Team 4 Services & Sales SERVICE & SALES 8 P’s of Service Marketing 28.02.2010.

Team 4 Services & Sales

SERVICE & SALES8 P’s of Service Marketing28.02.2010


• Marketing can be viewed as: A strategic and competitive thrust pursued by top management. A set of functional activities performed by line managers. A customer-driven orientation for the entire organization.

• Marketing is the only function to bring operating revenues into a business; all other functions are cost centers.

• The “8Ps” of Services Marketing are needed to create viable strategies for meeting customer needs profitably in a competitive marketplace.

Introduction


• Mercadona is a distribution company operating in the supermarket segment. It is backed by 100% Spanish capital and its CEO is Juan Roig. Nationally, it is present in 46 provinces in 15 autonomous communities with a network of 1,266 supermarkets.

• Its facilities and customers are attended by more than 62,000 individuals throughout the different stages of the process, 100% of which have permanent job positions.

• Its supermarkets have an average of 1,300 square metres of retail floor space and are based on a model of urban commerce that is close at hand with an ample selection in fresh and dry groceries, beauty and household supplies as well as pet food.

Introduction


• In 2008, Mercadona achieved a turnover of 13,986 billion euros, what means the 1,4% of the GDP (PIB) in Spain.

Introduction


1. Product Elements

2. Place and Time

3. Price and Other User Outlays

4. Promotion and Education

5. Process

6. Physical Environment

7. People

8. Productivity and Quality

8 P’s of Service Marketing


• Embrace all aspects of service performance that create value

• Core product responds to customer’s primary need• Array of supplementary service elements

Help customer use core product effectively Add value through useful enhancements

• Planning marketing mix begins with creating a service concept that: Will offer value to target customers Satisfy their needs better than competing alternatives

P1. Product Elements



• OWN BRAND - WHITE LABEL PRODUCT: Company of alimentation, MERCADONA propose more than

9.200 products, many of them dedicate only to MERCADONA (clavo, bonka, don simon...)

A white label product is a product produced by one company (the producer) that other companies (the marketers) rebrand to make it appear as if they made it.

"Mercadona buys from a manufacturer in bulk and puts its own name on the product : HACENDADO / BOSQUE VERDE / DELIPLUS"

"It gives Mercadona:More freedom and flexibility in pricingMore control over product attributes and qualityHigher margins (or lower selling price)Eliminates much of the manufacturer's promotional costs“

P1. Product Elements



• Marketing can be viewed as:• Delivery decisions: Where, When, How• Geographic locations served• Service schedules• Physical channels• Electronic channels• Customer control and convenience• Channel partners/intermediaries

P2. Place & Time



• Marketing can be viewed as:• OWN DISTRIBUTION CHANNEL

1.474.775 m² of sale surface, and 12.1% of the share of market Presence in 46 cities. 1.137 supermarkets in 46 provinces. Once the product is bought from the manufacturer, it is stored in

the Mercadona logistics centres, which subsequently distribute the product among the shops by its own distribution channel.

Mercadona gives the customer freedom and convenience, because the customers can buy what they want when they want it, all in the same place and always with savings

P2. Place & Time



• Marketing can be viewed as:• TOTALLER STRATEGY

Mercadona offers their clients all the product in order enable them to do the "global shopping"

Mercadona offers an ample selection in fresh and dry groceries, beauty and household supplies as well as pet food

P2. Place & Time



• Marketing can be viewed as:• SERVICES• FRESH BAKED BREAD• HOME DELIVERY SERVICE• TELEPHONE ORDERS• ONLINE SHOPPING

P2. Place & Time



• Marketing can be viewed as:• Marketers must recognize that customer outlays involve

more than price paid to seller• Traditional pricing tasks:

Selling price, discounts, premiums Margins for intermediaries (if any) Credit terms

• Identify and minimize other costs incurred by users: Additional monetary costs associated with service usage (e.g.,

travel to service location, parking, phone, babysitting, etc.) Time expenditures, especially waiting Unwanted mental and physical effort Negative sensory experiences

P3. Price and Other User Outlays



• Marketing can be viewed as:• A.L.P. (ALWAYS LOW PRICES)

The commercial strategy that the company has been developing since 1993 is called A.L.P. (Always Low Prices).

Buying from a manufacturer in bulk enables Mercadona to have a lower selling price

With ALP, the customers receive genuine savings because all of Mercadona products are ALWAYS AT LOW PRICES.

P3. Price and Other User Outlays



• Marketing can be viewed as:• Informing, educating, persuading, reminding customers• Marketing communication tools

Media elements (print, broadcast, outdoor, retail, the Internet, etc.) Personal selling, customer service Sales promotion Publicity/PR

• Imagery and recognition Branding Corporate design

• Content Information, advice Persuasive messages Customer education/training

P4. Promotion & Education



• Marketing can be viewed as:• LIMITED ADVERTISEMENT INVESTMENT

Total quality, liberty of selecion, variety.Services after sales ( atencion al cliente SAC ) : more than 1 milon of consultation

The main ways of communication are to build the Mercadona´s company image (quality, prices, sutervices) and get spread by the word of mouth of the customers

To a certain extent, White Label products take advantage of the name-brand as a reminder, due to the fact that when the customer see a name-brand product, they think in the equivalent white label product

P4. Promotion & Education



• Marketing can be viewed as:• How firm does things may be as important as what it does• Customers often actively involved in processes, especially

when acting as co-producers of service• Process involves choices of method and sequence in

service creation and delivery Design of activity flows Number and sequence of actions for customers Nature of customer involvement Role of contact personnel Role of technology, degree of automation

• Badly designed processes waste time, create poor experiences, and disappoint customers

P5. Process



• Marketing can be viewed as:• WHY MERCADONA CAN OFFER ALP?

Because Mercadona buy products directly from the source. Because Mercadona set up long-term agreements with

manufacturers, which lets them offer their customers high-quality products at prices that are extremely low and stable.

• LOGISTICS NETWORK More than 2000 suppliers, 800 millons euros invest. Mercadona can guarantee the efficiency of the supply chain with

its logistics centres in Spain as: Ingenio centre in Gran Canaria, Riba-Roja de Túria (Valencia),

Antequera (Málaga), Sant Sadurní de Anoia (Barcelona), San Isidro (Alicante), Huévar (Sevilla), Granadilla de Abona (Tenerife) and Ciempozuelos (Madrid), Villadangos del Pbuiltáramo (León), Guadix (Granada) and Pla-Za (Zaragoza).

P5. Process



• Marketing can be viewed as:• Design servicescape and provide tangible evidence of

service performances• Create and maintain physical appearances

Buildings/landscaping Interior design/furnishings Vehicles/equipment Staff grooming/clothing Sounds and smells Other tangibles

• Manage physical cues carefully— can have profound impact on customer impressions

P6. Physical Environment



• Marketing can be viewed as:• "ENVIRONMENTS"

Supermarket sections laid out in “environments” Customers can buy what they want when they want it, all in the

same place Spacious and modern facilities with a full range of services so that

the shopping can be as convenient as possible Butcher´s Shop replacement with modern counters of meat 8 Blocs Logistics and funcionement 3 Blocs of logistics project and execusion: Granada, Leon and

Zaragoza.




• Marketing can be viewed as:• SERVICES• CUSTOMER PARKING• BAG LOCKERS• CLIMATE CONTROL• BANK CARDS




• Marketing can be viewed as:• Interactions between customers and contact personnel

strongly influence customer perceptions of service quality • The right customer-contact employees performing tasks

well Job design Recruiting Training Motivation

• The right customers for firm’s mission Contribute positively to experience of other customers Possess—or can be trained to have— needed skills (co-

production) Can shape customer roles and manage customer behavior

P7. People



• Marketing can be viewed as:• SERVICES DATA

3.700 workers, investement of about 72 million of euros for the formacion (1.200 e by workers). Bonus if the companie reach his objectives : 160 millions, share between all the workers.

• "THE BOSS" MERCADONA implemented its TOTAL QUALITY approach in

1993. This decision prompted the company to rearrange its priorities as follows: Customers, otherwise known internally as the "Boss", Workers, Suppliers, the Company and Capital.

The TOTAL QUALITY model has led Mercadona to regard Workers as their second priority. An example of this is that 100% of the more than 62.000 individuals that form a part of the organisation are permanent.

P7. People



• Marketing can be viewed as:

It also bears mentioning that workers are paid 100% of their salary in the event of occupational disability, and that their minimum salaries are higher than the average paid in the sector.

The more than 62.000 individuals that make up the company receive TOTAL QUALITY training, with each worker enrolling in specific courses of 70 hours/year, among others.

Training of the personnel in butcher´s shops: Transformation of the Butcher in a customer advisor

Reply complaints is an obligation for the employees. A complaint is understood as an oportunity.

• FREE CUSTOMER SERVICE LINE

P7. People



• Marketing can be viewed as:• Productivity and quality must work hand in hand • Improving productivity key to reducing costs• Improving and maintaining quality essential for building

customer satisfaction and loyalty• Ideally, strategies should be sought to improve both

productivity and quality simultaneously—technology often the key Technology-based innovations have potential to create high

payoffs But, must be user friendly and deliver valued customer benefits

P8. Productivity and Quality



• PRODUCTIVITY DATA Contribution to the spanish PIB : 2.516 million euros. Investment to the "green policy" (medio-ambiantal) : 17 millions. EBITDA: 336 mil (+39%) Productivity: 220 000€

• MAXIMUM QUALITY MERCADONA guarantees their clients the Maximm Quality of its

products at the moment of purchase and at the moment of consumption

MERCADONA is making efforts to ensure intrinsic product quality through its Life Principle strategy.

MERCADONA buys their products directly from the source, without go-betweens.




MERCADONA schedule our purchases, which cuts down on transport and storage times, with products being kept at their optimal temperature.

MERCADONA select the finest quality and make sure that products arrive to the customers in the least time possible and with the maximum freshness.

All of MERCADONA´s products are subject to rigorous quality controls in order to ensure that they are maintained in perfect conditions of hygiene and freshness.

MERCADONA has their own exclusive brands that are supplied by the leading manufactures, whose products are checked and guaranteed to sell them in the finest conditions.

Productivity and quality must work hand in hand Improving productivity key to reducing costs




Improving and maintaining quality essential for building customer satisfaction and loyalty

Ideally, strategies should be sought to improve both productivity and quality simultaneously—technology often the key



Team 4 Services & Sales SERVICE & SALES 8 P’s of Service Marketing 28.02.2010.

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