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7ps of service organization:

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 implicationsof these are slightly different in case of services.

1.Product:In 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 thereforeassumes particular significance. However, too much customization would compromise

the standard delivery of the service and adversely affect its quality. Hence particular care

has to be taken in designing the service offering. If we take the example ofdoctors

treatment is the product, hair cut, airline service.

2.Pricing:Pricing of services is tougher than pricing of goods. While the latter can be priced easilyby taking into account the raw material costs, in case of services attendant costs - such aslabor and overhead costs - also need to be factored in. Thus a restaurant not only has to

charge for the cost of the food served but also has to calculate a price for the ambience

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provided. The final price for the service is then arrived at by including a mark up for an

adequate profit margin. The pricing of doctors treatment is difficult because it isdifficult to measure costs of goods sold.

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 providershave to give special thought to where the service would be provided. Thus, a fine dine

restaurant is better located in a busy, upscale market as against on the outskirts of a city.

Similarly, a holiday resort is better situated in the countryside away from the rush andnoise of a city.

4.Promotion:Since a service offering can be easily replicated promotion becomes crucial indifferentiating 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. This is crucial in attracting customers in a segmentwhere the services providers have nearly identical offerings.

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. The challengesencountered by the service marketers -like heterogeneitythe requirements of the

customers while delivering service and perishability and absence of inventory ,

intangibility of offers and absence of patent protection , etc necessitate the extension ofthe marketing mix to include PEOPLE, PROCESS and PHYSICAL EVIDENCE

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 theservice provided by its staff. The same is true of banks and department stores.

Consequently, customer service training for staff has become a top priority for many

organizations today. People in Service In service, the personnel come in contact with theprocess of production and consumption of services. The service marketing mix applies

not only to personnel but also recognises the role of participants. In service business , the

service personnel reflects the organisational realities, it is through the interaction with thestaff, the customers forms an opinion of the organisation. People are an essential

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ingredient in service provision; recruiting and training the right staff is required to create

a competitive advantage. Customers make judgments about service provision and

delivery based on the people representing your organisation. This is because people areone of the few elements of the service that customers can see and interact with. The

praise received by the volunteers (games makers) for the London 2012 Olympics and

Paralympics demonstrates the powerful effect people can create during service delivery.

Staff require appropriate interpersonal skills, aptititude, and service knowledge in order

to deliver a quality service. In the UK many organisations apply for the "Investors inPeople" Accreditation to demonstrate that they train their staff to prescribed standards

and best practices.

6.Process:The process of service delivery is crucial since it ensures that the same standard of

service is repeatedly delivered to the customers. Therefore, most companies have a

service blue print which provides the details of the service delivery process, often goingdown to even defining the service script and the greeting phrases to be used by the

service staff. Service Process Refers to how a service is provided or delivered to the

customer For this the service process must be designed Designing a service process

system involves issues such as location, facility design and layout for effective customerand work flow, procedures and job definitions, measures to ensure qwlty, extend of

customer involvement, equipment selection and adequate service capacity.

This element of the marketing mix looks at the systems used to deliver the service.

Imagine you walk into Burger King and order a Whopper Meal and you get it delivered

within 2 minutes. What was the process that allowed you to obtain an efficient service

delivery? Banks that send out Credit Cards automatically when their customers old onehas expired again require an efficient process to identify expiry dates and renewal. An

efficient service that replaces old credit cards will foster consumer loyalty and confidencein the company. All services need to be underpinned by clearly defined and efficient

processes. This will avoid confusion and promote a consistent service. In other words

processes mean that everybody knows what to do and how to do it.

7.Physical Evidence:Since services are intangible in nature most service providers strive to incorporate certain

tangible elements into their offering to enhance customer experience. Thus, there are hair

salons that have well designed waiting areas often with magazines and plush sofas forpatrons to read and relax while they await their turn. Similarly, restaurants invest heavily

in their interior design and decorations to offer a tangible and unique experience to their

guests. Physical evidence:

Physical evidence A service encounter does not take place in a vacuum A service

transaction generally involves the interaction of the service provider with the customer ina service environment. The service environment along with the tangible cues is termed as

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physical evidence . There are 2 perspective to physical environment: Process of operation

perspective Marketing perspective. Physical facilities .. Like building, furniture,

equipments, stationery, brochures. it reinforces the proposed image of the serviceorganisation. The elements of physical evidence are: Essential Evidence Peripheral

Evidence Essential Evidence- Constitutes a dominant part of the service facility.

Technical facilities based on which service takes place. Cannot be passed on toconsumer, except may be on temporary basis (eg: hotel building, aircraft in airlines,office and furniture in consultancy firm). Peripheral Evidence- Not very visible in

relation to dominant physical evidence. They definitely have an impact on the

consumer perception about the qwlty of the service These include business cards,stationery, brochures, etc These evidences are passed over to customers in the course

of transaction the service is provides without these items yet can be used to enhance

corporate image Physical Environmentthe physical setting or the service

environment within which the service takes place. The service space Includes_ theexterior attributes (the parking area, front elivation of the building, landscape) the interior

attributes (the design, ambiance, layout, etc)The important elements of physical settings

are as follows: Ambiance Dcor and Artifacts Spatial Layout and Functionality Physicalevidence is about where the service is being delivered from. It is particularly relevant to

retailers operating out of shops. This element of the marketing mix will distinguish a

company from its competitors. Physical evidence can be used to charge a premium price

for a service and establish a positive experience. For example all hotels provide a bed tosleep on but one of the things affecting the price charged, is the condition of the room

(physical evidence) holding the bed. Customers will make judgments about the

organisation based on the physical evidence. For example if you walk into a restaurantyou expect a clean and friendly environment, if the restaurant is smelly or dirty,

customers are likely to walk out. This is before they have even received the service.

There are many examples of physical evidence, including some of the following:

The building itself (such as prestigious offices or scenic headquarters). This includes thedesign of the building itself, signage around the building, and parking at the building,

how the building is landscaped and the environment that surrounds the building. This ispart of what is known as the servicescape.

The interior of any service environment is important. This includes the interior design ofthe facility, how well it is equipped, internal signage, how well the internal environmentis laid out, and aspects such as temperature and air conditioning. This is also part of the

servicescape.

Packaging. Internet/web pages. Paperwork (such as invoices, tickets and dispatch notes). Brochures. Furnishings. Signage (such as those on aircraft and vehicles). Uniforms and employee dress. Business cards. Mailboxes. Many others . . .