Marketing has over the years metamorphised from pure sales to strategy. Management Gurus have given different dimensions to marketing. The very old product concepts have been replaced with customer concept. Organizations used to create products which they believed can be sold by promoting the features and price of the product. The real need of the customer was never given any heed. Today products are designed and marketed taking the views of the customers first. Ultimately it is the customer who decides what product he wants to buy. There is a need to evolve specific strategies to win the customers hearts. Mind share is not important. More than the mind share the heart share is critical. And the best way to a customer’s heart is by providing him with an excellent product follow by an efficient and effective service.
Neil H Borden defined Marketing Mix through the four ‘P’s – Product, Price, Promotion and Place. These four ‘P’s essentially proposed the marketing tools for reaching the customer. The organization had to focus on these ‘P’s to make a headway with the customer and reach a particular level of success. The strategy that an organization follows by adopting the right marketing mix will help to get a larger market share and revenues. Different organizations may focus on different ‘P’s. Sony uses Product mix as its marketing tool, Coke uses Promotion, Wal-Mart uses price and FedEx uses place as a tool. Organizations do no necessarily use only one among the four. They may use different combination based on their core competencies.
Product (ion) Concept
In earlier days companies sold their products based on the assumption that customers would prefer those products that are available in plenty and inexpensive. Later they moved to concept of selling products that had many features in terms of its quality, performance or innovation. Here the companies rarely get the inputs from the customers on what they need and sell products designed by the engineers. The customers have to make do with what was available. Moreover the functional departments within the company was not integrated in that, after the R & D designed the product, Production would manufacture it, Finance would price it and Marketing would sell it. Thus there was no integrated marketing that received the inputs of the stakeholders involved.
Customer Concept
Globalization has changed the name of the game. Customer is pampered with choices as far as products or services are concerned. This has made Customer the King. Customer decides what he needs which is different from the earlier i.e. marketer decides what customer needs. In such a scenario the right marketing mix is important. The organization must get inputs from the customer and target those segments based on the 4 ‘P’s. The right marketing mix will establish the product in the minds of the customer. The Product has to be designed and marketed based on the customer inputs. If it is priced too high the customer will move to the competitor. It should be made available close where the target customer frequents for purchasing. And the promotion has to be done keeping the target in mind.
Services
Services have been available to the customers from a very long time. One can just go back to the earlier centuries when banks provided financial services to the customers. During the earlier centuries, services were not considered to be as important vis-à-vis the product. Most of the services were expected by the customers – say good food and fast response time at the restaurants. Organizations did not compete in terms of services alone. This is because when we consider the example of banks or restaurants it is a necessity for the customer. He will open account in banks for safekeeping or wants a good food from a restaurant. But this dependability on a few banks based on the necessity has changed. Again Globalization and more intense competition among the service companies has given the customer many options to choose from. He may choose a bank that provides many facilities such as ATM, International Credit / Debit cards, Net banking facility and so on. The customer prefers the service provider that provides the most facilities and the best service. Thus Services has gained prominence even more than Product in the last few decades. This is evident from the fact that countries like US, Service Industry is more than 90% of the GDP. Even in India where Manufacturing and Agriculture used to contribute more to the GDP, now Services is contributing up to 50% of the GDP.
7 ‘P’s of Services
With the services gaining more popularity the marketing mix had to be restructured. Now three more ‘P’s were added to services along with the earlier 4‘P’s for Products. These include People, Physical Evidence and Process. People play an important role in services because customer interacts with people while receiving services. Since services are Intangible it should have some kind of Physical evidence to bring in some level of tangibility. Marriott Hotels provides the hospitality services and gives it tangibility by providing an attractive lobby and ambience. Companies can also choose different processes for differentiation such as self-service, drive-ins for restaurants.
Service Characteristic
One important characteristic of a service is its Intangibility. It not possible to quantify or qualify what a good service is. Service is not a measurable quantity. In order to overcome this issue, the service provider makes use of a “Physical Evidence” to tangibilize it. Ex: The beautiful setting and ambience inside the lobby of a hotel is one form of “Physical Evidence” to augment the service. In addition to this there are a few more characteristics that are exclusive to the Services- Variability, Inseparability, Perishability. Services being provided by the employee vary from person to person. Services are produced and consumed immediately. It cannot be stored for future sales like a product. Thus it is inseparable. And it is also perishable. These characteristics make Services more difficult to market.
