Marketing Mix & Service Extension (3Ps)
The Marketing Mix is a set of controllable variables that the organisation can use to influence the buyer’s response (Philip Kotler, 2009)1. The Chartered Institute of Marketing (CIM, 2008) promotes the philosophy of a Market Oriented organisation, where by the target market and user is central to every single decision made, and that decision should be in the best interests of the target market, whilst doing so at a profit. It is within this approach of placing the user at the center that marketing and design share a mutual dialogue.
An organisation will execute its strategy through the application and blending of the marketing mix; describing the combination of tactics used by an organisation to achieve its objectives by marketing its products or services effectively to a particular target market / segment. More commonly it is also referred to as the ‘4 Ps’ – Product, Price, Promotion and Place:
Product - this involves ultimately what products and services will be marketed. Key decisions include design, core product benefits and features, quality, branding and packaging.
Price - as the only element in the mix that develops revenue you can appreciate it is one of the most important, decisions include price levels, methods of payment and discounts.
Place - deals with making products and service available, decisions relate to items such as shop fronts, warehouse, distribution channels and market coverage.
Promotion - decisions relate to advertising, PR, direct marketing, sales and items such as exhibitions. Each of these items can be used in many, many ways. With such a broad range of media available the possibilities are endless, but as with all things in the plan we need to maintain out customer focus and this will help determine channels used.
With the growth of the service economy the Marketing sector made consideration of the service characteristics which resulted in the creation of an additional three marketing mix elements, the service extension, to Borden’s original 4Ps; product, price, place and promotion.
These extra considerations gives the marketer the framework to deal with some of the issues raised by ‘service characteristics’. It also allows for further tailoring of the service to best resonate with the target market.
In the process of meeting customer needs an organisations staff will directly or indirectly affect the quality of the service delivered. Often this element relates to the direct contact with the customer in service marketing and consumption. This makes this element a powerful tool of the marketing mix in building a sustainable competitive advantage. The ‘people’ element also considers the possibility of consumer-consumer interaction.
Automation of a service provides the benefit of removing one side of the service; that of the service provision. The customer will still judge the quality of the service based on their experience, how easy or how quick, for example the automation is to use.
Even within the traditional manufacturing sectors the importance of quality customer service, the ‘people’ element is recognised and included in the mix to develop competitive advantage.
This element relates to the physical properties of the services and the tools used to market the service offer. With tangible products the customer can actual touch the product, a physical object that they can interact with before a decision has been made on whether it meets their needs and ultimately should they purchase the item or not. With services, and their intangibility, this is not possible. This can be particularly problematic when dealing with a customer who has not used the service before. The customer will use other physical signals as evidence in evaluating the service providers offering.
The process element relates to how the customer accesses the product or service. ‘Process’ provides a framework for analysing the delivery of the service. Although developed with service marketing in mind its importance has again become recognised when marketing physical products.
One fundamental technique is customer journey mapping, where does the target market start to interact with the product, what do they do next? This exercise helps to identify customer ‘touch’ points’, places in the customer journey where an organisation can communicate with the user.
‘Process’ also deals with delivering the service in terms of efficiency, this can have an effect on time scales that an organization can use to improve on profits or the number of people served in a given time.
The marketing mix, including the service extension, can be used to drive change, create new products, help in choosing a pricing strategy, placing so products are easily accessible and promoting a product to all the right customers through the right channels. Remember the mix (or indeed any part of a marketing plan) is a working document and should respond and change to new external situations in the broader environment.