Over the years, as the concept of marketing has evolved, and the definition of a product has grown more complex, the traditional marketing mix has also been redefined and extended. In this article, we will discuss some of these newer versions of the marketing mix by looking at 1) the extended models of marketing mix, 2) the 7P model for service marketing, 3) and an example of the McDonald’s marketing mix.
THE EXTENDED MODELS OF MARKETING MIX
The traditional marketing mix comprised of the 4Ps of product, price, place and promotion has enjoyed tremendous popularity over the years. When it was first articulated by McCarthy in 1960, it consisted of 12 parameters that were to be mixed like ingredients by a marketer. Eventually brought down to the much smaller number of 4, the framework became simpler and easier to understand but there was a lack of depth and several important elements were missed out such as the provision of services to the consumer.
A New Look At The 4Ps Of Marketing
Keeping in mind these shortcomings, marketing experts and researchers have expanded on these over the years. Some of these expansions have included:
Proposed by Judd in 1987, a fifth P was added to the model. This stood for People. The basis for this was that the people providing the product or service to the customer had an important role to play in communicating the right message and had a significant impact on the user experience.
In 1987, Kotler proposed an additional two Ps to the original model of 4. These were political power and public opinion formation. Kotler proposed that when entering foreign markets, there was a need to satisfy an audience beyond the target market. These were the governments, regulatory bodies, trade associations and even other interested groups who had power over the intended market. Hence the political power and public opinion formation was needed to gain their support.
The 7Ps of Services Marketing
This model has gained significant traction over the years as services and their marketing is increasingly being given due importance as an independent field of study. This model, proposed by Booms and Bitner in 1981, extends the marketing mix by 3 new Ps that directly relate to the service provision industry. These are people, physical evidence and process.
The 15Ps Model
The longest extension to the original model was proposed by Baumgartner in 1991 and includes people, politics, public relations, probe, partition, prioritize, position, profit, plan, performance, and positive implementations.
In an attempt to add depth, much complexity has also been added to the model. The most widely used extension of the traditional marketing mix is the 7P model for services marketing.
THE 7Ps MODEL
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:
- Intangible – Primary to the definition of a service is the notion that there is no tangible result of the service in the customer’s 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.
- 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.
- 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 customer’s expectations can be managed through marketing communication activities.
- 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.
- 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.
The 7Ps includes the traditional elements, plus three new elements. In the services marketing concept, these are defined as following.
The Traditional Elements
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.
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.
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.
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
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.
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 – 7p’s/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:
- How can we develop our ‘product’?
- How can we price fairly?
- How can be provide the right place for the customer to access and experience our product?
- How can be promote our product to create an impact, differentiate from competitors and further brand image?
- What is the process we will use to deliver our service to the customer?
- Who are the people who represent us and what are the skills that they need?
- How can be provide physical evidence of the superior nature of our product?
EXAMPLE – 7Ps MARKETING MIX AT McDONALD’S
McDonald’s 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 Mcdonald’s successful global presence has been franchising. Through this activity, the product and its delivery are translated to fit local sensibilities while maintaining an essential McDonald’s experience.
The McDonald’s Marketing Mix
An effective and relevant marketing mix has enabled the restaurant to flourish while remaining true to its ‘think global, act local’ philosophy.
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.
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.
McDonald’s has presence in 116 countries of the world. The organization believes in strategic expansion that focuses on a location’s long term potential.
By first understanding cultural differences, a localized promotion strategy is employed. The focus is on both the brand’s global image and its local sensitivity.
In all of the thousand’s on McDonald’s 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.
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 McDonald’s 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 children’s meal always has toys. These are all elements of physical evidence that are standard in all Mcdonald’s locations.