The marketing mix is a collective term for marketing components utilised by organisations to shape their overall marketing strategy. It is also referred to as the 4 P’s of marketing, namely, product, price, place, and promotion. This is often called the traditional marketing mix.
However, with the progression of the service sector, the concept of the services marketing mix has emerged, encompassing the 7 P’s of marketing. The additional 3 P’s are people, process, and physical evidence. Thus, the marketing mix for services can be said to be an extension of that for goods, incorporating further factors.
As per Borden, “The Marketing mix refers to the allocation of efforts, the amalgamation, the design and integration of marketing elements into a programme or mix which, based on an evaluation of market forces, will best fulfil 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. These are the product, the price structure, the promotional activities, and the distribution system.”
Marketing of services is that segment of marketing where organisations aim to establish enduring relationships with service customers. As selling services differ significantly from selling goods, its marketing is not straightforward.
Therefore, to facilitate the marketing of services, a distinct and effective marketing mix is required. Here, along with using the 4 P’s of marketing, three additional marketing components are incorporated: people, process, and physical evidence. These appended elements are referred to as “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 fulfil the objectives of the organizations, a defined set of marketing components is used, which is called a ‘traditional marketing mix (4 P’s)’.
The elements of the traditional marketing mix are:
In the realm of services, marketers identify three levels to refine the product element of the marketing mix. These levels are the core level, tangible level, and augmented level.
The objective of the core level is to meet the essential needs of the customer, while the aesthetic appeal and presentation of the product are handled at the tangible level. Lastly, the augmented level manages the auxiliary services provided in conjunction with the primary services.
As stated above, these three levels can also be consolidated into two levels: the first level being the core level that caters to fundamental requirements and the second level comprising both tangible and augmented service levels.
The actual service typically offered to a customer is considered the core level, whereas, at the secondary level, the focus lies in service delivery.
For example, a restaurant’s primary objective or core service is to serve top-quality food to its customers. In contrast, the secondary service level aims to provide customers with a pleasant environment.
The pricing of services is done in a markedly different manner compared to that of products, with various factors accounting for this difference. Services can be distinguished based on their price, where a higher price often indicates superior service quality.
In addition to pricing, the cost component is another crucial factor used to differentiate goods from services. When comparing a service to a product, it’s noticeable that the fixed costs for services are higher while the variable costs are lower.
Take a hotel, for example. The cost it incurs hosting its guests is almost negligible compared to the cost of maintaining and establishing the hotel itself. Therefore, the fixed cost of a hotel is significantly high. In such cases, the majority of the price paid by the customer goes towards covering these fixed costs. Contrarily, for products, the lion’s share of the customer’s price is directed towards covering variable costs.
‘Place’ refers to the location where services can be conveniently availed. The production and consumption of services occur simultaneously because they are inseparable.
Due to this inseparability, service providers cannot produce the service when the production cost is low nor sell them at higher prices when the demand for the service is high. Consequently, there will be no distribution channel for the marketing of services, or at best, a very small one.
Since services are intangible, they carry a high level of risk for the consumer compared to tangible products. Therefore, service providers should concentrate on mitigating these risks, which can be achieved through effective communication with customers.
To this end, the company needs to publicise its services through positive word-of-mouth, offer customers a trial period for using services, establish a strong brand image, adopt suitable advertising strategies, and manage public relations efficiently.
For instance, when a customer visits an amusement park or restaurant, the service will be rated based on the conduct of the service provider and the clientele present at that time. Hence, the service provider must attract a suitable crowd and employ adept personnel.
Expanded/Augmented Marketing Mix
Scholars have determined that a distinctive approach is needed for the marketing of services. It’s suggested that the traditional 4Ps of marketing need to be expanded for service marketing. With the progression of service offerings, additional marketing components – namely, the 3 additional P’s – have been incorporated into the marketing mix. This is referred to as the expanded or augmented marketing mix.
The concept of the augmented marketing mix was introduced by Booms and Bitner. While the basic structure of marketing implementation is provided by the 4Ps of the marketing mix, this approach was enhanced by including three more P’s: People, Process, and Physical evidence.
Though the added 3Ps of the marketing mix are often analysed separately, they are interconnected elements in marketing management. Depending on the requirements of the marketing plan, they can also be integrated with other elements of the marketing mix, such as communication and distribution.
The extended P’s of service marketing are:
In the realm of the service marketing mix, ‘people’ encompasses both service personnel and customers. This is because, in some scenarios, not just the service personnel but also the customers are vital for the successful delivery of the service.
Take education, for instance. Here, students (customers) must cooperate with teachers (service personnel) to ensure a successful outcome. Similarly, in numerous other service sectors, the customer’s participation is crucial for availing the services.
The term ‘process’ refers to the method by which activities are initially carried out and the steps taken to perform these activities. Over the past few years, the study of ‘processes’ has been given significant attention, particularly in fields like computer programming, manufacturing, and engineering.
‘Process’ has paved the way for innovative improvements, such as ‘lean production’ and ‘just-in-time’ in the field of production and manufacturing. In recent times, the importance of process is gaining recognition even in the service industries and is becoming one of their core competencies.
7. Physical Evidence
Physical evidence is a critical component of the marketing mix for services. It allows the customer to reassess their decision about the company.
For instance, if a customer visits a restaurant, they typically expect cleanliness and a pleasant ambience. Similarly, if individuals travel in first class on an airplane, they anticipate extra space, comfort, and amenities.