Physical Evidence

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Physical evidence as part of the marketing mix

Services as we know are largely intangible when marketing. However customers tend to rely on physical cues to help them evaluate the product before they buy it. Therefore marketers develop what we call physical evidence to replace these physical cues in a service. The role of the marketer is to design and implement such tangible evidence. Physical evidence is the material part of a service. There are many examples of physical evidence, including some of the following:

The building itself (such as prestigious offices or scenic headquarters). This includes the design of the building itself, signage around the building, and parking at the building, how the building is landscaped and the environment that surrounds the building. This is part of what is known as the servicescape. The interior of any service environment is important. This includes the interior design of the facility, how well it is equipped, internal signage, how well the internal environment is laid out, and aspects such as temperature and air conditioning. This is also part of the servicescape. Packaging. Internet/web pages. Paperwork (such as invoices, tickets and dispatch notes). Brochures. Furnishings. Signage (such as those on aircraft and vehicles). Uniforms and employee dress. Business cards. Mailboxes. Many others . . .

A sporting event is packed full of physical evidence. Your tickets have your team's logos printed on them, and players are wearing uniforms (i.e. the team colors/colours and clothing). The stadium itself could be impressive and have an electrifying atmosphere. You travelled there and parked quickly nearby, and your seats are comfortable and close to restrooms and store. All you need now is for your team to win! Some organizations depend heavily upon physical evidence as a means of marketing communications, for example tourism attractions and resorts (e.g. Disney World), parcel and mail services (e.g. UPS Courier Services), and large banks and insurance companies (e.g. Lloyds of London). This is important to their corporate image. Of course there are other examples with a slightly more tangible offering such as Rolls-Royce motor cars and P&O cruises.

People, Process, and Physical Evidence (Packaging)

Here is a detailed overview of the People, Process and Physical Evidence (Packaging) of the marketing mix. By adding these three aspects to the marketing mix, you get what is known as the 7 Ps of Marketing. People. An extremely important part of any company is having the right people to support the companys products and/or service. Excellent customer service personnel who can provide support with clearly known expectations, such as hours of operation and average response time, is key to maintaining a high level of customer satisfaction. Customer service skills were discussed in lesson 9. Lessons 1 through 4 cover everything from how to lead the people, to hiring, retaining, training, and building teamwork. Knowledgeable staff adds much value to the product offering. Process. Solid procedures and policies that are in place, which pertains to the companys products and/or service, is an extremely valuable element to the marketing strategy. Customers want to understand more than just your product; they also want to focus on the shape and form your business will take. Physical Evidence/Packaging. This refers to the way your product, service, and everything about your company, appears from the outside. Decisions need to be made about the size, shape, color, material, UPC bar code, and label of the packaging. This should be customer tested and updated when needed. It should fall in line with your other product offerings as well. Packaging involves the visual layout, practical setup, and when needed for products, clear and precise installation instructions. Product liability insurance is needed in case anyone suffers any harm from your product. Engineering tests are also needed to make sure the package can stand up to abuses. There may also be regulatory issues to consider. Visual packaging of a tangible product can make or break a purchase. Small improvements in the packaging or external appearance of your product or service can lead to completely different reactions from your customers. It is also important in selling and marketing services and intangible products that you cant see, but that you can provide the support needed to the customer who can see and feel the physical evidence.

Physical Evidence can also refer to the people within your company and how they dress and act. It can refer to how your office is set up, the professionalism of your staff, nice brochures, how you interact with your customer base, and every single visual element about your company.

ntroduction

In the previous article we discussed the characteristics of a service. In this article we look at how the marketing mix for marketing a service is different to the marketing mix for products. Just like the marketing mix of a product the service marketing mix comprises of Product, Price, Place and Promotion. How ever as a service is not tangible the marketing mix for a service has three additional elements: People, Process and Physical Evidence.

People

People are an essential ingredient in service provision; recruiting and training the right staff is required to create a competitive advantage. Customers make judgments about service provision and delivery based on the people representing your organisation. This is because people are one of the few elements of the service that customers can see and interact with. The praise received by the volunteers (games makers) for the London 2012 Olympics and Paralympics demonstrates the powerful effect people can create during service delivery.

Staff require appropriate interpersonal skills, aptititude, and service knowledge in order to deliver a quality service. In the UK many organisations apply for the "Investors in People" Accreditation to demonstrate that they train their staff to prescribed standards and best practices. Process This element of the marketing mix looks at the systems used to deliver the service. Imagine you walk into Burger King and order a Whopper Meal and you get it delivered within 2 minutes. What was the process that allowed you to obtain an efficient service delivery? Banks that send out Credit Cards automatically when their customers old one has expired again require an efficient process to identify expiry dates and renewal. An efficient service that replaces old credit cards will foster consumer loyalty and confidence in the company. All services need to be underpinned by clearly defined and efficient processes. This will avoid confusion and promote a consistent service. In other words processes mean that everybody knows what to do and how to do it.
Physical Evidence (Physical Environment)

Physical evidence is about where the service is being delivered from. It is particularly relevant to retailers operating out of shops. This element of the marketing mix will distinguish a company from its competitors. Physical evidence can be used to charge a premium price for a service and establish a positive experience. For example all hotels provide a bed to sleep on but one of the things affecting the price charged, is the condition of the room (physical evidence) holding the bed. Customers will make judgments about the organisation based on the physical evidence. For example if you walk into a restaurant you expect a clean and friendly environment, if the restaurant is smelly or dirty, customers are likely to walk out. This is before they have even received the service.
Summary

The Service Marketing Mix involves Product, Price, Place, Promotion, People, Process and Physical Evidence. Firms marketing a service need to get each of these elements correct. The marketing mix for a service has additional elements because the characteristics of a service are different to the characteristics of a product. The Characteristics of a service are: (1) Lack of ownership (2) Intangibility (3) Inseparability (4) Perishability (5) Heterogeneity. To certain extent managing services are more complicated then managing products, products can be standardised, to standardise a service is more difficult as there it can be affected by factors outside the service providers control.

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. 1. 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. 2. 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.

3. 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. 4. 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. 5. 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. 6. 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. 7. 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.

7 P's of Service Marketing

Is Marketing limited only to 4 p's(Product, Price, Place and Promotion) as been commonly known.....No, the other 3 P's (People, Process and Physical Evidence) are eminent for managing the services and the growing concept "Goods = Services" - the largest contributor in any economy......

Tuesday, April 25, 2006

Proud to be an INDIAN Proud to be an INDiAN....yes this is the line in the mind of every Indian these days.... Gone are the days when we were looking for support from developed nations......Now is the time to take initiatives and make things operational from ourselves. It has been happening in every sector,....be it in IT, Banking, Healthcare or any other.....so is for the sector booming like never before......'Aviation'....

The word Indian is of so much significance that it is making strateg changes.....This is true for the recent change in name took place from INDIAN AIRLINES to INDIAN.

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"An Indian today is considered as making a difference, and his say is of significant value. That positive image of an Indian is being utilised well with the dropping of the suffix, Airlines," says Harish Bijoor, brand consultant and CEO, Harish Bijoor Consults Inc. Competition in the Indian airspace is increasing exponentially. Civil aviation ministry estimates place the growth in domestic passenger movement at over 50 per cent in the past three years: from 26.36 million in 2001-02, to 40.09 million in 2004-05. The state owned airline operator is facing some serious pressure and competition from the newly started budget private airlines like GoAir and Kingfisher. Air Deccan is another hot player in the market, which has with their innovative schemes impressed the frequent fliers. "With a young staff, ad campaigns and offers galore, the newly-launched airlines are a force to reckon with," says an industry analyst. However, the change is more to do with the Emotions attached rather than anything else..... We can say that it is a good move but with the alliance of Jet and Sahara airways and the moves from Deccan airlines and Kingfisher airlines, it may not prove enough alone............... You just can't beat the heat..............

Pizza Hut is Indias no. 1 pizza brand with 125 restaurants in 31 cities

has a growth rate of over 45 per

cent and over 70,000 footfalls per day across the country, Pizza Hut is geared to create an ideal eating out experience for its patrons in 2006.

This year, Pizza Hut is rounding up 10 years of operation in India. And obviously, it is a reason enough to celebrate. The result is a new offering called Treat Bundles which comes with a rather catchy slogan, Treat You Just Cant Beat. where Javed Jaffery goes Egzzactly again with his Salaam Namaste maniac. The offer is not only in the nature of a lip-smacking treat that one would indulge in, but comes at unbelievable price point of Rs 75 per head.
The fast food retail chain plans to shift its focus from pizzas to full meals and treat bundles. In the process, the group is set to change its punchline from Good Time, Great Pizzas to Treat You Just Cant Beat. The groups business has planned to change its focus from pizza.

The management feels that it is mandatory to change its positioning for reaching out to a wider customer profile. In fact, Pizza Hut is also eyeing an expansion in its targeted customer profile. The socio-economic group B is clearly the target audience of the companys repositioning strategy. Said Sandeep Kohli, MD Yum Restaurants, " In India, eating out is not just about good food, but also about having a great time, fun and sharing happy moments. This is the focus of the Pizza Hut repositioning a destination for celebration and treats. Our entire brand focus is dedicated to providing our customer with good food, maniacal service and a great
"Physical Evidence" the lifeline for service companies....

Physical Evidence one of the 7 p's of Service Marketing plays a crucial role in Service sector
companies. Take an example of a restaurant where you have gone for a date with your girlfriend/boyfriend. You are very much satisfied with price, people, process etc.........but you don't get

seats comfortable enough to sit for long. They also have sprayed strong room freshner which is making you to fight to breath....Utensils are not cleaned etc..etc............Result..your date gets spoiled. Take another example.......You have gone for a business meeting in summer and the company has arranging for you to stay in a Five star hotel.....You stayed there for a night and to your surprise the AC was not working ...and so you have managed with the fan only for the whole night...Result...you may not want to stay in that hotel on your next visit..... It therefore becomes necessary to make all efforts to be

The campaign is successful enough to maintain its brand as one of the best Hotels in India. The move is infact necessary to keep attracting the tourist as India is becoming one of the most favoured coutry to visit. The ad really gives the feel of the comfort and what a Service sector should cater to. An awesome Ad, feel like spending one night at Maurya. s the one of the first hotel chain to recognise the specific needs of the discerning business traveler, leading to the development and nurturing of ITC One, Sheraton Towers and Executive Club brands.
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The case study on banks that we did in our Marketing class was indicating only a part about the SBI's strategy to move into the upper class segment. However I just came across an article in Hindu Business Line "MORE GLAMOURS TOO", was talking a new story about SBI. The "pickpocket" campaign for its debit card was just another innovation on the part of SBI. The ad besides being a strategic move from SBI has a social meaning also. The character in the ad BHOLU....an Ex-Pickpocket...can no longer continue with his profession because people no longer carry cash with them... The ad is shot with a simple idea about creating a cashless world. At the same time addressing a social menace such as pickpocketing and how it is being taken away from the streets". The campaign is conceptualized by Mudra. The commercial could trick one into thinking that it is a documentary done by an NGO on how a pickpocket transforms into a hard working labourer. It is only later that the brand message steps in and the viewer gets to know that the message is all about how much safer it is to carry a debit card in your wallet than large sums of cash.

Ravi Kaul, general manager, ATM, SBI, explains, The strategy is to induce people to conduct their transactions in a cashless world. We have done this by highlighting the main reason for owning a debit card security. Therefore, the idea of showing a pickpocket going jobless fits like a glove. SBI has successfully helped a large number of its customers migrate from cheque transactions to ATMs. The aim is to now make debit cards the next popular item in the value chain. The SBI Debit Card was launched in 2002 and, currently, the bank has around 1.4 crore cardholders, but it feels there is still tremendous scope to expand this segment.

The 7 Ps of Marketing
business activities. These seven are: product, price, promotion, place, packaging, positioning and people. As products, markets, customers and needs change rapidly, you must continually revisit these seven Ps to make sure you're on track and achieving the maximum results possible for you in today's marketplace.
Product

To begin with, develop the habit of looking at your product as though you were an outside marketing consultant brought in to help your company decide whether or not it's in the right business at this time. Ask critical questions such as, "Is your current product or service, or mix of products and services, appropriate and suitable for the market and the customers of today?" Whenever you're having difficulty selling as much of your products or services as you'd like, you need to develop the habit of assessing your business honestly and asking, "Are these the right products or services for our customers today?" Is there any product or service you're offering today that, knowing what you now know, you would not bring out again today? Compared to your competitors, is your product or service superior in some significant way to anything else available? If so, what is it? If not, could you develop an area of superiority? Should you be offering this product or service at all in the current marketplace?
Prices

The second P in the formula is price. Develop the habit of continually examining and reexamining the prices of the products and services you

sell to make sure they're still appropriate to the realities of the current market. Sometimes you need to lower your prices. At other times, it may be appropriate to raise your prices. Many companies have found that the profitability of certain products or services doesn't justify the amount of effort and resources that go into producing them. By raising their prices, they may lose a percentage of their customers, but the remaining percentage generates a profit on every sale. Could this be appropriate for you? Sometimes you need to change your terms and conditions of sale. Sometimes, by spreading your price over a series of months or years, you can sell far more than you are today, and the interest you can charge will more than make up for the delay in cash receipts. Sometimes you can combine products and services together with special offers and special promotions. Sometimes you can include free additional items that cost you very little to produce but make your prices appear far more attractive to your customers. In business, as in nature, whenever you experience resistance or frustration in any part of your sales or marketing activities, be open to revisiting that area. Be open to the possibility that your current pricing structure is not ideal for the current market. Be open to the need to revise your prices, if necessary, to remain competitive, to survive and thrive in a fast-changing marketplace.
Promotion

The third habit in marketing and sales is to think in terms of promotion all the time. Promotion includes all the ways you tell your customers about your products or services and how you then market and sell to them. Small changes in the way you promote and sell your products can lead to dramatic changes in your results. Even small changes in your advertising can lead immediately to higher sales. Experienced copywriters can often increase the response rate from advertising by 500 percent by simply changing the headline on an advertisement. Large and small companies in every industry continually experiment with different ways of advertising, promoting, and selling their products and services. And here is the rule: Whatever method of marketing and sales you're using today will, sooner or later, stop working. Sometimes it will stop working for reasons you know, and sometimes it will be for reasons you don't know. In either case, your methods of marketing and sales will eventually stop working, and you'll have to develop new sales, marketing and advertising

approaches, offerings, and strategies.

Place

The fourth P in the marketing mix is the place where your product or service is actually sold. Develop the habit of reviewing and reflecting upon the exact location where the customer meets the salesperson. Sometimes a change in place can lead to a rapid increase in sales. You can sell your product in many different places. Some companies use direct selling, sending their salespeople out to personally meet and talk with the prospect. Some sell by telemarketing. Some sell through catalogs or mail order. Some sell at trade shows or in retail establishments. Some sell in joint ventures with other similar products or services. Some companies use manufacturers' representatives or distributors. Many companies use a combination of one or more of these methods. In each case, the entrepreneur must make the right choice about the very best location or place for the customer to receive essential buying information on the product or service needed to make a buying decision. What is yours? In what way should you change it? Where else could you offer your products or services?
Packaging

The fifth element in the marketing mix is the packaging. Develop the habit of standing back and looking at every visual element in the packaging of your product or service through the eyes of a critical prospect. Remember, people form their first impression about you within the first 30 seconds of seeing you or some element of your company. Small improvements in the packaging or external appearance of your product or service can often lead to completely different reactions from your customers. With regard to the packaging of your company, your product or service, you should think in terms of everything that the customer sees from the first moment of contact with your company all the way through the purchasing process. Packaging refers to the way your product or service appears from the outside. Packaging also refers to your people and how they dress and groom. It refers to your offices, your waiting rooms, your brochures, your correspondence and every single visual element about your company. Everything counts. Everything helps or hurts. Everything

affects your customer's confidence about dealing with you. When IBM started under the guidance of Thomas J. Watson, Sr., he very early concluded that fully 99 percent of the visual contact a customer would have with his company, at least initially, would be represented by IBM salespeople. Because IBM was selling relatively sophisticated high-tech equipment, Watson knew customers would have to have a high level of confidence in the credibility of the salesperson. He therefore instituted a dress and grooming code that became an inflexible set of rules and regulations within IBM. As a result, every salesperson was required to look like a professional in every respect. Every element of their clothing-including dark suits, dark ties, white shirts, conservative hairstyles, shined shoes, clean fingernails-and every other feature gave off the message of professionalism and competence. One of the highest compliments a person could receive was, "You look like someone from IBM."
Positioning

The next P is positioning. You should develop the habit of thinking continually about how you are positioned in the hearts and minds of your customers. How do people think and talk about you when you're not present? How do people think and talk about your company? What positioning do you have in your market, in terms of the specific words people use when they describe you and your offerings to others? In the famous book by Al Reis and Jack Trout, Positioning, the authors point out that how you are seen and thought about by your customers is the critical determinant of your success in a competitive marketplace. Attribution theory says that most customers think of you in terms of a single attribute, either positive or negative. Sometimes it's "service." Sometimes it's "excellence." Sometimes it's "quality engineering," as with Mercedes Benz. Sometimes it's "the ultimate driving machine," as with BMW. In every case, how deeply entrenched that attribute is in the minds of your customers and prospective customers determines how readily they'll buy your product or service and how much they'll pay. Develop the habit of thinking about how you could improve your positioning. Begin by determining the position you'd like to have. If you could create the ideal impression in the hearts and minds of your customers, what would it be? What would you have to do in every customer interaction to get your customers to think and talk about in that specific way? What changes do you need to make in the way interact with customers today in order to be seen as the very best

choice for your customers of tomorrow?

People

The final P of the marketing mix is people. Develop the habit of thinking in terms of the people inside and outside of your business who are responsible for every element of your sales and marketing strategy and activities. It's amazing how many entrepreneurs and businesspeople will work extremely hard to think through every element of the marketing strategy and the marketing mix, and then pay little attention to the fact that every single decision and policy has to be carried out by a specific person, in a specific way. Your ability to select, recruit, hire and retain the proper people, with the skills and abilities to do the job you need to have done, is more important than everything else put together. In his best-selling book, Good to Great, Jim Collins discovered the most important factor applied by the best companies was that they first of all "got the right people on the bus, and the wrong people off the bus." Once these companies had hired the right people, the second step was to "get the right people in the right seats on the bus." To be successful in business, you must develop the habit of thinking in terms of exactly who is going to carry out each task and responsibility. In many cases, it's not possible to move forward until you can attract and put the right person into the right position. Many of the best business plans ever developed sit on shelves today because the [people who created them] could not find the key people who could execute those plans. Excerpted from Million Dollar Habits

The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. The service marketing mix consists of 7 Ps as compared to the 4 Ps of a product marketing mix. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more Ps which are required for optimum service delivery.

The product marketing mix consists of the 4 Ps which are Product, Pricing, Promotions and Placement. These are discussed in my article on product marketing mix the 4 Ps. The extended service marketing mix places 3 further Ps which include People, Process and Physical evidence. All of these factors are necessary for optimum service delivery. Let us discuss the same in further detail. Product The product in service marketing mix is intangible in nature. Like physical products such as a soap or a detergent, service products cannot be measured. Tourism industry or the education industry can be an excellent example. At the same time service products are heterogenous, perishable and cannot be owned. The service product thus has to be designed with care. Generally service blue printing is done to define the service product. For example a restaurant blue print will be prepared before establishing a restaurant business. This service blue print defines exactly how the product (in this case the restaurant) is going to be. Place - Place in case of services determine where is the service product going to be located. The best place to open up a petrol pump is on the highway or in the city. A place where there is minimum traffic is a wrong location to start a petrol pump. Similarly a software company will be better placed in a business hub with a lot of companies nearby rather than being placed in a town or rural area. Promotion Promotions have become a critical factor in the service marketing mix. Services are easy to be duplicated and hence it is generally the brand which sets a service apart from its counterpart. You will find a lot of banks and telecom companies promoting themselves rigorously. Why is that? It is because competition in this service sector is generally high and promotions is necessary to survive. Thus banks, IT companies, and dotcoms place themselves above the rest by advertising or promotions.

Pricing Pricing in case of services is rather more difficult than in case of products. If you were a restaurant owner, you can price people only for the food you are serving. But then who will pay for the nice ambience you have built up for your customers? Who will pay for the band you have for music? Thus these elements have to be taken into consideration while costing. Generally service pricing involves taking into consideration labor, material cost and overhead costs. By adding a profit mark up you get your final service pricing. You can also read about pricing strategies. Here on we start towards the extended service marketing mix. People People is one of the elements of service marketing mix. People define a service. If you have an IT company, your software engineers define you. If you have a restaurant, your chef and service staff defines you. If you are into banking, employees in your branch and their behavior towards customers defines you. In case of service marketing, people can make or break an organization. Thus many companies nowadays are involved into specially getting their staff trained in interpersonal skills and customer service with a focus towards customer satisfaction. In fact many companies have to undergo accreditation to show that their staff is better than the rest. Definitely a USP in case of services. Process Service process is the way in which a service is delivered to the end customer. Lets take the example of two very good companies Mcdonalds and Fedex. Both the companies thrive on their quick service and the reason they can do that is their confidence on their processes. On top of it, the demand of these services is such that they have to deliver optimally without a loss in quality. Thus the process of a service company in delivering its product is of utmost importance. It is also a critical component in the service blueprint, wherein before establishing the service, the company defines exactly what should be the process of the service product reaching the end customer. Physical Evidence The last element in the service marketing mix is a very important element. As said before, services are intangible in nature. However, to create a better customer experience tangible elements are also delivered with the service. Take an example of a restaurant which has only chairs and tables and good food, or a restaurant which has ambient lighting, nice music along with good seating arrangement and this also serves good food. Which one will you prefer? The one with the nice ambience. Thats physical evidence. Several times, physical evidence is used as a differentiator in service marketing. Imagine a private hospital and a government hospital. A private hospital will have plush offices and well dressed staff. Same

cannot be said for a government hospital. Thus physical evidence acts as a differentiator. This is the service marketing mix (7p) which is also known as the extended marketing mix.