MODULE 1. Services 4 Ps
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1 MODULE 1 Services 4 Ps 4 Ps What are the 4 Ps of Marketing? Who coined the term? Why are 4 Ps important? 4 Ps are Product, Price, Promotion & Place McCarthy coined the term Marketing is all about management of 4 Ps 4 Ps define an offering s positioning What is positioning? 4 Ps Product We use the term product in a generic way, offering is a better term What are some main differences between a physical product and a service? 4 Ps Product Vs. Service Service is intangible no ownership of anything at end Service is inseparable from production Hence, not possible to store it Cannot inventory it 1
2 ence time is important Services need to be delivered real time Customers involved in production of service Achieving a standardised offering is hard There is variability Services maybe high on credence qualities Distribution possible through other sources Importance of the human element greater 4 Ps Product Okay, so how do some of these differences impact the first P? Which ones do you think affect the first P more? It is very important to manage the evidence tangibilise the intangible Manage the servicescape How? First, see whether service has any tangible parts at all Then, work on enhancing tangible cues and supplying new ones, is possible Thus, doctor s office should look neat, clean, hygienic Professor s room should look untidy, full of papers and books and random material! Beggar should look unkempt and dirty! It is also important to have supplementary services why? Since they may be necessary for the performance of the main service E.g. Car park in hotel Services cannot be inventoried 2
3 Thus, you go to a specialist, see 20 people waiting What does the nurse tell you? You go to service your bike Waiting room with TV, newspapers Same case with barber Thus, without supplementary services, will lose customers Hence, e.g., resort needs to have plenty of attractions Must give total customer experience, the entire package is important Hence size becomes important Disneyland has 100 s of attractions IIT s are huge, though small by US universities comparison It is no coincidence that the world s No. 1 co is a service co It is also important to have a service blueprint A layout of what happens in the service production process Factory has one, here it is more important, why? It is important to carefully check the weak links Plus, people are part of the product, in a sense Also, extreme efforts need to be taken in order to standardise service offering After all, customers pay the same, hence, expect equal treatment How to standardize 4 Ps - Price Which service-product differences pertain to price? Services are heterogenous and price comparison becomes hard e.g. life insurance Retailer displays prices of Surf, Rin, Tide Plus, service provider gives only guesstimate E.g. X has severe stomach ache, can Dr. give him exact estimate? 3
4 Customer needs vary, hence price comparisons are harder still Price may be a cue for quality Unique models possible e.g. Annapoorna in Singapore, KL What are the three common approaches to pricing decisions? Cost-based, competition-based and demand-based pricing Let us study each briefly Some example of each? Cost-based pricing is used by say us in special programmes However, there are special problems here, like? Estimating costs is hard, time is hard to estimate Value is different to the customer e.g. tailoring a suit vs. shorts Demand-based pricing is also hard, since there are ethical concerns What are these and what to do? When the Cbe bomb blast happened, auto drivers charged Rs. 500 for 5 kms!! Companies cannot do this, hence, shift demand to other time, wherever possible Example would be? Competition-based pricing is quite popular Though I suspect that pricing will be done using all 3 Ps - Place What are some relevant differences here? What can be done about these? In a sense, services are easier to distribute, since logistical nightmare is not present to that extent Standardisation is a problem however Plus service distribution, delivery and production all overlap Hence, place overlaps to some extent with product 4
5 But not fully PO is present in 1000 s of places PDS is quite poor NIIT has hundreds of locations There are unique aspects like franchising, which work to Marketer s advantage Who pioneered this? What is the product (good) equivalent? Plus in services, have the option of online delivery in many cases I ke software so free medical advice Not so haircut! 4 Ps Promotion Promotion now is termed IMC What are some differences that are relevant here? Use attractive, vivid information since no product is there Hence, holiday resorts use excellent imagery As do airline ads Focus on the tangibles See above Feature employees/users Again, one finds this in several airline ads, educational institutions ads If possible, smiling students, professors all giving the image of one happy family Summary Services have certain unique elements These have to be taken into account while managing ]4 Ps Usually a problem However, sometimes also an advantage 5
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