Generally, the marketing mix is a combined term for marketing components used by organizations to develop their overall marketing strategy. It is also called 4 P’s of marketing, i.e., product, price, place, and promotion. It is also called the traditional marketing mix.
But with the advancement of the service sector, the concept of the services marketing mix has emerged, including 7 P’s of marketing, i.e., additional 3 P’s (people, process, and physical evidence). Thus, the marketing mix for services can be said to be an extension of that for the goods, including some more factors.
According to Borden, “The Marketing mix refers to the appointment of efforts, the combination, the designing and integrating the elements of marketing into a program or mix which, based on an appraisal of the market forces, will best achieve an enterprise at a given time.”
According to Stanton, “Marketing mix is the term used to describe the combination of the four inputs which constitute the core of a company’s marketing system, i.e., the product, the price structure, the promotional activities, and the distribution system.”
Marketing of the services is that part of the marketing, where organizations are interested in establishing an enduring relationship with the service customers. As the selling of services is much different from the sale of goods, its marketing is not easy.
Therefore, to support the marketing of services, a distinct and effective marketing mix is required. Here, along with using 4 P’s of marketing, three extra marketing components, i.e., people, process, and physical evidence, are used. These added elements are called “expanded” and/or “augmented marketing mix.”
Traditional Marketing Mix/4 P’s of Marketing
In order to satisfy the needs and requirements of the target customers and fulfill the objectives of the organizations, a defined set of marketing components is used, which is called ‘traditional marketing mix (4 P’s)’.
The elements of the traditional marketing mix are:
1. Product
In the case of services, the marketers identify three levels to develop the product element of the marketing mix. The three levels are the core level, tangible level, and augmented level.
The objective of the core level is to fulfill the necessary requirements of the customer, whereas the looks and presentation of the product are managed at a tangible level. Lastly, the augmented level deals with the ancillary services provided in addition to the basic services.
As explained above, the three levels can also be adjusted into two levels; the first level is the core level that fulfills the basic requirements, whereas the second level consists of both tangible and augmented levels of services.
The actual service that is generally offered to a customer is considered the core level, while at the secondary level, service delivery is the prime concern.
For Example, the restaurant’s primary objective or core service is to serve the best quality food to its customers. In contrast, the secondary level of service aims to provide customers with a good environment.
2. Pricing
The pricing of services is done in a very different manner than that of the pricing of products, and there are various reasons responsible for it. Services can be distinguished based on their price, i.e., the higher price of a service indicates a better service quality.
Besides pricing, another important factor that is considered while distinguishing goods from services is the cost component. When comparing a service with a product, it can be seen that the fixed costs of services are higher, and the variable costs of services are lower.
For example, the cost of a hotel incurs in hosting its guests is almost negligible compared to the cost of maintaining and establishing a hotel, i.e., the fixed cost of a hotel is very high. Hence, in the case of the service providers, the maximum portion of the price paid by the customer is directed toward covering the fixed cost. On the contrary, in the case of products, the maximum part of the customer’s price is directed towards covering the variable cost.
3. Place/Distribution
Here, ‘place’ refers to the location where services can be availed conveniently. The production and consumption of services take place at the same point because they are inseparable.
Due to this inseparability, neither the service providers can produce the service when the cost of production is low, nor can they sell them at higher prices where Ml the demand for service is high. Hence, there will be no distribution channel for the marketing of services, or there will be a | small one.
4. Promotion
Since services are intangible, a high level of risk factor is attached to the consumer of service compared to the consumer of the product. Service providers must focus on eliminating the risk factors attached to the service, which can be done by ensuring effective communication with the customers.
For this, the company needs to promote the services through positive word-of-mouth publicity, offer a trial period to customers for using services, create a good brand image, adopt appropriate advertising strategies, and manage public relations efficiently.
For example, consider a customer visiting an amusement park or a restaurant, then he will rate the service based on the behavior of the service provider and based on the gentry available at that time. Hence, the service provider needs to attract the right mass and employ the right personnel.
Expanded/Augmented Marketing Mix
Scholars have found that a different approach is needed for the marketing of the services. It has been suggested that the 4 Ps of traditional marketing need to be extended for the marketing of the services. With the advancement of the services, additional marketing components (i.e., 3 P’s) are included in the marketing. This is called an expanded/augmented marketing mix.
Booms and Bitner have given the idea of the augmented marketing mix. While the basic structure of marketing execution is given by 4Ps of the marketing mix, the approach was made stronger by including three more P’s, i.e., People, Process, and Physical evidence. The relationship; between different elements of the marketing mix is depicted in the table below.
| People | Process | Physical Evidence |
|
Employees (Internal Marketing)
|
Flow of Activities
Number of Steps |
Facility Design
|
|
|
|
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Customers (External Marketing)
|
Level of customer involvement |
Other Tangibles
|
Through analysis of the added 3Ps of the marketing mix is often carried out separately; yet, they are interrelated elements in marketing management. As per the marketing plan requirement, they can also be combined with the other elements of the marketing mix, like communication and distribution.
The extended P’s of service marketing are:
5. People
In the field of the service marketing mix, ‘people’ are referred to as both the service personnel as well as the customers, because in some cases, not only the service personnel but the customers are also essential for delivering the service successfully.
For example, in the field of education, students (customers) should also cooperate with the teachers (service personnel) to make it successful. Similarly, in many other service fields, the customer’s cooperation is very important for availing the services.
6. Process
Process refers to how the activities are originally performed, and the steps are undertaken to perform such activities. For the last few years, the study of ‘processes’ is being given due consideration, especially in the field of computer programming, manufacturing, engineering, etc.
‘Process’ has set up some innovative improvements, such as ‘lean production’ and ‘just-in-time5 in the field of production and manufacturing. In the present times, the importance of process is getting recognition even in the service industries and also becoming one of the core competencies of the service industries.
7. Physical Evidence
Physical evidence is one of the constituents of the marketing mix for services. It permits the customer to review his decision regarding the company for one more time.
For example, if a customer visits a restaurant, he usually expects cleanliness and a pleasant ambiance. Similarly, if people travel in the first class of an airplane, then they expect extra space, comfort, and facilities.