Service Marketing Mix | The 7P’s of Service Marketing

Lesson Notes

7 P’s of Marketing

A service is an activity or benefit that is offered by one party to another. Services can also be defined as the actions, processes, and performance of a brand. It is mostly intangible and does not result in the transfer of ownership.

Examples of service sectors

Information Technology, Hospitality, Legal, Healthcare, Banking, Airlines, Logistics, Education, Tourism, Insurance and Telecom.

Service Marketing Mix – 7 Ps of Marketing

Services are extremely different from products.

Therefore, while designing a service, marketing concepts such as marketing mix needs to be revised for effective publicity.

The service marketing mix is chiefly governed by the 7 P’s of marketing that are

  1. Product
  2. Price
  3. Place
  4. Promotion
  5. People
  6. Process
  7. Physical evidence

Now let’s understand each of them with suitable examples

1. Product

A service ‘product’ is a bunch of features and customer benefits.

According to Philip Kotler, a marketer requires to examine through the following five levels of a service ‘product’

Starting with the first

  1. Core product
  2. Basic product
  3. Expected product
  4. Augmented product
  5. Potential product

These five levels of the product are also called customer value hierarchy.

Example of Product [Hotel]

Core product

The core product is the very purpose behind the existence of the hotel service.

Example: Rest and Sleep.

Basic product

It refers to how a marketer translates the core benefit to a service package.

Example: Hotel room, bed, bathroom, towels, wifi.

Expected product

It refers to the set of qualities customers normally expect while buying a service.

Example: Clean bed, fresh towels, 24/7 coffee shop, swimming pool, spa, and smartphone key entry, etc.

Smartphone as the key has become an “Expected Benefit”

Smartphone as the Key can surely no longer be deemed as ‘experimental’ or ‘early stage’ technology after showing presence for almost a decade in the market. It was first launched in 2010 when IHG tested with an early version at many Holiday Inns.

Over 1,800 Marriott Hotels extended mobile keys as a part of their digital guest experience, which included mobile check-in and check-out by 2019.

Millions of tourists have experienced using their smartphone as a key to their hotel room. The brand anticipates having it available across all the 7,000 properties by the end of 2020.

Augmented benefits

At this stage, the service organizations face rigorous competition. Augmentation is the basic distinguishing factor for any service brand.


1. Underwater hotels

The Conrad Maldives Rangali Island gives the guests a very thrilling experienceof getting up close with the marine life and coral reefs at an underwater hotel which additionally even has an underwater restaurant.

2. Choose your room

Hilton’s digital check-in is a service that enables the guests to pick a specific room of choice before arrival quite similar to selecting a seat on an airplane.

It is witnessed that each augmentation adds to the cost of the product or service. The augmented benefits quickly become the expected benefits for the customer.

Potential Product

It includes finding new ways of pleasing customers.


  1. Wireless Charging

In wireless charging, set up power is transmitted from a charging “mat” to any device such as a smartphone or headphones. This occurs when the device is placed on the mat.

  1. Voice-activated controls

Smart speakers like an Amazon Alexa can be modernized to handle hotel-specific requests with a system like Volara. These systems elevate the experience of the guests by allowing the use of voice commands to request services like room service or valet.

  1. Smart mirrors

This advanced technology facility consolidates a TV screen and a guest room mirror. The guests are able to watch the news, check the weather or simple request hotel services while shaving or brushing teeth via a concierge-style function.

2. Price

Price refers to the value at which the seller offers a good or service to the buyer. It displays the value attached to the service by the service provider and must resemble the customer’s perception of value.

Various service providers offer a spectrum of services at different price levels to meet the needs of customers of varying target segments. Various services use offbeat terminology to indicate prices such as fees, interest, service charge, fare, toll, subscription fee, tariffs, commission, rents and premiums.

The table on the right is an indicative list of the different pricing terminologies. Before we move on to the next element of service marketing – please not – price is the only element in 7 Ps that gets revenue for the business –  the remaining Ps only incur a cost.

3. Place

This service element can also be recognized as ‘distribution’. The chief objective of distribution is to render services at the right time, the right place which is accessible to customers with ease and convenience.

Service providers and customers engage in service production at a location. A customer-friendly environment and equipment help in customer’s participation at the service distribution outlet.

There are three categories of transaction in services

1. Customer Calling Contacts

Customers are required to visit the service outlet to avail the services.

Example: Customers visiting McDonald’s.

2. Service Firms Calling Customers

Customers do not require to leave their premises in order to avail the services.

Example: Dominos Delivering Pizza.

3. Service Provider and Consumer Transact at Arm’s Length

Customers in this type of transaction do not have a direct encounter with the service provider.

Example: Netflix.

4. Promotion

The promotion covers all endeavours of service organizations to enhance the demand for their products in the market. Usually, these efforts include advertising, sales promotion, publicity, personal selling, events and direct marketing.

Example – Promotion of Etihad Airways

The airline sponsors football, cricket, and motor racing (Grand Prix) and many other sporting events. Etihad Airways has been Manchester City FC’s main partner. The club signed a 10-year deal with the airline for £400 mn.

As part of the deal, the airline sponsors the club stadium, jersey, and a stadium containing the club’s new state-of-the-art training ground.

ByJU’s is an Indian Edutech Giant, which has sponsored the Indian Cricket Team. The contract is till March 2022. As part of the deal, the Byju’s logo will be on the shirts of the Indian players, both men and women, in all three formats of the game.

As part of the deal, Byju’s would pay approx USD 693,000 per match for bilateral series and approx USD 227,000 per match for ICC sponsored tournaments.

5. Physical Evidence

Physical evidence can be defined as a blend of tangible signs that help customers better understand the service. It involves tangible commodities that expedite service delivery.

Physical Evidence comprises two parts: Servicescape and Tangibles. Servicescape incorporates ambient conditions, space, function, signs, symbols & artefacts. Tangibles include brochures, uniforms, letterheads, business cards, equipment, reports, internet presence.

7P’s – Physical Evidence [Airlines]

Example – Etihad Airways – The Residence

The airline offers a luxury three-room apartment in the sky.

Accommodating up to two guests it highlights an ensuite shower room, a private bedroom and separate living area, a VIP Travel Concierge and a dedicated team that takes care of everything one could possibly need. It also provides a chauffeur-driven limousine to the airport lounge.

Innovative luxury travel doesn’t come cheap. For a one way flight from Sydney to Dubai, this innovative luxury ‘The Residence’ charges around $23,000 one way. Etihad seeks service very sincerely for its first-class passengers, and its butlers are trained at the world-famous Savoy hotel.

6. Process

process refers to the procedures, mechanisms and course of activities that act as a channel for service delivery. It also includes tasks, schedules, and routines by which a product or service is delivered to the customer.

firms use “service blueprinting” to organize the service rendezvous and to allow more precise visualization of the service process.

Example: Blueprint of a coffee shop.

7. People

This element in the services refers to the firm’s employees who are also acknowledged as internal customers. Employees bodily represent the service and can be an asset as well as a liability to the firm.

From the customer’s perspective, service employees are the face of the service organization – or I may say employees of the service firms are like walking billboards.

Examples: Doctors in the healthcare industry, cabin crew in the airline business and professors in the education realm.

7P’s – People [Types of Service Personnel]

High-contact personnel

They are needed when the physical presence and communication of the customer with the employees is for a longer time frame.

Example: hospitals and restaurants, etc.

Low-contact personnel

They are required when the physical presence and interaction with the customer is for a lesser time frame compared to high-contact personnel.

Example: telecom customer care centres, post office, etc.

Skilled and professional

These include industry specialists who possess intrinsic knowledge about the industry they belong to.

Example: Doctors, lawyers, etc.


Individuals that carry out necessary but basic activities that don’t need specialized professionals to carry it out.

Example: Courier delivery, waiters, etc.

Support personnel or non-contact employees

Employees that contribute to the delivery of service without coming in contact with the customers.

Example – Pilot, Chef

7P’s – People [Award for Best Cabin Crew]

SKYTRAX – World Airline Awards.

In 2019, Singapore Airlines was voted as the World’s Best Cabin Crew by air travelers, followed by Garuda Indonesia taking second place and All Nippon Airways acquiring third.

The Best Airline Cabin Crew awards acknowledge the best all-around performance of cabin staff, for hard service (e.g. techniques, efficiency, attention etc), and soft service characteristics (e.g. staff enthusiasm, attitude, friendliness and hospitality).