Services Marketing Triangle

Servuction model
Visible
 Customer A
 Customer B

 Service experience of customer A

 Inanimate environment

 Contact personnel/service providers

Invisible
 Organization and systems

Rules, regulations and processes

 Marketing Mix for Services

Marketing Mix for Goods

4 Ps and 4Cs
Product-Customer solution
Price-Cost
Place-Convenience
Promotion-Communication
To be used collectively. Not in isolation
 Inadequacy of 4 Ps for Services
 Product-Tangible aspects. Not applicable in the
case of services.
 Promotion-For Services major part of it takes
place at the time of production itself unlike
goods where it is a separate activity.
WOM publicity very crucial for services
 Subsidized/ standardized pricing (thanks to
monopoly of public sector) in vogue for services
till recently
Price is a cue for quality in the case of services
 Co production-unique feature of services
 Inadequacy of 4 Ps for Services
 Distribution-Not that much relevant for
services
 Difficulty in perceiving quality of service
before consumption (experience quality)
This leads to addition of three more Ps
>People
>Process
>Physical evidence
7Ps of Services
 Expanded Marketing Mix for Services

1. Product
Core level ,actual level, augmented level
and potential level
 Core-Basic needs
 Actual=Core +Tangibles (Appearance/
Servicescape)
Service Product Levels
CORE

ACTUAL

AUGMENTED
 Expanded Marketing Mix for Services

 Augmented=Actual+ Supplementary services

Tangible and augmented levels together are called
secondary level
 Potential=The features and benefits that can be added
to the service which enhance the customer’s value

E.g.-Fitness Centre-Core: Necessary equipments;

Secondary-Layout, Décor, Music, Personal care etc
To add new secondary services at regular intervals is one
of the differentiation strategies for Services
 Expanded Marketing Mix for Services

2. Pricing
 Higher price-Better quality: General perception
 Service-High fixed cost ,low variable cost
 Goods-Low fixed cost, high variable cost
 Seasonality-High in the case of Services (off
season tariffs)
 Expanded Marketing Mix (Contd)

3.Promotion
 Services-Operations and Promotion are handled
by same set of people (front line employees)
 Not only the Service but the Service provider
also needs to be promoted (Not necessary for
goods)
 Perceived risk is high in the case of Services
because of their intangible nature. Promotion
should try and reduce this .
 Expanded Marketing Mix (Contd)

4.Place
 Production, delivery and consumption –at
the same place for Services
(inseparability). Distribution channel
therefore is irrelevant.
 Location of ATMs, décor/ambience are
some of the Place decisions in the case of
Services
 Expanded Marketing Mix (Cntd)

5.People
All human actors who play a part in service delivery
Frontline personnel, intermediaries, customers,
customer’s customers and co customers
 Consumers as co producers (ERP
implementation)
 Design and delivery of Service- Done by people
employed by Service provider (Front line
employees/Franchisees)
 Influence of fellow consumers on the service
quality perceptions of customers
 Expanded Marketing Mix (Cntd)

6.Process
The actual procedures, mechanisms and flow of activities by which the
service is delivered and the corresponding operating systems
constitute the process
 Operations and Marketing performed by same set of
people in the case of Services (inseparability)- E.g. –
Ayurvedic treatment
 Critical encounters-Have a direct bearing on satisfaction
levels of customers
Mechanization-ATMs, Vending machines (To reduce the
heterogeneity)
Involvement of customers-on line bookings, self service
counters
 Expanded Marketing Mix

7.Physical Evidence
The environment in which the service is delivered and
where the firm and customer interact and any tangible
components that facilitate performance or
communication of the service (Servicescape)
Ambience, décor, behavior of frontline personnel,
brochures, business cards, signage, letterheads