Understanding the Marketing Mix and Service Expectations
The Marketing Mix: 7 P’s
The marketing mix consists of key elements that companies use to market their products or services:
- Product: Physical good features, packaging, accessories, branding, product-support services.
- Place: Channel types, exposures, transportations, outlet locations, storage.
- Promotion: Salespeople, advertising, sales promotion, publicity, internet web strategy.
- Price: Flexibility, price levels, terms, discounts, allowances.
- People: All human actors who play a part in service delivery and thus influence the buyer’s perceptions.
- Physical Evidence: The environment in which the service is delivered and where the firm and customer interact, as well as any tangible components that facilitate performance or communication of the service.
- Process: The procedures, mechanisms, and flow of activities by which the service is delivered, consumed, and co-created.
Understanding Service Gaps
The customer gap is the difference between customer expectations and their perceptions of the service received. The provider gaps model suggests that all of these gaps need to be closed:
- Gap 1: The Listening Gap: The difference between customer expectations of service and the company’s understanding of those expectations. This can be due to inadequate customer research, lack of upward communication, insufficient relationship focus, or inadequate service recovery.
- Gap 2: The Service Design and Standards Gap: The difference between the company’s understanding of customer expectations and the development of customer-driven service designs and standards. This can be caused by poor service design, absence of customer-driven standards, or inappropriate physical evidence and servicescape.
- Gap 3: The Service Performance Gap: The difference between the development of customer-driven service standards and actual service performance by company employees. This can stem from deficiencies in human resources policies, customers not fulfilling their roles, problems with service intermediaries, or failures to match supply and demand.
- Gap 4: The Communication Gap: The difference between service delivery and the service providers’ external communications. This can be due to overpromising, ineffective management of customer expectations, or inappropriate pricing.
Factors Influencing Customer Expectations
Several factors influence customer expectations of service:
- Personal Needs: States and conditions essential to the physical or psychological well-being of the customer shape what customers desire in service.
- Personal Service Philosophy: The customer’s underlying attitude about the meaning of service, their highest expectations, and the proper conduct of service providers.
- Derived Service Expectations: Expectations driven by another person or group of people.
Types of Complainers
Customers react differently to service failures:
- Passives: Least likely to take any action and often doubt the effectiveness of complaining.
- Voicers: Actively complain to the service provider but are less likely to spread negative word of mouth, switch, or go to third parties with their complaints.
- Irates: More likely to engage in negative word-of-mouth communication and switch providers.
- Activists: Characterized by an above-average propensity to complain on all dimensions. They will complain, tell others, and are more likely to complain to third parties.
Types of Service Encounters
Service encounters vary in their level of human interaction:
- Remote Encounters: No direct human contact. The tangible evidence and the quality of the technical processes and system become the primary bases for judging.
- Technology-Mediated Encounters: Technology-based communication with a real person in real time, such as basic telephone encounters. There is a greater potential variability in the interaction.
- Face-to-Face Encounters: Direct personal contact between an employee and a customer. Verbal and nonverbal behavior are important. The customer also plays a role in creating a quality service through their own behavior.
The Internet as a Service
The internet is essentially one large service. All businesses and organizations operating on the internet are providing services, whether they are giving information, performing basic customer service functions, facilitating transactions, or promoting social interactions. Although technology and the internet have profoundly changed how people do business and what offerings are possible, customers still want basic service: dependable outcomes, easy access, responsive systems, flexibility, apologies, and compensation when things go wrong.