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What is the 7Ps Model?

The traditional marketing mix was designed and gained popularity in an era where most
businesses sold products. Any service provision and the role of good customer service
was largely ignored and the potential impact on brand development and the user
experience was not understood. This was remedied when Booms and Bitner proposed
their extension to create the services marketing mix that we see today. The extended
model should now be used to create competitive strategies in a more holistic manner.

Defining Services Marketing


Now a recognized offshoot of the traditional field of marketing, services marketing is the
design of strategy to address the provision of services, both in a business to consumer
context and the business to business scenario. Some examples of core services are
telecom services, airlines, accountancy or tax services, the hotel industry and
professional services such as hair dressers, dry cleaners or tailoring services. Services
marketing may also cover elements in a traditional physical product sales environment
such as customer services and tech support.
A service is a type of economic activity that is intangible, it is not stored and does not
result in ownership. A service is consumed at the point of sale. Given this definition, the
new Ps added to the model gain new importance. Since the service cannot be owned and
is consumed at the point of delivery, the process through which it is delivered, the
person who delivers it, and the environment in which it is delivered become an indicator
of whether a customer leaves satisfied and if they will want to return.

Fundamental Characteristics of a Service


There are five fundamental defining characteristics of a service. These
characteristics are the basis of the 7P model for marketing. These are:
1.

Intangible Primary to the definition of a service is the notion that there is no tangible
result of the service in the customers hand. The customer does gain something when they leave.

This may be legal advice or a checkup by a doctor. Tangibility needs to be created within the
experience and this is done through the environment in which the service is delivered.
2.

Heterogeneous All service experiences are unique. This means that there is a variety
that needs to be anticipated and catered for. Factors external to a customer or a service provider
such as traffic or a storm can impact the service experience. In addition, factors internal to
either of the two participants can also have an impact such as personality traits or a bad day.
Apart from this, the same person may react to the same situation differently on two different
days. All these factors make it hard to provide a standard service experience.

3.

Production and Consumption A service is created and used up at the same point
in time. This means that the customer and the employee are both part of the process and are
equally important to the experience. The employee needs to be trained extensively while the
customers expectations can be managed through marketing communication activities.

4.

Perishable A service can be stored, returned or resold. This means that it is


immediate and bound by time. Proper processes need to be in place to make sure that service
provision capacity is utilized to an optimum degree, to mitigate periods of high or low demand.

5.

Lack of Ownership Because the customer does not end up retaining ownership of a
tangible product, they have nothing to take away from the service except their experience. This
means that over time, once the experience memory has diluted, there may be an issue with
comparing brands. Companies are constantly trying to differentiate themselves from their
competitors to build a loyal customer base.

7Ps Elements
The 7Ps includes the traditional elements, plus three new elements. In the services
marketing concept, these are defined as following.

The Traditional Elements


1. Product
In the service industry, the production and consumption of the product are
simultaneous and the product is intangible, diverse and perishable. The nature of this
product allows for on the spot customization. This also means that the point at which
this activity is occurring becomes very important. Ideally, to ensure repeat experiences

of similar quality and a consistently good user experience, most service providers aim to
give some customization within an overall standardized mode of delivery.
2. Pricing
Since a service cannot be measured by what material goes into its creation nor is the
actual tangible cost of production measurable, it can be challenging to put a price tag on
it. There are some tangibles of course, such as the labor costs and overheads. But
additionally, the ambiance, the experience and the brand name also factor into the final
price offering.
3. Place
As mentioned, the service is produced and consumed in the same place. It cannot be
owned and taken away from the location. This is why the place at which this transaction
occurs is of vital importance. The location of the service provision is carefully analyzed
to allow ease of access and the desire to make the effort to reach it. Fast food restaurants
and sales and service centers may be located in busy main streets to allow walk in
customers, while a fine dining restaurant may be located in a quiet street to maintain
exclusivity and privacy.
4. Promotion
Promotion fulfills the same role as it does in any other marketing context. A service may
be more easily replicated than a physical product. To prevent a service becoming
interchangeable with its competitors, it becomes vital to create a desirable brand image
and name in the market. Differentiation becomes a key goal in order to attract both new
and repeat customers.

The New Elements

Entrepreneurial Insights

5. People
This is a vitally important element of the service marketing mix. When a service is being
delivered, the person delivering it is not unique from the service itself. When dining at a
restaurant, if a rude waiter is encountered, the entire experience will be labeled as bad
service. This is why many businesses invest in defining the right kind of person to fill
their service role and then making efforts to find or train people to fit this definition.
6. Process
Since service provision needs to strike a balance between customization and
standardization, the processes involved in the activity require special mention and
attention. A process needs to be clearly defined for the service provider. This basic
process should ensure the same level of service delivery to every customer, at any time
of day, on any day. Within this process, there should be defined areas where a customer
preference can be accommodated to provide a unique experience.
7. Physical Evidence
The location of the service delivery also takes on significance. The level of comfort and
attractiveness of a service location may make a lot of difference to the user experience. A
calm and soothing environment with thoughtful comfort measures may provide a sense
of security to a new customer which will make them return.

Service Marketing Mix 7ps/Extended Marketing Mix


Important Questions in Designing a 7P Model
When setting out to design or improve a marketing mix for a service provider, the
marketer should ask the following questions:
1.

How can we develop our product?

2.

How can we price fairly?

3.

How can be provide the right place for the customer to access and experience our
product?

4.

How can be promote our product to create an impact, differentiate from competitors
and further brand image?

5.

What is the process we will use to deliver our service to the customer?

6.

Who are the people who represent us and what are the skills that they need?

7.

How can be provide physical evidence of the superior nature of our product?

The Company
McDonalds was created by Richard and Maurice McDonald in 1937. They created food
processing and assembly line techniques at a tiny drive-in restaurant near Pasadena,
California. In 1954, the restaurant was franchised in the USA. In 1967, the restaurant
went global with a foothold in Canada. The key to Mcdonalds successful global presence
has been franchising. Through this activity, the product and its delivery are translated to
fit local sensibilities while maintaining an essential McDonalds experience.

The McDonalds Marketing Mix

Flickr | Rupert Ganzer

An effective and relevant marketing mix has enabled the restaurant to flourish while
remaining true to its think global, act local philosophy.
1. Product
The product offered is a standard set of items that are similar in taste and appearance
wherever in the world they are being sold. There is some adaptation according to local
tastes and laws. For example, a more vegetarian menu is offered in India, where a
majority does not eat meat. In Muslim countries, any pork products are eliminated and
halal meat is used. There are also taste adaptations such as beer in Germany, yogurt
drinks in Turkey and espresso in Italy. There are also burger variations in different
countries. Despite these differences, the menu is structured in the same way which
allows for the same experience everywhere.
2. Price
The organization attempts to price differently across its operations. This means that the
right price is selected for the right market. Pricing decisions are made by setting a
pricing objective, determining demand, estimating costs, analyzing competing offers,
deciding on a pricing method and then finalizing a price. By following this method and
primarily assessing competitors, the company can understand what the customer is
willing to pay and what value they attach to the product.
3. Place

McDonalds has presence in 116 countries of the world. The organization believes in
strategic expansion that focuses on a locations long term potential.
4. Promotion
By first understanding cultural differences, a localized promotion strategy is employed.
The focus is on both the brands global image and its local sensitivity.
5. Process
In all of the thousands on McDonalds worldwide, the same process is used for making
the food. The food specifications for size, weight and content are the same everywhere.
All suppliers need to meet these specifications. Kitchen and restaurant layouts are the
same. To cater to language differences, the menu displays contain images that help
create similarities everywhere. There are also defined processes for service delivery such
as all orders need to be filled within 90 seconds in the restaurant while drive through
wait time is 3.5 minutes.
6. People
The company staffs locally and also promotes from within. This allows the team
managing the operations to understand local cultures as well as the corporate
philosophy. The people chosen are trained in both technical skills and customer focus. A
Hamburger University in the USA as well as other training centers in different parts of
the world teach standard practices that are to be employed in restaurants all over the
world. This training helps standardize product and service delivery.
7. Physical Evidence
All McDonalds locations are similarly created with a family friendly environment. There
is a play area for children, and service is always provided with a smile. All menus are
structured in similar ways with fries and drink combos. The childrens meal always has
toys. These are all elements of physical evidence that are standard in all Mcdonalds
locations.

7 Ps of Services Marketing Mix in Marketing

Traditional marketing mix was developed by keeping in view the goals of


marketing. This also may be adapted to services marketing. The use of
traditional marketing mix in service organizations cannot satisfy themselves
because as they are to stay at sub-optimal performance in marketing. Slightly
adapting marketing labels cannot resolve the problems that are affiliated with
the marketing of services.
The four Ps (product, price, place & promotion) are said to be controllable variables of the
traditional marketing mix. The effective combination of these four Ps components will make
an organization to have a competitive edge in preference by the target market. Marketing
researches also identified limitations and inefficiencies of traditional marketing mix when
applied to services.

In the year 1981 7Ps marketing mix model was suggested by Boom and Bitner
to service firms, which was later supported by McGrath and other marketing
specialists. In addition to the four Ps in traditional marketing, services
marketing mix will have three additional components are Physical evidence,
People and Process.
The following elaborated components of Service marketing Mix are:
Product: Service is an intangible product. It has bundle of features and
benefits in it, which have a relevance to a specific target market. As such there
is a high level flexibility and opportunity to be innovating in designing a
product offer.

Physical Evidence: Most services cannot be offered without the


support of tangibles. Customers cannot see the service provided, but they can
definitely see the tangibles that accompany. For example, a passenger
transport organization promises for a safe, comfortable and timely journey
from one place to another. Now this is examined on the bases of transport
vehicles condition, seating facilities and other physical facilities and also the
way in which the employees are responding to the customers. All these
physical factors are used as evidence by the customer to evaluate and expect
the service from the provider. As, a result physical evidence plays a crucial role
in shaping the consumers perception as well as expectations.

Price: The pricing decision is very critical in the field of services as well.
This pricing component of marketing mix alone can determine the revenue for
the firm. Consumer sensitivity to price would be higher in services than in

goods. However, the basic pricing methods are the same as in goods, but for
the pricing strategies for services depends on the understanding of the values
of various groups of people that are targeted by the organization.

Place (Distribution): Services are intangible and as well as


inseparable. These are the two characteristics that do not allow a service firm
to follow the same channel options available for goods marketing. Due to the
intangible character of service wholesalers and retailers cannot be used. As,
the services cannot be stored and cannot be separated from producers,
retailing cannot be an independent activity in services marketing. The
simultaneous activities in services are Production, distribution and
consumption. Services have an advantage of using a direct selling approach,
through which services are offered at lower price to the customers. As, this
does not mean a direct selling, is the only way of selling the services. There are
other channels of distribution such as, agents and brokers, franchisers and
electronic channels that are used for distributional services.

People: Service organizations are people oriented and people based


organizations. Where the employees of a service firm, form into a major
competency in undertaking the business operations. In services organization
every employee is a marketing person, who undertakes either full-time or
part-time service in the marketing activity. For better performance in
marketing activity, service employees are to be trained and motivated.

Promotion: Consumers are the co-producers in the service business.


The quality of services will not only depend upon the performance of service
provider but also on the performance of the service consumer. Very few
service organizations or service concepts have readily available performers as
consumers. As, it is the responsibility of service organization to educate and
provide sufficient training to customers to make use of the services efficiently.
A well designed promotional program is large help to the organization to
inform and advice customers for better experience.

Process: The process is a functional activity that assures service


availability and quality. The way of physical setting is designed technically and
the functions are scheduled and routed to provide promised services to the
customers. In simple terms, the management process is to manage the service
encounters effectively. Gronroos who was a marketing specialist has described
process as interactive marketing wherein moments of truth occur. The
challenge of process management is to improve moment of truth.
As, the 7 Ps service marketing become the marketing offer of the organization
to the target market. The marketing mix aims to achieve seven distinctive

goals. They are the matching offer to the consumers needs and wants,
consumer quality expectations, consumers perceptions, consumers
satisfactions consumers relation and consumers welfare and protection. The
dynamic nature of target market in all the seven different areas offer
challenges to marketing organization. As, service firms can be successful only
when the marketing mix elements and dynamic and adaptable to the changes
in the market environment.

Four Ps of Marketing - Marketing Assignment


Help
Four Ps of Marketing - Marketing Assignment Help

A marketers task is to build a marketing program or plan to achieve the companys desired
objectives. The marketing program consists of numerous decisions in the mix of marketing
tools to use. The marketing mix is the set of marketing tools the firm uses to pursue its
marketing objectives in the market. These tools are broadly classified into four groups
namely, product, price, place and promotion. These are called the 4Ps of marketing.
The particular marketing variables under each P are
Product
Product variety
Quality
Design
Features
Brand name
Packaging
Sizes
Services
Warranties
Returns
Price
List price
Discounts
Allowances
Payment period
Credit terms
Promotion
Sales promotion

Advertising
Sales force
Public relations
Direct marketing
Place
Channels
Coverage
Assortments
Locations
Inventory
Transport
The marketing mix decisions must be made for influencing the trade channels as well as the
final customers. The company preparing an offering mix of products, services, prices and
utilizing a promotion mix of sales promotion, advertising, sales force, public relations, direct
mail, telemarketing and internet to reach the trade channels and the target customers.
The firm can change its price, sales force size and advertising expenditures in the short run.
It can develop new products and modify its distribution channels only In the long run.
Thus the firm typically makes a fewer period-to-period changes in the short run than in the
number of marketing-mix decision variables might suggest.