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Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
Extended Marketing Mix
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Extended Marketing Mix

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This presentation briefly analyses the extended marketing mix elements (people, process, physical layout and planet). It begins with a critique of the 4Ps, explaining why the marketing mix elements, …

This presentation briefly analyses the extended marketing mix elements (people, process, physical layout and planet). It begins with a critique of the 4Ps, explaining why the marketing mix elements, over the years, have been extended from 4Ps to 7Ps to 8Ps. The analysis is supported with case studies including Starbucks, McDonald's and Tesco.

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  • 1. EXTENDED MARKETING MIX The
  • 2. © 2014 Berlin Asong. All rights reserved. 2 Learning Objective I. Analyse the additional elements of the extended marketing mix.
  • 3. © 2014 Berlin Asong. All rights reserved. 3 Marketing Mix Product Price Place Promotion Process People Physical layout Planet This presentation focuses on the extended elements of the marketing mix.
  • 4. © 2014 Berlin Asong. All rights reserved. 4 Process People Physical layout The Extended Marketing Mix refers to three elements that were later added to the classical marketing mix, the 4Ps.
  • 5. © 2014 Berlin Asong. All rights reserved. 5 To understand how and why “process”, “people” and “physical layout” made their way into the marketing mix family, we need to understand the history of the marketing mix.
  • 6. © 2014 Berlin Asong. All rights reserved. 6 The elements of the marketing mix were originally… 12, …developed by Harvard Business School Professor Neil H. Borden long before they were published in 1964. Borden, N. H. (1984), “The Concept of the Marketing Mix”. Journal of Advertising Research, vol. 2, p. 9
  • 7. © 2014 Berlin Asong. All rights reserved. 7 Marketing Mix: The Originals 1. Product planning. 2. Pricing. 3. Branding. 4. Channels of distribution. 5. Personal selling. 6. Advertising. 7. Promotions. 8. Packaging. 9. Display. 10. Servicing. 11. Physical handling. 12. Fact finding and analysis. Mohammed Rafiq and Pervaiz K. Ahmed, (1995) "Using the 7Ps as a Generic Marketing Mix: An Exploratory Survey of UK and European Marketing Academics", Journal of Marketing Intelligence & Planning, Vol. 13 Iss: 9, pp.4 - 5
  • 8. © 2014 Berlin Asong. All rights reserved. 8 The 12 elements were then condensed to 4 elements, and given the name… 4Ps, …by E. Jerome McCarthy in 1964. Goi, C. L. (2009), “A Review of the Marketing Mix: 4Ps or More”. International Journal of Marketing Studies, vol. 1, no. 1, p. 2 Place PromotionProduct Price
  • 9. © 2014 Berlin Asong. All rights reserved. 9 10minutes However, something was not right with the 4Ps. Can you see the problem? What’s the problem?
  • 10. © 2014 Berlin Asong. All rights reserved. 10 It appears the 4Ps framework was meant for product marketing. It largely ignores the marketing of services. For example…
  • 11. © 2014 Berlin Asong. All rights reserved. 11 If you own a hair salon, is the 4Ps useful in designing and marketing your business? The person doing your hair is not a product. He/she is rendering a service. You consume the service at the service- making venue. You don’t consume the hairdresser. Picturesource:hapfashion.com
  • 12. © 2014 Berlin Asong. All rights reserved. 12 You own a travel agency with a focus on Seychelles as a holiday destination. Is the 4Ps helpful in marketing the Seychelles? Picturesource:sunnsandvacation.com
  • 13. © 2014 Berlin Asong. All rights reserved. 13 Does the 4Ps framework advise on how to market an individual (e.g. expert, presidential candidate, footballer, music artist, etc.)? Strictly speaking, a person is not a product but a service provider. Picturesource:foxsportsasia.com
  • 14. © 2014 Berlin Asong. All rights reserved. 14 Unlike products that can be touched & even eaten to appreciate their quality…
  • 15. © 2014 Berlin Asong. All rights reserved. 15 …a service like banking is largely intangible. Does the 4Ps advise on how the quality of a service be assessed? PictureSource:clippings.com
  • 16. In other words, does the 4Ps help marketers design services in ways that customers can assess their quality? © 2014 Berlin Asong. All rights reserved. 16
  • 17. © 2014 Berlin Asong. All rights reserved. 17 There’s a time lag between the manufacturing and consumption of a product like chewing gum.
  • 18. © 2014 Berlin Asong. All rights reserved. 18 …services like teaching, nursing, etc. are produced and consumed simultaneously.
  • 19. © 2014 Berlin Asong. All rights reserved. 19 In fact, the customer owns some resources (e.g. information, customer presence & behaviour) needed to produce the service.
  • 20. © 2014 Berlin Asong. All rights reserved. 20 Does the 4Ps provide a guide on how the relationship and transactions between the customer and firm in service production be managed?
  • 21. © 2014 Berlin Asong. All rights reserved. 21 Unlike products (e.g. wine) that can be stocked to meet demand, services cannot be stocked. Does the 4Ps provide a guide on how to manage the supply of services in line with market demand?
  • 22. © 2014 Berlin Asong. All rights reserved. Ask 10 customers to buy Miss Dior perfume from this shop. The chances are they would be given the same product. 22Picture source: © 2012 Tofu photography
  • 23. © 2014 Berlin Asong. All rights reserved. 23 Ask the same 10 individuals to open a bank account from Barclays bank. They would likely have different experiences of the service received from the bank. Picturesource:v3.co.uk
  • 24. © 2014 Berlin Asong. All rights reserved. 24 Does the 4Ps advise on how service provision can be standardised? Does it even matter to standardise service provision?
  • 25. © 2014 Berlin Asong. All rights reserved. 25 Criticisms of the 4Ps contributed to the addition of 3 marketing mix elements by Booms and Bitner in 1981. Booms, B.H. and Bitner, M.J. (1981 ), "Marketing Strategies and Organization Structures for Service Firms", in Donnelly, J.H., George, W.R. (Eds),Marketing of Services, American Marketing Association, Chicago, IL, pp.47-51 . People Physical layout Process
  • 26. © 2014 Berlin Asong. All rights reserved. 26 Learning Objective I. Analyse the additional elements of the extended marketing mix.
  • 27. © 2014 Berlin Asong. All rights reserved. 27 Now that we have understood how and why the marketing mix was extended from the 4Ps to 7Ps, it is important we appreciate the usefulness of “process”, “people” and “physical layout” in the design and delivery of quality services for customers. We’ll be using Starbucks, a coffeehouse retailer, as our case study to analyse the extended marketing mix elements.
  • 28. © 2014 Berlin Asong. All rights reserved. 28 PictureSource:wikihow.com
  • 29. © 2014 Berlin Asong. All rights reserved. 29 A series of actions performed to make something or achieve a result. Process
  • 30. © 2014 Berlin Asong. All rights reserved. 30 10minutes Consider a service like coffee-making. You’ve received a guest who has asked you for a coffee drink. What are the steps involved in coffee-making?
  • 31. © 2014 Berlin Asong. All rights reserved. Steps in Making a Coffee Drink 31
  • 32. © 2014 Berlin Asong. All rights reserved. 32 10minutes What actions would you take to improve the coffee-making process for the situation above? Your guest did not enjoy the coffee. The guest complaint it took too long to receive the coffee drink. The guest also complaint the coffee drink wasn’t hot enough, and was too strong.
  • 33. © 2014 Berlin Asong. All rights reserved. 33 You now begin to understand process-issues that can affect the quality of a service received by the customer.
  • 34. © 2014 Berlin Asong. All rights reserved. 34 More than a 100 processes are behind a coffee drink served to the customer. PictureSource:southerncurlsandpearls.com
  • 35. © 2014 Berlin Asong. All rights reserved. 35 Customers visit Starbucks among other reasons for quality coffee, customised coffee and speedy service.
  • 36. © 2014 Berlin Asong. All rights reserved. 36 Let’s focus on two critical processes—order taking and drink making—that affect the customer experience of Starbucks. PictureSource:smakeats.com
  • 37. © 2014 Berlin Asong. All rights reserved. 37 Order taking and drink-making are complex processes given that Starbucks offers 87,000 different drink combinations. Source: The Wall Street Journal (2006) PictureSource:atantrum.wordpress.com
  • 38. © 2014 Berlin Asong. All rights reserved. 38 How does Starbucks design its order-taking and drink-making processes to provide customers quality coffee, customised coffee and speedy service? 10minutes
  • 39. © 2014 Berlin Asong. All rights reserved. 39 Itallhas todo with(amongother things): Order-taking and coffee-making policy, Staff training, and Technology.
  • 40. © 2014 Berlin Asong. All rights reserved. 40 Order-taking policy PictureSource:smakeats.com
  • 41. © 2014 Berlin Asong. All rights reserved. 41 Source: eoinkcostello.wordpress.com
  • 42. © 2014 Berlin Asong. All rights reserved. 42 PictureSource:atantrum.wordpress.com Drink-making policy
  • 43. © 2014 Berlin Asong. All rights reserved. 43 Use of technology to simply and speed up drink-making process. PictureSource:cafe-future.net
  • 44. © 2014 Berlin Asong. All rights reserved. 44 PictureSource:thenextweb.com Starbucks has introduced mobile payment to reduce customer wait time.
  • 45. © 2014 Berlin Asong. All rights reserved. 45 Hence, the design of a service-process affects the quality of the service received or consumed by the customer.
  • 46. © 2014 Berlin Asong. All rights reserved. 46 The abilities, motivation and behaviour of staff affect the quality of service offered to customers. People
  • 47. © 2014 Berlin Asong. All rights reserved. 47 Employee Competence Customer Satisfaction/RetentionEmployee Satisfaction Customer EngagementEmployee Commitment Service Innovations Service Quality The quality of a firm’s human resources and how well they are managed affect service quality and customer satisfaction and repeat purchase.
  • 48. © 2014 Berlin Asong. All rights reserved. 48 Customers expects quality coffee, customised coffee, speedy and friendly service from Starbucks. How does the company manage the people element to meet customer expectations? 10minutes
  • 49. © 2014 Berlin Asong. All rights reserved. 49 PictureSource:wordsandpics.co.uk
  • 50. © 2014 Berlin Asong. All rights reserved. 50 PictureSource:wordsandpics.co.uk
  • 51. © 2014 Berlin Asong. All rights reserved. 51 Click slide to watch video. Internet connection is required.
  • 52. © 2014 Berlin Asong. All rights reserved. 52 Happy customerMotivated staff Service experience: welcoming, warmth, personal, speedy, reliable, customisable and safe . Picture Source: wordsandpics.co.uk
  • 53. © 2014 Berlin Asong. All rights reserved. 53 Physical layout is the environment in which the service is delivered, and any tangible cues that communicate the service or can be used by customers to assess the quality of service provided. Physical layout Also called physical evidence Mohammed Rafiq, Pervaiz K. Ahmed, (1995) "Using the 7Ps as a Generic Marketing Mix: An Exploratory Survey of UK and European Marketing Academics", Journal of Marketing Intelligence & Planning, Vol. 13 Iss: 9, p. 7
  • 54. © 2014 Berlin Asong. All rights reserved. Components of Physical Layout Building. Layout. Ambience. Furnishings. Décor. Colours. Pictures. Staff outfits. Etc. 54
  • 55. © 2014 Berlin Asong. All rights reserved. 55 Starbucks store layout, furnishings and décor. PictureSource:inc.com
  • 56. © 2014 Berlin Asong. All rights reserved. 56 PictureSource:londoncalling.co Comfy seats Ambience
  • 57. © 2014 Berlin Asong. All rights reserved. 57 PictureSource:blog.svconline.com Artefacts—logo, objects, colours, etc. are used to convey a premium coffeehouse setting.
  • 58. © 2014 Berlin Asong. All rights reserved. 58 Clean facilities PictureSource:thebiggreen.net
  • 59. © 2014 Berlin Asong. All rights reserved. 59 PictureSource:laughingplace.com Point-of-sale displays
  • 60. © 2014 Berlin Asong. All rights reserved. 60 PictureSource:atantrum.wordpress.com Coffee machines, payment terminals and other facilities are working properly.
  • 61. © 2014 Berlin Asong. All rights reserved. 61 Staff pleasantry and outfit Picture Source: www. wordsandpics.co.uk
  • 62. © 2014 Berlin Asong. All rights reserved. 62 Picture Source: crainsnewyork.com Free wireless broadband
  • 63. © 2014 Berlin Asong. All rights reserved. 63 User friendly website
  • 64. © 2014 Berlin Asong. All rights reserved. 64 …contribute to deliver a superior coffee experience. People Physical layout Process Picture Source: www. wordsandpics.co.uk
  • 65. © 2014 Berlin Asong. All rights reserved. 65 PictureSource:wikihow.com
  • 66. © 2014 Berlin Asong. All rights reserved. 66 Like the 4Ps, the 7Ps framework has been criticised for failing to address social, ethical and environmental concerns in the marketing products and services.
  • 67. © 2014 Berlin Asong. All rights reserved. 67 Hence, the addition of the 'planet' element to the marketing mix family. Planet
  • 68. © 2014 Berlin Asong. All rights reserved. 68 Marketing Mix Product Price Place Promotion People Physical Layout Process Planet Socially Responsible Marketing The 7Ps should be managed in ways that provide shared value for the firm and larger society.
  • 69. © 2014 Berlin Asong. All rights reserved. 69 Click slide to watch video. Internet connection is required. Starbucks Offers Workers Free College Tuition
  • 70. © 2014 Berlin Asong. All rights reserved. 70
  • 71. © 2014 Berlin Asong. All rights reserved. 71 PictureSource:wikihow.com

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