews or online photos that people have posted amongst other things.

summary

So, in a nutshell, the services marketing mix provides seven tactics, that can be adjusted to help you attract and keep customers to any services business. Now when you're using the tool that aims is to find the right balance between all seven tactics. So, your service is a success in the marketplace. so that's it for today's blog. Really hope you enjoyed it. And thank for reading.
read: Functions of management
         What is management