The 7 Ps of Service Marketing

Is There Such Thing As the Four Ps of Marketing?


Is there such thing as the four Ps of marketing? Temporarily being debated and alternative approaches suggested frequently from across the globe, this is a very valid question in today’s business environment. The industry mix has changed from vastly manufacturing to service-based, which implies various new needs in creating a strong marketing mix that go beyond the traditional four Ps. But does that mean the four Ps have become obsolete?

Let’s start from the beginning. What is the marketing mix and what have the four Ps to do with it? Marketing mix is described as “the set of controllable tactical marketing tools–product, price, place, and promotion–that the firm blends to produce the response it wants in the target market” (Armstrong & Kotler, 2008). Controllable means that these marketing tools are internal factors that an organization has direct influence on, for which reason it can proactively construct and change them according to their needs at anytime. While it is difficult or in most cases impossible to change the marketing mix within a very short time, its limit of anytime is described by the ability of the organization to spend time and ultimately money on this change and its implementation. Having already mentioned product, price, place, and promotion, it is relatively clear what the marketing mix’s four Ps stand for. Product, price, place, and promotion–short the four Ps–are the four internal factors, or the controllable tactical marketing tools as Armstrong & Kotler describe them. Virtually everything that an organization has direct control over can be described under one of these four Ps.

 

The Four Ps of Marketing

The Marketing Mix: Product, Price, Place, Promotion

 

The term marketing mix has first been introduced by Neil Borden during his speech at the American Marketing Association in 1953, and it was Jerome McCarthy who suggested the actual four Ps that are prevailing until today in 1964 (Encyclopedia of management, 2009). Analysing the market situation that they have grown up and made their experiences in, one has to note that it has changed dramatically over the last 100 years. In the early 20th century, the product-making industry was dominating with a market share of around 70 percents. Around the time of the mentioned introduction of the marketing mix in the 50s and 60s, the U.S. had just past the point, where its product-making industry has lost its dominance to service industries. While this was for the first time in U.S. history and white-collared workers were more plentiful than blue-collared workers, the business environment and mentality has not changed immediately but only over time. In fact, all the way up to today, we still use many concepts that had been developed for the product-making industries. While this isn’t necessarily bad and not useful in the service sector today, which dominates the U.S. market with more than 80 percents as of 2009, research has moved to reinvent and translate many concepts into a more practical and useful way for the service industry.

One has to realize and keep in mind that the vast minority of organizations do neither fall under the pure (tangible) product category or the pure (intangible) service category. In fact, most organizations today provide a mix of products and services, in which sometimes the product and other times the service part of the business operation dominates. Purely tangible products are, for instance, salt and soap. There are usually no services that come along with these products. On the other hand, insurances and financial services are pure services and are usually not accompanied by any tangible products. In between there are many constellations possible. For instance, a restaurant’s core offer is food, a tangible product. However, restaurants provide usually a lot of services, such as reservation, wardrobe, service personnel, home deliveries, and much more. Thus the vast majority of organizations have at least some services that accompany products, and the following is important for virtually all organizations.

Looking at the dominating service sector, it is no surprise that scholars from around the globe try to come up with new concepts. While there are many suggestions to change and add to the marketing mix, many have argued that the four Ps ignore at least one crucial factor that plays a strong role in providing services: the human factor (people). Without any doubt, the human factor cannot be separated from providing services. Whenever a customer seeks a service, the employee is not only the one consulting and selling it to the customer but also the one who designs and creates it. Thus many things of the service quality depend on the skills and behaviour of the employee. One point that makes controlling the human factor difficult is the fact that it may change frequently. It is not possible to copy the very same service again, as it is created on the spot and a lot depends on the individual employee/customer interaction. Thus, proper employee training is indispensable in order to ensure the quality provision of services.

Proper employee training is indispensable in order to ensure the quality provision of services.

For this very human “error,” some scholars also demand to add another tool to the marketing mix, the process. In fact, many companies already use it effectively. The goal is to define exact processes that the employee has to adhere to, possibly including everything from the first customer contact point, its consultation processes, and what to do when problematic and critical situations arise. This is called process mapping, or blue printing, which is a “description of how your organization works” (Australian Government, 2006). As there are many different processes and not only one in most organizations, it is common to design such blue prints for different processes. According to the Australian Government publication, it will:

  • “provide a picture of what happens now,
  • highlight where things aren’t working well,
  • show everyone how things happen,
  • help to assess the flow of activity,
  • help to work out how resources (money and staff) are used,
  • help to work out how many services one can deliver, and how well the organisation can deliver them,
  • provide the baseline data for improving services and measuring how well the changes work.”

Process mapping, or blue printing, can be seen as a guiding map for management as well as a good starting point to educate the employees. Once there is a process map laid out, one can relatively easy change points that don’t quite work yet and compare the new process with the old one, thus helping to decide whether it is an effective change, or not.

Process mapping, or blue printing, can be seen as a guiding map for management as well as a good starting point to educate the employees.

There is at least one more crucial factor that is very relevant in the service sector. Can you picture some old and dirty factory? You probably can; but then, it doesn’t really matter too much as you will most likely never get to see where exactly your product comes from. That is very different in the service sector. Here the service provision, or the employee-customer interaction, is directly linked to its “place of production.” As we all know, the first impression we make of places, people, and many other things make up an important part of our perception of it. Thus, in the service industry, it is important to create a good first impression, and in a way it constitutes pre-service value to the potential customer. A simple example, would one enter the old and dirty-looking hairstylist shop or go to the shop next door, which is modern, light, clean, and thus indicates a better service (assuming all other outside indicators are the same)? Most of us would probably choose the latter option. As this is true for all service organizations, it has proven important to invest in this first impression and create appealing physical evidence. This may not directly be linked to the quality of the service but is important to gain competitive edge and differentiate one’s organization from another. Moreover, it is response to contemporary customer demands.

Service provision, or the employee-customer interaction, is directly linked to its “place of production.”

There are other suggestions for adding points to the four Ps of marketing. Payment, for instance, is one of them. However, as it is mostly included in the price factor, adding this point seems redundant and just complicating the marketing mix. As you may have noticed, all the latter three mentioned points–people, process, and physical evidence–can also be written to start with the letter P. Although there is no actual reason not to name them differently, it is convenient to remember them and the traditional four Ps of marketing as the seven Ps of service marketing. This has become the most discussed and famous alternative to the four Ps, now including crucial points for the provision of services. Thus it reflects the changed market environment and industrial mix.

One needs to keep in mind that the product and place tools stay for the seven Ps of service marketing, but they appear in a slightly alternate form. As services are intangible, they do not come in physical forms, thus don’t require packaging, warranty, functionality, and anything else that relates to tangible products. The place tool does not include inventory, for example, because one characteristic of services is that they cannot be stored for later use; they are created on demand on the spot in a timely manner. However, as already mentioned above, most companies offer a mix of tangible and intangible products, for which reason all points may become important for some organizations. The following graphic was made for pure service organizations and does not list the points mentioned in the beginning of this paragraph.

 

The Seven Ps of Service Marketing

The Service Marketing Mix: Product, Price, Place, Promotion, People, Process, Physical Appearance

 

Don’t the factors people, process, and physical appearance exist in product industries as well? Yes, they do. However, they do not play a direct role for the customer. While they only have an “invisible” background role in product-making industries, they play a vital and active role in the provision of services because they are directly linked to the customer experience. Remember the definition of marketing mix: “[…] blends to produce the response it wants in the target market” (Armstrong & Kotler, 2008). And only in service organization can these points directly create a response from customers.

To conclude the discussion about the validity of the four Ps of the marketing mix today, no one was able to prove that they are not valid anymore in today’s business mix and environment. Moreover, the four Ps have provided the fundamental concept in marketing, thus are not obsolete, and are the basis for many other concepts, including the seven Ps of service marketing. They are an integral part of creating value because they are a centre part of all organizations’ marketing strategies. For more information on how to create real value for customers, please read the article “From Customer Needs to Real-Value Market Offerings.”

 

Resources:

  • Armstrong, G., & Kotler, P. (2008). Marketing: An introduction. (9th ed., pp. 69-90). Upper Saddle River, NJ: Pearson Prentice Hall.
  • Australian Government. (2006) Section 4: Process mapping and service mapping. Retrieved October 24, 2012 from Department of Health and Ageing: http://www.health.gov.au/internet/h4l/publishing.nsf/Content/B0FE45B081C0C476CA2571950002F337/$File/section%204.1.pdf
  • Dominici, G. (2009). From Marketing Mix to E-Marketing Mix: a Literature Overview and Classification. International Journal of Business and Management.
  • Service Industry. (2009) Encyclopedia of Management. Retrieved October 24, 2012 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-3273100265.html

 

 

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The Author: Konstantin von Brocke is a German international magna cum Laude business management student at the University of Wisconsin-Stout and enthusiastic about marketing and sales, strategy and risk management, and business development and consulting.

 

Finding the right co-founder


What do I need to look for? What set of skills should my future cofounder have? And where can I find co-founders anyways? These are just a few among many relevant questions when looking for a cofounder to start your business or to enhance it early on. While there is no easy solution to it but actually having a cofounder already, there are a few steps that can help you in the process of finding one. This blog post on ‘Finding the right co-founder’ will take you through the whole journey, starting with yourself and who and what you actually need to look for in the potential candidate to online platforms and local events to find cofounders. The very first thing on the to-do-list is to look at yourself. I am not talking about the look in the mirror and spending hours in front of it thinking how pretty you are. But as you are by far the most important asset in your business, it is crucial that you have a clear understanding of yourself. Do you know what type of character you have? Do you really know? The maybe best tool to analyze yourself in this perspective is to do the Myers-Briggs Type Indicator® personality test. Among other things, this can help you to know how you function in a relationship and what personality type would complement you best. Or in the words of Isabel Briggs Myers herself, “the understanding of type can make your perceptions clearer, your judgements sounder, and your life closer to your heart’s desire” and “you only have to be good at your own kind of thing and decently appreciative of the other fellow’s excellence.”

You only have to be good at your own kind of thing and decently appreciative of the other fellow’s excellence. (Isabel Briggs Myers)

With a clear picture of yourself, the next step is to figure out what you are actually looking for, and who. This sounds fairly easy but is also about making some crucial decisions that will have lasting impacts on your business and startup. Do you have a clear picture of the skill sets you need? What are the most important assets a cofounder should bring into the business? Is there anything nice to have but not as important as other skills? In order to find out what it really is that you need, one tool you can use is the Business Model Canvas. While this may not have been at the top of your list for this purpose, it gives you a clear picture of your business. You will then be able to see what activities you are able to fulfill yourself and which activities need to be done by your cofounder. Find more details on this on Steve Blank’s blog post “How To Find the Right Co-Founders?” This provides the basic foundation of your business and will also make your life easier with many other things later. Knowing the set of skills necessary, you can go a step further and see if your co-founder should have any particular characteristics to complement yourself. Maybe you are not good at selling and you look for someone charismatic and articulate, or the latter is your strength and you look for someone technical and analytical. Whatever it is, one way to approach this is to go back to your personality type and see who would complement you best. Bare in mind that this is just an indicator–a tool to help you–and not to rule out anyone solely based on this. Knowing who you are and what you want will only set the foundation for your actual search for a partner. Frankly, it will not get easier. In fact, finding a cofounder that has the right set of skills, complementary characteristics, the right attitude, and ‘friend material’ is a very difficult process. But the big question remains: “Where do I find this cofounder?” The most natural place to look for a cofounder is among your friends and immediate network. You already know these people, you know what they have done and what they currently do, and you know with whom you’d like to work together and with whom rather not. If you have someone in mind at this moment and this person is interested, congratulations! This will then hopefully be the end of your search and the beginning of a great partnership. For many of us, the cofounder search will last longer than this. But where can I go to find a cofounder if I don’t know the person already? The easy answer would be in your extended network. While this is true and you should ask around in your network, this is similar to the previous paragraph and would only lengthen this blog post. However, there are also other places where you can find cofounders. Generally, there are particularly two types:

  • Online platforms for startups and cofounders: These are websites that are made for the needs of entrepreneurs and startups. Some of them offer a wide range of offers including startup information, finding investors, and jobs. Others are more tailored and focus, for example, on finding cofounders. Both are good places to look.
  • Local events for startups and cofounders: Especially larger cities and startup hubs like San Francisco, London and Berlin also have a wide range of offers of bringing entrepreneurs together at various networking events. Similarly to the online platforms, some of them with the sole purpose of introducing you to potential cofounders.

Following I will introduce some of the best online platforms to look for cofounders. As it is impossible to provide relevant local events for everyone, the first entry of the following online platforms also hosts numerous local events worldwide. Besides this I will not provide any other information on local events in this blog post.

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  • CoFoundersLab claims to be the largest community of entrepreneurs online and hosts multiple local events worldwide. With its acquisition of TechCoFounder in June 2012, it indeed has an enormous database of more than 40,000 entrepreneurs that are looking for cofounders or people that are interested to join a startup as a cofounder, although there appear to be only very few of the latter kind. The local events are called Matchups and ‘bring together entrepreneurs in a structured, in-person setting.’ The platform doesn’t charge anything to create a profile and get in contact with up to 5 potential cofounders per month. For those looking to contact more than that and to using more available features, there’s also the option of premium profiles for as little as $9.99 per month.
  • Founder2Be is a platform with about 35,000 people looking for cofounders or for joining a startup as a cofounder. With this it is the second largest platform of its kind right after CoFoundersLab. It is 100% free for basic users and offers a pro plan with additional features such as advanced search functions starting at 14.95€ per month.
  • AngelList has been my favorite startup platform so far, providing tons of useful information. It has a wide offer from presenting your startup, finding angel investors and venture capital, and offering and finding jobs including cofounder positions. Its database with 426,368 listed startups is huge, and among the 6,285 job offers, there are currently also 638 cofounder positions to be filled. Creating your profile on AngelList and AngelList Talent–its recruitment section–are currently 100% free so you can contact as many startups and talents as you want.
  • StartupBlink also has a very large database of 68,549 listed startups including 1,173 looking to recruit and find cofounders. As a new startup platform, one should definitely keep an eye on it. It is certainly a great place to start your search although many startups here seem to backlink their listed jobs to AngelList to provide more information there. It also appears to be 100% free at the moment.
  • FoundersNation seems to be a smaller yet still global platform to find cofounders. There’s no indication of how many users they have. The search interface reminds me of that of CoFoundersLab (or vice-versa) with results looking like its premium profiles. I have just signed up today and am satisfied so far with what I can do and find. Their website also appears to be 100% free for users.
  • FounderDating is different to the other platforms in that it requires a process to get in. According to their FAQ, you can apply but it really is invite-only. While the application is free, once you receive an invite there is a fee to actually in. There was no info on the actual price but considering that they hand-screen every application, it could be hefty. The acceptance rate is about 34%. The good thing about this network is that it should then only have high-profile candidates and very little to no scam.

This appears to be the most relevant list of online startup platforms that help to find cofounders. With many regional websites and those in other languages, the list could of course go on and on. But for an international audience, these are the largest one with the best offer. Overall, keep in mind that this can be a lengthy process, for which reason it is for your own benefit if you start looking for a cofounder as soon as you realize that you will need and want one. As you are not looking for an employee–whom you also should treat fairly–but a long-term business partner and friend that you need to trust and value, treat the candidates as such: equal. After all, what are the best set of skills and right attitude if you do not get along?


Konstantin von BrockeThe Author: Konstantin von Brocke has graduated in business management from University of Wisconsin-Stout with magna cum laude in December 2012 after receiving an Associate in Applied Science degree in marketing from Fox Valley Technical College. He is interested in all things related business with a particular focus on entrepreneurship, marketing, and growth. Connect now via Twitter or Google+!

StartupBlink

AngelList vs StartupBlink


Over the last couple of years, my interest in anything related startups has grown tremendously. While my  initial perspective on them may still have been rather superficial and romanticized, I soon began to also look at the ecosystem with its influencers, the online livelihood, and much more. This eventually led me to look for employee and cofounder positions and also work on own ideas.

It was then that I discovered and explored AngelList, which I still think to be one of the best startup platforms on the market. I am impressed by the number of startups, investors, jobs, etc this platform provides as well as by the detailed information on many of these. Can you imagine that, at the time of writing this blog post, this platform holds a total of 425,508 startups and 6,238 jobs offered by startups alone? This is depth of content that has become very helpful in exploring my own ideas as well as enriching them in many ways. For this I applaud AngelList.

AngelList

Screenshot of the website AngelList

Hardly expecting any other platform to reach up to the level of AngelList, I came across StartupBlink just a few weeks ago. StartupBlink is a new startup platform that has a somehow similar but yet distinct offer. It also attracts high numbers of startups to present themselves and connect with other players in the startup ecosystem. It does however not focus on investing. Its most distinct feature is definitely the prominent map on the front page, giving an overview of where the most startup-related activities are worldwide and letting you access information on its individual players. Furthermore, the features of influencers and ambassadors are very nice, something that does not exist in this way on AngelList. While StartupBlink does not have the same breadth with 68,374 startups, it is considerably strong for having launched just last summer.

StartupBlink

Screenshot of the website StartupBlink.com

So how else could it be, I now use both of these platforms fairly equally. I still go to AngelList to get more detailed information on startups and look for employee and cofounder positions. StartupBlink, on the other hand, has become my primary address to scoop through the ecosystem to know what’s out there. Here I particularly like the interactive map and the possibility to get a much better overview of the startup landscape worldwide. So all in all, I believe that both AngelList and StartupBlink complement each other very well and that both are of great use and benefit for anyone who is interested in startups or in some way part of its larger ecosystem.

 


Konstantin von BrockeThe Author: Konstantin von Brocke has graduated in business management from University of Wisconsin-Stout with magna cum laude in December 2012 after receiving an Associate in Applied Science degree in marketing from Fox Valley Technical College. He is interested in all things related business with a particular focus on entrepreneurship, marketing, and growth. Connect now via Twitter or Google+!