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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 the case of services.
1. Product: In the 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.
2. Pricing: Pricing of services is tougher than the pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in the case of services attendant costs - such as labor and overhead costs - also need to be factored in.
3. 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 dining restaurant is better located in a busy, upscale market than on the outskirts of a city.
4. Promotion: Since a service, the 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.
We now look at the 3 new elements of the services marketing mix - people, process, and physical evidence - which are unique to the marketing of services.
5. 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.
6. Process: The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers.
7. Physical Evidence: Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance the customer experience. Thus, there are hair salons that have well-designed waiting areas often with magazines and plush sofas for patrons to read and relax while they await their turn.
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