In what ways does the marketing mix for services differ from the marketing mix for goods?

Answer 1

The concept of the 4 Ps marketing mix (mm) framework has been widely, and often blindly, accepted as an absolute truth. But markets change over time as do products and the environments in which they exist, so many people have attempted to extend or revise the traditional Mix, Gummerson, Gordon and others. Firstly, to determine how the mm for services might be different to other products I'll just spend a minute talking about the nature of services products. Services are different to physical products in 4 main ways: Intangibility - True services are intangible. When you leave a theme park there is only the memory or the experience that remains; when you get off an airplane you can't take it with you. Some elements are tangible but the core benefit of the purchase is not, you might buy a souvenir on holiday but you didn't go on holiday to purchase a shiny trinket, chances are it was the relaxation, the experience etc... Inseparability -Production and consumption occur simultaneously. On an airplane the flight, the distance travelled is being produced and consumed at the same time, there is no manufacturing facility separate to the plane itself. Perishability - Any unsold hotel rooms at the end of the night are gone forever, the some with airline tickets - once the plane has taken off there is no chance of filling any more empty seats. Variability - It is extremely difficult, perhaps impossible to standardize a service offering because there are so many confounding variables. Going back the Theme park example, one visitor might have an excellent time because he met the best staff, the weather was sunny and whatever else; where as the same person on a different day might absolutely hate the experience, stuck in a traffic jam on the way to the park, the weather was rubbish, the staff were rude etc... It is easy to standardize a manufactured product, this is not the case with Services. The traditional mm can be extended to address these issues. For instance, when we talk about products as an element of the extended mm, it is important to discuss how service providers counter the intangible nature; this could be through providing souvenirs, literature, branded carrier bags, give away sweets or what ever, something physical for customers to hold and remind them that they bought something of value (even though intangible), bank cards are tangible evidence that you bought a financial service, people buy a programme at football matches so they can take home some tangible evidence that they were at the game. The traditional 4 Ps aren't really broad enough to cover all the issues, so when we talk about the inseparability of production and consumption, and the variability of services an important factor is the staff that create and deliver products. Here I think I'm probably getting at what you really wanted to know; the extended marketing mix is a temperamental thing, constantly changing and being revised but I believe the general consensus is that the 4 Ps should now become the 7 Ps + 1 C, these are: Product, Place, Price, Promotion(As you already know) AND People, Physical Evidence, Processes, AND Customers. I've already mentioned People and I've talked about creating Physical Evidence - countering intangibility. Processes is about countering the Variability - creating standardised processes so every customer has as similar experience as possible, and further, creating and refining processes for quick and efficient actions to take place such as responding to complaints. Finally, I find it hard to believe that Customers weren't mentioned in the traditional mm, but they weren't, and now they should be included (this probably has something to do with a shift from 'transactional marketing' to more 'customer centric' approaches but that's a different question). Customers in the mm require research, identifying and responding to changes in demand, understanding what your customers want is central to any marketing issue. In summary, the traditional mm differs from the extended mm for services because it takes into account the 4 characteristics of service products. You may be able to think of other characteristics and differences between goods and services in which case you could extend your mm is other ways, ways that are unique to your product in your environment. Hope that helps. (BTW, these aren't my own ideas, this info can be found in any business textbook and probably online too)