Extended Marketing Mix

Prof Jayashree Vispute

Objectives

• To understand the services marketing mix• To study People, Process and Physical

Evidence• To take an example of a case for

understanding services marketing mix

• The Traditional Marketing Mix was primarily directed and useful for tangible products. The 7-Ps model is more useful for services industries and also for knowledge-intensive environments.

• 3 extra P's – People, Process, Physical Evidence.

• The first two more Ps are explicit (People, Process) and the third one (Physical Evidence) is an implicit factor.

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 P’s as compared to the 4 P’s of a product marketing mix.

• The service marketing mix assumes the service as a product itself.

• It adds 3 more P’s which are required for optimum service delivery.

• The extended service marketing mix places 3 further P’s which include

• People• Process • Physical Evidence• All of these factors are necessary for optimum

service delivery

Product

• The product in service marketing mix is intangible in nature.

• Service products cannot be measured like physical products such as a soap or a detergent.

• Tourism industry or the education industry.• Service products are heterogenous, perishable

and cannot be owned.

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.

• 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.

• A lot of banks and telecom companies promoting themselves rigorously - because competition in this service sector is generally high and promotions is necessary to survive.

Price

• 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.

People• 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.

People• An essential ingredient to any service provision is the

use of appropriate staff and people. • Recruiting the right staff and training them

appropriately in the delivery of their service is essential if the organisation wants to obtain a form of competitive advantage.

• Consumers make judgments and deliver perceptions of the service based on the employees they interact with. Staff should have the appropriate interpersonal skills, attitude, and service knowledge to provide the service that consumers are paying for.

People

All people that are directly or indirectly involved in the consumption of a service are an important part of the Extended Marketing Mix. Knowledge workers, employees, management and consumers often add significant value to the total product or service offering.

• 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 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.

Process• Service process is the way in which a service is delivered

to the end customer. • Example of Fedex. The company thrives on its quick

service and the reason it can do that is its confidence on its processes. 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.

Process

• Banks that send out Credit Cards automatically when their customers old one has expired again require an efficient process to identify expiry dates and renewal.

• An efficient service that replaces old credit cards will foster consumer loyalty and confidence in the company.

Process

Procedures, mechanisms and flow of activities by which services are consumed (customer management processes) are an essential element of the marketing strategy.

• For the purposes of the marketing mix, process is an element of service that sees the customer experiencing an organisation's offering.

• It's best viewed as something that your customer participates in at different points in time.

Example to help your build a picture of marketing process, from the customer's point of view.

• Booking a flight on the Internet - the process begins with you visiting an airline's website. You enter details of your flights and book them. Your ticket/booking reference arrive by e-mail or courier. You catch your flight on time, and arrive refreshed at your destination. This is all part of the marketing process.

Physical Evidence• Services are intangible in nature. However, to

create a better customer experience tangible elements are also delivered with the service.

• 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.

• 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

There are many examples of physical evidence, including some of the following:

• Packaging.• Internet/web pages.• Paperwork (such as invoices, tickets and despatch

notes).• Brochures.• Furnishings.• Signage (such as those on aircraft and vehicles).• Uniforms.• Business cards.• The building itself (such as prestigious offices or

scenic headquarters).• Mailboxes and many others . . . . . .

Example to help your understand physical evidence.

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 traveled 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!

Select the right option!Option Your Choice:

Product  A. How the brand is presented.  

Price  B. The mix of traditional and online communications.  .  

Place  C. Opportunities for modifying the core or extended product.  

Promotion  D. How customer service affects the experience.  

People  E. How customer interactions are managed.  

Physical evidence 

F. Where the products are delivered or distributed to

Process  G. Different product pricing for different categories

Answer

• C• G• F• B• D• A• E