The service marketing mix pdf

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Need an account? Click here to sign up. Download Free PDF. Dian Utami Sutiksno. A short summary of this paper. Download Download PDF.

Translate PDF. STP in this issue is chosen because of the disagreement among marketing experts. One critisism about 4P frame is having the diffrence between the philosophy behind marketing mix and the fundamental from management school of marketing. The aproach used in this article is journal reviews which contains the concepts from the creation of marketing mix concept , elaborates concept gaps and compains, and eventually it is expected to givea model of designing SMM concept, which will give academical contrubution in developing the concept that can be practically implemented in the businees world.

The latest concept used as the main reference in this article is about SMM which basically focusing on the dimentional development of SMM from 4P and 8P [producer] and 8c [customer]. Keywords:market strategy, STP, marketing mix strategy, marketing strategy, customer value, marketing performance, service marketing mix 1.

The condition demands for aproaching charger in marketing into two processes : creating,communicating and delivering value to customer and managing customer relationship Soedijati et al, These processes are directed in such a way so that the company could create superior marketing performance.

For market base company, all components involved in the company should have market orientation. Marketing mix strategy has to be applied in market positioning strategy so that the company can have access to market. It is how the company decides customer value proportion from marketing mix made it possible to create superior customer value. Nevertheless,there are still some disagreement among marketing experts. Some critisism about 4P frame is that the root of difference between the philosophy behind marketing mix and the fundament of management school of marketing.

It should be based on identification of customer needs and wants, typical external and therefore uncontrollable factors Constantinides, The short term versus the long term from marketing mix,and the discussion regarding marketing mix, for instance:theoretical base of marketing mix, practical application from marketing mix concept and pedagogicial function of marketing mix. This article compiled according to a main article compiled by Bellmunt et al , Constantinides , Borden , Silverman , Shaw et al , Watershoot et al , Morrison et al , Hermans , Zethaml et al , Bartels Other supporting journals from Rudd et al , Al-Share et al , Gajic , Newman et al , Al Muala et al , Sarker et al , Alipour et al , Dhiman et al , Fu Ho et al , Soedijati et al , Ivi ,and other related journals,also other relevant resources.

Therefore, in this article we describe some terms connected to SMM and explain some of the marketing mix different concepts according to several writers. Neil Burden is famous for his concept of marketing mix,which was popularized from a scientific conference. The 4Ps term became popular because of Mc Carthly ,who elaborated marketing mix dimensions into 4 dimensions,which are:product mix,place mix,promotion mix,price mix. SMM itself is created from marketing mix for goods product.

This definition is considered to be extensive and useful for every sector ,consequently it develops object list which is easy to remember and to apply. Early version of marketing mix suggested by Frey is differentiating 2 groups of variables: offering and equipment, which reflect the object of the trade and the facilitating action. The most common used definition is from McCarthy, which minimizing object list into 4 variables: product, price, place, and promotion.

For almost 25 years there has been a perfect mix between marketing mix concept and 4Ps. The latest 4Ps clasification shows a model from 4 elements: product mix, distribution mix, sale mix and communication mix.

Kottler suggested a separated marketing mix model. He used generic marketing function to trade as the center of the classification. Therefore, the configuration, symbolism, facility, and assessment agree with the product, communication, distribution, and price.

Eventually, Boom and Bitner suggested a model which expands the 4Ps to service, known as 7Ps participants, process and physical evidence Criticism based on the theoretical base of the Marketing Mix The theoretical and practical gaps in marketing is based on a confusing essence: the reduction of marketing concept for design, implementation and control of simplified marketing mix. Although it is a dominant marketing paradigm, the concept of marketing mix is frequently criticized.

Building the idea from this controversion, Bruner and Waterschoot made their contribution see scheme 2. Bruner II suggested the 4Cs: : consept, cost, channel dan communication. The characteristic of this model is that the variables are overlapping, not exclusive to each other. Waterschoot thought that marketing function as suggested by Kotler is the appropriate property to classify marketing mix, which only has one function exhaustivity dan exclusivity.

This classification overcomes three weaknesses from 4Ps scheme according to Waterschoot: the criteria of the classification is especified, exhaustive, and exclusive. Silverman and Constantinides studied the marketing mix concept development through Historical Context review and Development of The Marketing Mix Construct from and see table 2.

Table 2. Unfortunately, we could not find the missing concept of marketing mix between Thus, each table can represent the comparison of marketing mix concept development.

Meanwhile, table 2. Definition study also includes the definition of service maketing mix and the definition ofstrategy, considering that this article is about service marketing mix. We thought that we there are lack of journals explicitly using the term of service marketing mix,but implicitly the term of strategy and service are already included in the concept itself.

From what has been mentioned before, we can conclude that there are some definition gaps and dimensional gaps from service marketing mix between According to some studies, we try to make a definition about service marketing mix which is a combination of service, tools or marketing key elements which can be controled by the company or organisation to get the marketing target.

From the definition study, it can be said that many experts agreed that the marketing mix concept contains 3 factors Bellmunt, : 1. WHAT set variables that the organization can control , 2. WHO the marketing manager , and 3. Historical Context and Development of The Marketing Mix Construct Source : Constantinides Author Contribution Booms andBitner Recognising the special character of the services as products, they demonstrated theimportance of Environmental factors PhysicalEvidence influencing the quality perception.

They included the Participants personnel and customers and the Process ofservice delivery as the additional MarketingMix factors. Cowell Three aspects justifying the revision of theoriginal Marketing mix framework:- the original mix was developed formanufacturing companies- empirical evidence suggesting that marketing practitioners in the service sector find the marketing mix not being inclusive enoughfor their needs Brunner The 4P Marketing mix elements must be extended to include more factors affecting theservices marketing thus becoming mixesthemselves Ruston and The unique characteristics of the services —intangibility, inseparability, Carson perishability and variability — make the control of the marketingprocess, using the generalised tools ofmarketing, inadequate Fryar Segmentation and differentiation is the basis of successful positioning of services.

The Product element can be better demonstrated as having two components, the primary and secondary service elements as well as the process Doyle While recognising that the content of the 4Ps inthe service sector is somehow different from that of the tangibles he does accept the 4Ps asthe elements of the services marketing mix. How the service isperformed is as important as what isperformed.

New services are just as important to a service company as new products to a product-marketing company. Similarly, the improvement of existing services and the elimination of unwanted, unprofitable services are also key goals. It is important that the service marketers study the product life cycle and identify the emerging market trends.

The new product requires invention and innovations through intensive research and analyzing the changing trends in demand. This makes it imperative that service-generating organizations are well aware of the changing needs and requirements of customers, their likes and dislikes, lifestyles. The strategies for designing the productmix determine the magnitude of success, and profitability of the service firms and the level of satisfaction to the customers.

Price in Services Price is a key element in marketing mix. It must be aimed at achieving organisational goals and customer acceptance. The price of the service is the value attached to it by the service provider.

It must correspond with the customer's perception of value and quality. If the price is too low, the service may be perceived as poor as inferior quality. Customers differ in their needs, styles and spending power. Therefore, many service providers offer a wide range of services at various prices to meet the needs of different target customers. Some service firms follow differential price policy to correspond with changes in demand at different points of time.

For example, a hotel may offer services at lower prices during off peak seasons. The pricing decisions of a service firm are influenced by several - factors. The type of service organization, the demand-supply position in the market, the level of competition,- the stage in the life cycle may all have an impact on pricing decisions. However, organisational objectives have a dominant role in pricing decisions for long-term survival and excelling competition.

Some service organisations like those owned by public sector have constraints over the prices they can charge to customers. Here pricing is dependent more on providing social benefits to customer rather than making profits.

These include the product pricing strategies like skimming, penetration pricing, cost plus pricing, differential pricing or promotional pricing. Pricing policy cannot be static; it should be a continuous process. A framework for pricing decisions should be monitored continuously to allow for responsive action and adaptation when required.

Promotion of Services Promotion is used to communicate information about products and services to target market audiences thereby facilitating the exchange process.

It helps-jocreate awareness among the customers and enables them to select the service provider. Since the service firm is marketing intangibles, reputation is very important. Promotional programmes can stress dependability of the service - its efficient delivery and consistent high quality. The promotional measures of a service firm include personal selling, advertising, sales promotion, public relations and mailing offers.

Personal selling is resorted to by many service providers to develop a close relationship with customers. However, a combination of these programmes will be the most effective promotional tool in creating favourable response from target audience.

The selection of communication mix depends o n the level of competition-,degree of intangibility in the service products, the reach of target customers, restrictions on the service professions etc.

Some professional organisations restrict the use of advertising for their members on the ground that it is unethical. A service marketer should not only understand how marketing communication works but also the media in which it has to function. This -- calls for a revision in the formulation of the goals of communication for the service industry.

Agrawal proposes a revised Heirarchy of Effects model for creating evidence of services. Service marketers necessarily have to seek from their communication planning and media much beyond the goals of creating awareness, generating interest, developing a desire and then encouraging action among consumers. This was all right for goods. For service, it has to be more. Service communication must also provide evidence of the service or make tangible the service for the customers.

For instance, a particular design, a website or a corporate logo in a service message is all evidences of the service. The inseparable nature of services makes it necessary that it must be accessible and available to customers in order to facilitate the exchange process. It cannot be stored until a later date; it must be available for consumption at the point of production.

Distribution or the place element of the marketing mix is concerned with two main issues, namely, accessibility and availability of services. Accessibility refers to the ease and convenience, with which a service can be purchased, used or received. Availability refers to the extent to which a service is obtainable or capable of being purchased, used or received. Both criteria must be satisfied in order to achieve successful services marketing.

A key decision with regard service distribution is location. There are several factors, which influence the decision of service location. These are? Service inseparability Service perishability The role of the consumer as co producer of the service Customer needs and wants Importance of geographical location as part of the service Target markets Many service organisations use direct. However, intermediaries or agents are employed in certain commercial services like banking, insurance etc.

Some services like courier services operate through multiple outlets. But certain common functions like service designing, promotion etc. Another method of service distribution channel is known as franchising. It basically consists of signing a n agreement between the service organisation and another individual or firm called a franchisee. The - 25 Woodruffe. New Delhi,, p. The franchiser lays down the standard conditions regarding location; space, dkcor, layout and external make up of the outlet.

Thus in services marketing as in marketing of goods, there are number of channel options to market the services.

One can also make use of modern channels like e-mail and Internet for marketing services. They involve considerable interaction between the service provider and customers. Therefore, employment of right kind of personnel in service firms is of utmost importance. The inseparable nature of services means that the human element forms an integral part of the service package. People being an element of services marketing mix applies not only to the service personnel but also to the customers who play an active role in the service delivery.

In many services, customers form an important part of the service. For example, in education, the students are very much part of the learning programme. The participation of customer is essential to derive the full benefits of services. People are the key to a successful service encounter and this can happen only if the employees develop an obsession with the customers. Employees need to understand their role in service exchange, and human resources management provides the programmes and strategies to ensure the highest standards of customer care.

Services are not purchased and owned in the same way as physical goods. A service is created or performed rather than physically handed over. The performance process involves interaction between service provider and -- customers. Therefore, the service process is a n integral part of service offering and also the consumer satisfaction. It is only recently that the importance of service delivery process has been recognised and developed as a marketing tool in service industry.

Developments in technology have also helped to revolutionalise many processes in the service sector. The principles by which service delivery process can be designed and implemented are really not different from those applied in the field of manufacturing. There are four objectives of setting down clear outlines or blueprints for service delivery processes.

While designing a service delivery process the following factors are to be considered: 1. The extent of customer involvement or participation in the service process.

The location of the service points i. The nature of the service itself i. The degree of standardisation i.

The complexity of the service as measured by the number steps or activities in the service delivery process. The pace of technological developments in recent years has had a major impact on service delivery processes and practices. Service providers and customers have now online information and access to services like banking, stock broking, airline-ticket booking etc.

Many organisations have been using technology to improve service efficiency and reach of services. Some new services have also developed directly out of developments in technology such as mobile communication, internet- trading and e-commerce.

Physical Evidence in Services Physical evidence or appearance is an important element of service marketing mix. Since services lack tangibility the consumers require evidence to prove- that they exist in the same form as being claimed by the service provider. Some services are product based and service providers will focus on ensuring that any accompanying goods, which form part of the service, are of appropriate quality and standard.

Services, which are highly intangible like consultancy and financial advice, are more difficult for the consumer to assess. In the absence of any tangible products, consumers will look for other ways of evaluating the service. A piece of service evidence is a physical object accompanying a service that cannot be categorised as true product elements. Service evidence, according to Shostack, plays a critical role in verifying either the existence or the completion of a service. The perception of customers with regard -to physical evidence includes two main types: essential evidence and peripheral evidenceezg Essential evidence is integral to the service offering and includes the tangible aspects or benefits.

Thus a computer in a bank or a teacher in a management institute is essential evidence of these service providers. This type of evidence will not normally be exchanged or owned by the customer. In all cases, the quality and standard of the essential evidence will be a major influence in the customer's purchase decision.

Jamshedpur, pp. Peripheral evidence, unlike essential evidence, can be given away or exchanged during service transactions. Thus a bank passbook in a bank or course material in an academic institution are peripheral evidence of the service providers. Peripheral evidence plays an emotional role in consumer evaluation of a service before, during and after purchase.

Both these types of evidence combine with the organisation's other marketing mix elements, especially promotion and people, to create an impression on customers and potential customers.

Physical evidence will help the potential customers to evaluate the service offering and its quality and standard. Their impression of quality will always be subjective and based on their individual perception.

These configurations include a dynamic location, physical infrastructure, corporate image and identity, motivated and trained service personnel etc. Quality in services is basically a customer-oriented phenomenon. It must begin with customer needs and end with customer satisfaction.

Customers are satisfied when their expectations are met, and delighted when their expectations are exceeded. Quality is achieved when customers are provided with the best solutions or the best value for money. Quality is subjective and hence it is difficult to give a precise definition. However, "the quality of services is the degree of conformance of all the relevant features and characteristics of service to all the aspects of the customer's needs limited by the price and delivery he or she will accept".

Kand Sahoa, S. Service quality may be judged from: - 1. Design reflected through the relevant features and characteristics of services 2. Satisfaction of customers' needs and 3. Production and delivery of the service. More than any other factor service organizations are likely to be judged by the quality of service provided. Basic marketing decisions thus have to be made o n service quality because: 1. Quality will influence the volume of demand for a service and 2.

Quality will be a major positioning tool in relation to other competitors in the market place. Evaluation of Service Quality The role of marketing in developing service quality is an important one. The needs and expectations of the consumers are critical factors in assessing service quality. A marketing and customer orientation throughout the organisation can ensure that service providers get close to the customers, thus ensuring that service delivery meets customer expectations.

The customer, in terms of their expectations of the benefits, may judge the actual output of the service. This leads to an important idea in assessing quality from a service marketing perspective, that is, perceived service quality. Perceived service quality represents the judgements of customers of an organisation's service based on their overall experience of the service - encounter. Understanding how customers arrive at this judgement is very important for service marketing management.

It has been indicated that customers make these decisions using a number of key criteria to judge the services.

These factors relate to areas covered by the extended services marketing mix namely people, process and physical evidence. A model of service quality where the total quality of a service is a function of three components has been proposed by Gronross Technical quality: whether the service provides the appropriate technical attributes. Functional quality: how the service is rendered.

There are five main criteria on the basis of which service quality is determined. Zeitharnl, V. A and Berry, L. Reliability: This implies the capacity of the service firm to deliver the promised service dependably and accurately.

It means that the same service is performed every time, on time, in the same way and without mistakes. Willingness: This refers to the willingness to help customers and provide prompt service. Customers do not like to wait unnecessarily and if it happens it reflects badly o n the quality of service.

Similarly in case of service failure, the ability of the firm to respond professionally and quickly can create a good impact on service quality. Assurance: This means the knowledge that the providers possess which enables them to perform the service competently. It also includes courtesy. This conveys trust and confidence and generally convinces the customer that the service provider has the customer's best interest at heart.

Empathy: It basically means the power of understanding the customer's feelings and needs which allows the server to care for him and provide personal attention to him.

Due to this a customer feels that he can approach the server with confidence and has a feeling of security. Tangibles: This includes the overall appearance of the surroundings, equipment, information materials and personnel. This can be visible evidence of the care and attention to details shown by service firm. Service quality has two important implications for the organization providing the service.

First, decisions must be made on the basic level of quality, which will be provided to match the quality, which is expected by consumers.

Secondly, decisions have to be made on the management of quality over time. These decisions have significant influence on the service offerings in the long term. A dynamic organisation always tries to identify new opportunities and convert them into profitable business propositions: New service development must be a well - thoughtout plan and envisages several processes.

These processes are shown in Fig. F5 given below Fig. Major Stages in New Service Development. In this context it is imperative to describe the different stages mentioned in the development of new services.

Idea generation Generation of a creative idea is the beginning of a successful service. It starts with a careful analysis of customer needs and market opportunities.

The idea can come from internal sources like staff, organisation's own research and development studies, management's judgement etc. Marketing research can contribute new ideas or disclose new areas where a firm can enter and exploit the opportunity. Screening the idea Screening is a preliminary investigation of the new service idea. The object of screeningthe idea is to see whether the idea needs a detailed analysis or it must be dropped altogether.

In the screening stage, the organisation has to verify details of the idea such as its attractiveness, the expected size of market, the compatibility of the idea with the organisation's objectives and resources etc.

The screening reveals the ideas to be rejected and those feasible ideas to be accepted. These feasible ideas are considered for further analysis and development. Concept Development and Testing A service idea develops into a service concept which is a n elaborated version of the idea expressed in meaningful consumer terms.

In product marketing extensive marketing research and consumer surveys are used for product testing. But in services the concept testing is made by discussing the concept with small group of target clients or by small- scale surveys of existing and potential clients. Business Analysis Business analysis is an in-depth exploration and evaluation of the service concept.

It involves analysis of the key parameters of the service including its market potential and profitability. The analysis focuses on areas like the target market, its size and expected market share, the level of current and future demand, analysis of break even point and profitability, external market environment affecting performance etc. Service Development At this stage, preparations are made for developing and launching the service.

Necessary infrastructure may be developed for rendering the new service like designing and supplying literature, brochures, schedules and other tangible elements of the service.

A suitable marketing strategy is also developed at this stage. Sometimes the existing process may be adapted for accommodating the new service or new premises may be added.

Market Testing Market testing is the process of introducing the service to a selected number of clients to examine its viability and market performance.

It helps to identify the weaknesses of the service including its marketing plan. If the market testing proves to be successful the service can be launched with full fledged marketing programme. Commercialisation In the final stage of a service promotion, the service is launched commercially. The organisation may also adopt suitable marketing strategies for the successful implementation of the marketing programme.

The services life cycle has definite stages of life depending upon the performance of the service in the marketplace. The service life cycle comprises of four well-known stages, namely, the introduction stage, the growth stage, the maturity stage and the decline stage.

The graphical representation of these four stages is depicted Fig. F6 below 36 Woodruffe. Seruices Marketing, Macrnillan India Ld. Service Life Cycle Introduction Stage The introduction stage represents a slow rate of growth of revenue as the service is introduced in the market.

Promotion costs are high at this stage. The service is yet to catch up a reasonable market share and wide consumer acceptance. Growth Stage The organisation's revenue increases at a higher rate and even profitability may be achieved at this stage. Promotion costs come down and the firm captures a good market for the service.

The firm can even think of additional investment for expansion of the service. Maturity Stage Mature service offerings are characterised by steady demand for the service and stability in earnings, The firm faces extreme competition in the marketplace. The main task of the firm is to retain the market share by putting extra efforts to promote revenue. Decline Stage All services may not have high market acceptance at all times.

Some services fade out or may be replaced by new ones. The poor performance leads to fall in revenue and profitability and service comes to a decline stage in the life cycle. The life cycle concept thus helps service managers in designing and fine-tuning appropriate marketing strategies depending upon the particular lifecycle of the service.