Challenges in the Era of Globalization - iaabd

Proceedings of the 12th Annual Conference © 2011 IAABD
The marketing mix is the set of tools available to an organization to shape the nature of its offer to
consumer. The marketing of goods involves the 4 Ps of Product, Price, Promotion and Place.
More recently, the 4 Ps of the marketing mix have been found to be too limited in their application to
services.
The following are particular problem which limit the usefulness of the 4 Ps to services: (Palmer (2008)
The intangible nature of services is overlooked in most analyses of the mix as an example; the product
mix is frequently analyzed in terms of tangible design properties, which may not be relevant to a service.
Also, physical distribution management may not be an important element of place mix decisions.
The price element overlooks the fact that many services are used by the public sector without a price
being charged to the final consumer as it were.
The promotion mix of the traditional 4 Ps fail to recognize the promotion of services that takes place at
the point of consumption by the production personnel for a portfolio manager, the manner in which the
service is produced is an important element of the total promotion of the service.
Products
Products are the means by which consumers’ needs are satisfied by organizations. It is anything that the
organization offers to potential customers. It could be tangible or intangible examples are Bank accounts,
insurance policies or a holiday.
Product mix decision facing a service marketer can be very different from those dealing with the goods.
Pure services are best defined using process description rather than tangible description of outcomes.
Pricing
Price mix decisions include strategic and tactical decisions about the average level of prices to be
charged, discount structures, terms of payment and the extent of price discrimination among different
groups of customers. The intangibility of services can mean that price is a very significant indicator of
quality. Also the personal and non-transferrable nature of many services makes it easy for price
discrimination Palmer (2008).
Promotion
Traditional promotion mix element includes various methods of using messages to communicate the
benefits of a product to potential consumers. In addition, the promotion of services often needs to place
particular emphasis on increasing the apparent tangibility of a service.
The promotion mix for services is wider than that for goods because services production personnel are an
important element of the promotion mix Palmer (2008).
Place
Place decisions refer to the ease of access that potential customers have to a service. Palmer (2008)
reiterates that these decisions can involve physical location decision (as in deciding an office place for a
finance institution), which intermediary to use in making a service accessible to a consumer. For services,
the concept of accessibility is more important than the traditionally defined place.
People
Palmer, (2008) maintains that for most services, people are vital element of the marketing mix. In the
service sector, people have a high level of contact with customers as such service organizations must
clearly specify what is expected from personnel in their interaction with customers. Thus people planning
are important marketing mix decisions and not regarded as purely personnel decisions.
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