A PROJECT REPORT ON

SERVICES MARKETING MIX

SUBMITTED BY
ANKIT DAS
ENROLLMENT NO. – 030108024
PGDM – 08
2018-2020
Services – Are deeds, performances and processes provided or coproduced by one entity or
person for another entity or person. American Marketing Association – “Activities, benefits and
satisfactions which are offered for sale or are provided in connection with the sale of goods.”

Services marketing is a sub field of marketing which covers the marketing of both goods and
services. Goods marketing includes the marketing of fast moving consumer goods (FMCG) and
durables. Services marketing typically refers to the marketing of both business to
consumer (B2C) and business to business (B2B) services. Common examples of service
marketing are found in telecommunications, air travel, health care, financial services, all types
of hospitality services, car rental services, and professional services.

The service marketing mix is also known as extended marketing mix. It 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.
However it adds 3 more P’s which are required for optimum service delivery. The product
marketing mix consist of the 4 P’s which are product, pricing, promotions and placement. The
extended service marketing mix places 3 further P’s which include People, Process and Physical
evidence. All of these factors are necessary for optimum service delivery. Let’s discuss the same
in further detail.

SERVICE MARKETING Services – Are deeds, performances and processes provided or

coproduced by one entity or person for another entity or person. American Marketing
Association – “Activities, benefits and satisfactions which are offered for sale or are provided in
connection with the sale of goods.”

Characteristics of services Intangibility• Heterogeneity• Perishability• Inseparability

(simultaneously production and consumption)• A service once consumed cannot be returned•
Controlling the quality of services is difficult• Services cannot be made available in advance•
Time utility is critical•

The 7 P’s of Services Marketing

The first four elements in the services marketing mix are the same as those in the traditional
marketing mix. However, given the unique nature of services, the implications of these are
slightly different in case of services.

Product

In case of services, the ‘product’ is intangible, heterogeneous and perishable. Moreover, its
production and consumption are inseparable. Hence, there is scope for customizing the offering
as per customer requirements and the actual customer encounter therefore assumes particular
significance. However, too much customization would compromise the standard delivery of the
service and adversely affect its quality. Hence particular care has to be taken in designing the
service offering.

Pricing

Pricing of services is tougher than pricing of goods. While the latter can be priced easily by
taking into account the raw material costs, in case of services attendant costs - such as labor and
overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the cost
of the food served but also has to calculate a price for the ambience provided. The final price for
the service is then arrived at by including a mark up for an adequate profit margin.

Place

Since service delivery is concurrent with its production and cannot be stored or transported, the
location of the service product assumes importance. Service providers have to give special
thought to where the service would be provided. Thus, a fine dine restaurant is better located in a
busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is better
situated in the countryside away from the rush and noise of a city.

Promotion

Since a service offering can be easily replicated promotion becomes crucial in differentiating a
service offering in the mind of the consumer. Thus, service providers offering identical services
such as airlines or banks and insurance companies invest heavily in advertising their services.
This is crucial in attracting customers in a segment where the services providers have nearly
identical offerings.

The final three elements of the services marketing mix - people, process and physical evidence -
are unique to the marketing of services.

People

People are a defining factor in a service delivery process, since a service is inseparable from the
person providing it. Thus, a restaurant is known as much for its food as for the service provided
by its staff. The same is true of banks and department stores. Consequently, customer service
training for staff has become a top priority for many organizations today.

Process

The process of service delivery is crucial since it ensures that the same standard of service is
repeatedly delivered to the customers. Therefore, most companies provides the details of the
service delivery process, often going down to even defining the service script and the greeting
phrases to be used by the service staff.

Physical Evidence

Since services are intangible in nature, most service providers strive to incorporate certain
tangible elements into their offering to enhance customer experience. Many hair salonsinvest in
comfortable and stylish sitting areas with magazines and plush sofas for patrons to read and relax
while they wait. Similarly, many restaurants invest heavily in their interior design and
decorations to offer a tangible and unique experience to their guests.

McCarthy's four Ps
Category Definition

A product is seen as an item that satisfies what a consumer demands. It is a

tangible good or an intangible service.Tangible products are those that have
an independent physical existence. Typical examples of mass-produced,
tangible objects are the motor car and the disposable razor. A less obvious
Product
but ubiquitous mass-produced service is a computer operating system.

Every product is subject to a life-cycle including a growth phase followed by

a maturity phase and finally an eventual period of decline as sales fall.
Marketers must do careful research on how long the life cycle of the product
 they are marketing is likely to be and focus their attention on different
challenges that arise as the product moves.

The marketer must also consider the product mix. Marketers can expand the
current product mix by increasing a certain product line's depth or by
increasing the number of product lines. Marketers should consider how to
position the product, how to exploit the brand, how to exploit the company's
resources and how to configure the product mix so that each product
complements the other. The marketer must also consider product
development strategies.

The amount a customer pays for the product. The price is very important as
it determines the company's profit and hence, survival. Adjusting the price
has a profound impact on the marketing strategy, and depending on the price
elasticity of the product, often it will affect the demand and sales as well.
The marketer should set a price that complements the other elements of the
marketing mix.
Price
When setting a price, the marketer must be aware of the customer perceived
value for the product. Three basic pricing strategies are: market
skimming pricing, market penetration pricing and neutral pricing. The
'reference value' (where the consumer refers to the prices of competing
products) and the 'differential value' (the consumer's view of this product's
attributes versus the attributes of other products) must be taken into account.

All of the methods of communication that a marketer may use to provide

information to different parties about the product. Promotion comprises
elements such as:advertising, public relations, sales organisation and sales
promotion.

Advertising covers any communication that is paid for, from cinema

commercials, radio and Internet advertisements through print media and
Promotion billboards. Public relations is where the communication is not directly paid
for and includes press releases, sponsorship deals, exhibitions, conferences,
seminars or trade fairs and events. Word-of-mouth is any apparently
informal communication about the product by ordinary individuals, satisfied
customers or people specifically engaged to create word of mouth
momentum. Sales staff often plays an important role in word of mouth and
public relations (see 'product' above).
 Refers to providing the product at a place which is convenient for consumers
to access. Various strategies such as intensive distribution, selective
Distribution(Place)
distribution, exclusive distribution and franchising can be used by the
marketer to complement the other aspects of the marketing mix.

The "seven Ps" is a marketing model that adds to the aforementioned four Ps, including "physical
evidence", "people", and "process". It is used when the relevant product is a service, not merely a
physical good.

Category Definition

The evidence which shows that a service was performed, such as the delivery
Physical packaging for the item delivered by a delivery service, or a scar left by a surgeon.
evidence This reminds or reassures the consumer that the service took place, positively or
negatively.

The employees that execute the service, chiefly concerning the manner and skill in
People
which they do so.

The processes and systems within the organization that affect the execution of its
Process
service, such as job queuing or query handling.