What are is 7Ps Marketing Mix and how should it be used?
The marketing mix is a familiar marketing strategy tool, which you will probably know, was traditionally limited to the core 4Ps of Product, Price, Place and Promotion. It is one of the top 3 classic marketing models according to a poll on Smart Insights.
The 7Ps model was devised by E. Jerome McCarthy and published in 1960 in his book Basic Marketing. A Managerial Approach.
We've created the graphic below so you can see the key elements of the 7Ps marketing mix.
The 4Ps were designed at a time where businesses sold products, rather than services and the role of customer service in helping brand development wasn't so well know. Over time, Booms and Pitner added three extended ‘service mix P’s': Participants, Physical evidence and Processes, and later Participants was renamed People. Today, it's recommended that the full 7Ps of the marketing mix are considered when reviewing competitive strategies.
The 7Ps helps companies to review and define key issues that affect the marketing of its products and services and is often now referred to as the 7Ps framework for the digital marketing mix.
In Dave Chaffey's book: Digital Marketing: Strategy, Implementation and Practice, this model was refreshed and applied to online channels to give a practical approach which works well for multichannel businesses. An eighth P, ‘Partners’ is often recommended for businesses to gain reach online (first mentioned in Emarketing Excellence by Dave Chaffey and PR Smith although some would argue it's part of Place).
How can I use this model?
Companies can use the 7Ps model to set objectives, conduct a SWOT analysis and undertake competitive analysis. It's a practical framework to evaluate an existing business and work through appropriate approaches whilst evaluating the mix element as shown below and ask yourself the following questions:
- Products/Services: How can you develop your products or services?
- Prices/Fees: How can we change our pricing model?
- Place/Access: What new distribution options are there for customers to experience our product, e.g. online, in-store, mobile etc.
- Promotion: How can we add to or substitute the combination within paid, owned and earned media channels?
- Physical Evidence: How we reassure our customers, e.g. impressive buildings, well-trained staff, great website?
- People: Who are our people and are there skills gaps?
- Partners: Are we seeking new partners and managing existing partners well?.
An example of a company using the 7Ps strategy
Take a look at HubSpot as an example, which was founded in 2006; Hubspot has 8,000+ customers in 56 countries and sells software. What does their marketing mix look like?
This is a top level overview; you would take this into greater detail and ask the following questions:
1. Products/Services: Integrated toolset for SEO, blogging, social media, website, email and lead intelligence tools.
2. Prices/Fees:Subscription-based monthly, Software-As-Service model based on number of contacts in database and number of users of the service.
3. Place/Access: Online! Network of Partners, Country User Groups.
4. Promotion: Directors speak at events, webinars, useful guides that are amplified by SEO and effective with SEO. PPC Social media advertising, e.g. LinkedIn.
5. Physical Evidence: Consistent branding across communications.
6. Processes: More sales staff are now involved in conversion.
7: People: Investment in online services.
8. Partners: Hubspot looks to form partnerships with major media companies such as Facebook and Google plus local partners including Smart Insights who it is collaborating with on research in Europe.
What to watch for
When using the 7Ps as a model to conduct a marketing audit, I look at each of the Ps. It’s unwise to ignore an area unless it is completely outside your control.
Original Sourceof 7Ps?
Bitner, M. J. and Booms, H. (1981). Marketing Strategies and Organization: Structure for Service Firms. In Donnelly, J. H. and George, W. R. (Eds). Marketing of Services, Conference Proceedings. Chicago, IL. American Marketing Association. p. 47- 52.
McCarthy, E. J. (1964). Basic Marketing. Richard D. Irwin. Homewood, IL.
Recommended Guide: Essential Marketing Models
In our free, illustrated guide to 15 classic planning models diagrams we explain what they are and give examples of why and how to apply them in business.
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The 7 Ps of Services Marketing
The first four elements in the services marketing mix are the same as those in the traditional marketing mix. However, given the unique nature of services, the implications of these are slightly different in case of services.
- Product: In case of services, the product is intangible, heterogeneous and perishable. Moreover, its production and consumption are inseparable. Hence, there is scope for customizing the offering as per customer requirements and the actual customer encounter therefore assumes particular significance. However, too much customization would compromise the standard delivery of the service and adversely affect its quality. Hence particular care has to be taken in designing the service offering.
- Pricing: Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in case of services attendant costs - such as labor and overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambience provided. The final price for the service is then arrived at by including a mark up for an adequate profit margin.
- Place: Since service delivery is concurrent with its production and cannot be stored or transported, the location of the service product assumes importance. Service providers have to give special thought to where the service would be provided. Thus, a fine dine restaurant is better located in a busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is better situated in the countryside away from the rush and noise of a city.
- Promotion: Since a service offering can be easily replicated promotion becomes crucial in differentiating a service offering in the mind of the consumer. Thus, service providers offering identical services such as airlines or banks and insurance companies invest heavily in advertising their services. This is crucial in attracting customers in a segment where the services providers have nearly identical offerings.
We now look at the 3 new elements of the services marketing mix - people, process and physical evidence - which are unique to the marketing of services.
- People: People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff. The same is true of banks and department stores. Consequently, customer service training for staff has become a top priority for many organizations today.
- Process: The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Therefore, most companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff.
- Physical Evidence: Since services are intangible in nature most service providers strive to incorporate certain tangible elements into their offering to enhance customer experience. Thus, there are hair salons that have well designed waiting areas often with magazines and plush sofas for patrons to read and relax while they await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests.
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