Strategic Management: Formulation and Implementation

New Marketing Mix

The original model of the four Ps of the traditional mix (product, price, place, and promotion) was expanded by three additional Ps: physical evidence, process, and participants. These seven Ps recognize that at the points of service creation and delivery marketing and operations functions occur simultaneously.

Physical evidence is vital to service package strategy. Customers cannot only buy the physical product but they also experience the service package, too. Therefore, the service package strategy of a firm requires sometimes the firm to make major changes in how it runs the business. For example, physical evidence now required that all machinery used to apply the fertilizer and grass seed be clean, modern, look professional, and not break down.

Process design includes fashion design and store order cycle, the factory and distributor supply cycle, franchising policies and procedures, merchandise payment policies and procedures, and a salesperson training procedures, and so on. Today many of these processes have been computerized and the stores and factories electronically linked.

Participant - whether it be the service provider or customers in the store, is the final link in this value-added chain of retailing. Salespeople are trained on the job, usually in established stores. They must be well- groomed, fit the market niche personality for the store, be friendly and polite, and known the procedures of the store.

The three additional Ps broaden management's perspective toward what they are (and should be) selling and how they want to deliver goods and services.

The seven Ps of service management is a way to conceptualize the business, define business strategy, format competitive analyses and benchmarking, and answer the strategic question: How can we differentiate our products and services to gain competitive advantage? Therefore, each P can be viewed as an opportunity to gain this competitive advantage.