7 Ps of Marketing | 7Ps explain with an example
Basics of service marketing: 7Ps explain with an example
7 Ps of Marketing! In marketing activities, the importance of service marketing targeting intangible services is increasing year by year. This time, I would like to explain the concept of service marketing and the basic framework “7P” for putting it into practice, while introducing examples.
table of contents
- Service Marketing Overview
- Service characteristics
- Intangible / intangible: intangibility
- Simultaneity/indivisibleness: simultaneity
- Extinct / non-storable: perishability
- Heterogeneity: heterogeneity
- What is 7P?
- Process (business process/sales process)
- Physical Evidence
- 7P use case
Service Marketing Overview
The 1960s, when 4P was advocated, was an era of mass marketing that developed for tangible goods such as automobiles and home appliances, but in the 1970s, it was visible in various fields such as information, finance, travel, and restaurants. There are a need for marketing targeting “service products (intangible goods)” that are not available. The service marketing mix that Philip Kotler added three P elements to McCarthy’s 4P is called 7P. Service marketing refers to a marketing strategy that takes into account the unique characteristics of services as ancillary functions of the service industry and products.
Currently, the service industry in the United States has reached 80% of GDP, and in Japan, about 70% of production is generated from service-related industries, and its importance is increasing. In addition, service marketing does not simply refer to activities in the field of the “service industry”, but applies to customer contact points in all industries. For example, hospitals are not a service industry, but even in clinics, patients are customers, and it is required to carry out sales activities that emphasize contact with customers.
Service characteristics (7 Ps of Marketing)
Kotler, who advocated 7P, characterized the characteristics of the service as follows.
Intangible / Intangible
Services are intangible and intangible goods
service production and consumption occur at the same time
Nonuniformity / volatility
services are difficult to standardize in quality depending on who provides them and when
Extinct / non-storable
services cannot be stored
Intangible / intangible: intangibility
Since the service has no shape, it cannot be touched, tasted, or confirmed as an entity before purchase. Therefore, it is necessary to visualize the service. For example, a remodeling company publishes past service provision examples and introduction examples on pamphlets and websites so that they can be seen.
Increase the tangibility of services
Since the interrelationship between the provider and the beneficiary becomes important in inseparability, it is necessary to improve quality and service and build a relationship of trust with consumers. In addition, the simultaneity in which the service provider and the service provider must exist at the same time requires the solution of distance and personnel problems. With one-on-one services, the number of people who can receive the service is limited, but it is necessary to create a system that can accommodate many customers, such as incorporating group lessons and video lessons in the cram school and utilizing seminars in the consulting industry.
Increasing the importance of mutual relationships between providers and beneficiaries
・ Providing high quality
・ Building relationships of trust
Solving distance and personnel problems
・ Creating a mechanism to deal with multiple consumers at once
Extinct / non-storable: perishability
The service cannot be stored or stored. For example, hotel rooms and live tickets cannot be carried over. If it is unsold, it cannot be sold. Therefore, demand management and supply management are required. For example, in the case of a hotel, we will try to stimulate demand by discounting during non-peak hours or hire part-time employees to increase supply during peak hours.
Thorough receipt management
The quality of services varies depending on who provides them and when they provide them, and it is difficult to always provide the same quality. At the hairdresser, the skill will differ depending on the beautician, and at the restaurant, the taste may differ depending on the condition of the cook. Still, we need to ensure that the quality is always satisfying. We will incorporate manuals, standardization of business flows, and process management.
Manage to maintain constant quality at all times
What are the 7 Ps of Marketing?
Let’s delve into the 7P proposed by Kotler. 7P stands for the following 7 Ps.
Price (Price / Pricing) = Pricing Strategy
Place (distribution / channel) = distribution strategy
Promotion (promotion / promotion) = sales promotion strategy
Process (business process/sales process)
These seven items are collectively called the 7 Ps of Marketing. I have already explained 4P in detail last time, so I will explain 3P.
Personnel refers to all personnel who provide services to customers, including employees, related parties, partner companies, etc., in the company’s business environment. It doesn’t matter to the customer, whether the service provider is an employee of the company or an employee of a partner company. All personnel must provide services that satisfy their customers under their control.
Process (business process/sales process)
Process refers to various ways of servicing customers. In order to provide high-quality services, for example, customer centers are required to improve CRM and improve efficiency, and in order to improve payment methods, it is necessary to review the sales process.
Physical Evidence is, in a nutshell, to provide customers with security and security. We provide services that remove customer anxiety and visualize guarantees, such as certificates and contracts, and traceability that specifies the producer of food.
The above are the elements of 7P, but companies need to think about which of 7P to strengthen in order to increase profits. The order is not particularly important in putting these 7P marketing mixes into practice, but it is necessary to consider the connections such as balance, synergies, and consistency of each. It is a framework for devising what and what to strengthen and combine 7P to achieve the goal, to differentiate from competitors, to gain superiority, and to obtain the maximum effect.
7 Ps of Marketing use case
With the product concept of providing “unusual experiences,” original characters such as Mickey Mouse provide fantasy and nostalgia.
Oriental Land has raised the price of passports for the third consecutive year since 2013 in line with the increase in the number of visitors. The reasons for this are to reduce the number of visitors, reduce congestion in the park, and secure investment funds for the park in the future. Even with the price increase, the large number of 30 million people has been maintained so far, but it seems that it has slowed down compared to the increase in the number of visitors before the price increase. In fact, 2015 and 2016 are below 2014. Disney makes a profit that covers the decrease in the number of visitors by raising the average customer price per person, but if the price is raised and the quality is lowered, it will cause customer attrition. Disney is currently preparing a major renewal, including a new theme zone for the blockbuster movie Frozen, but is investing in a price increase.
The location of Tokyo Disney Resort is ideally located within a 50km radius of a day trip with more than 30 million customers. We thoroughly scrutinize the “distribution” of where to operate when opening the park.
Disney has a unique promotional strategy. Based on the concept of “only one person”, the trademark Mickey Mouse is devised so that it does not exist at the same time as possible with Disney resorts around the world. To the last, we have a promotion system that adheres to the concept of providing “fantasy” to ensure consistency.
Employees working at Disney Resort are called “casts” and have a thorough education system. The cast has a basic one-year contract to prevent it from becoming a rut, and by establishing a division of labor system, we try to fulfill each person’s role perfectly.
Process (service provision process)
At Disney, we are devising ways to provide services tailored to each customer, rather than standardized services. As an example, we issue a pass for children who have been restricted in height so that they can ride the vehicle the next time they visit the park without waiting. In addition, we have a system in place to provide better services according to the condition of, customers such as people with disabilities and foreigners.
The design of the facility and the physical elements such as the arrangement and color of the objects have been devised to create the extraordinary concept. For example, in order to intentionally change the ratio of buildings and not to see the outside real world, transport vehicles such as trucks that carry goods and ingredients are designed to pass through underground passages.
Service marketing is thus incorporated into the marketing activities of many successful companies. Services are inherently highly innovative for differentiation. Especially for small and medium-sized enterprises that cannot beat the big ones in price competition, service-based management innovation can be an important factor for future growth. Understand what a service is and be able to use it strategically.