Marketing of Goods and Services


Marketing of Goods and Services

From the market of goods to the market of services – development of a marketing strategy

Marketing of goods and services as a process of identifying and satisfying customer needs is one of the most dynamically developing areas. Until recently, traditional marketing was based on 4 main criteria, but already in the 60s of the last century they were replaced by the mastery of 12 key factors that affect the productivity and quality of the promotion of goods and services.

Marketing mix and classic 4P marketing

When considering marketing models, the term “marketing mix” is the key – it should be understood as a combination of all factors that determine the performance of any company.

Integration of all components of mix marketing enables:

identify the value of the goods or services offered to consumers;
identify appropriate channels for its distribution;
set a competitive price, focusing on the needs of customers;
Find suitable advertising channels.
4p marketing mix modelThe main marketing model on which all promotion strategies were built was a 4P marketing mix for a long time. This strategy was based on 4 main components: product, place, price and promotion. The created product must meet the needs of consumers, price – quality, place – to determine the availability of the product for consumers, and promotion consisted in communication with the consumer.

Marketing Transformation – 5P to 7P

At the end of the 70s of the last century, a new component appeared in the classical model – people who in one way or another take part in the sale of goods. Marketers came to the conclusion that the success of sales largely depends on the communication of sellers with customers. So the marketing mix 4P was replaced by the 5P model.

5p marketing mix modelF. Kotler introduced his vision of marketing – to the traditional 4 parameters, he added political power and public support. His concept was that when developing foreign markets, the manufacturer had to seek support from these two named structures. So there was a mix model 6P.

The concept of 7P that came to replace it is based on adding to the four main components three new ones related to the service sector – this is the process, people and the need to confirm the quality of the goods or services. This model is now widely in demand in companies engaged in the provision of services – consumer and business environments.

mix marketing model 7pProof of quality confirmation has become an important factor for marketing strategy. But its complexity lies in the fact that the assessment of the quality of services largely depends on the expectations of the client and is subjective. For example, when going to a restaurant, a client expects to receive the friendly staff, prompt service, a pleasant atmosphere and delicious, beautifully decorated food. At the same time, service providers compete among themselves not only in the quality of services, but are also forced to look for ways to minimize their costs in order to offer customers the lowest possible price for quality services.

What is 8P Marketing

Although the 7P marketing model is in many respects in line with modern requirements of the commercial environment, the market encourages marketers to look for new opportunities for integrating components that meet emerging challenges. One of these challenges that directly affect the competitiveness of an enterprise in the market is cost reduction while increasing labor productivity . Another important point that increases competitiveness is the differentiation of your company from competitors by using quality management services.

Thus, the eighth component of the marketing mix 8P was productivity and quality – effective service management while minimizing the cost of production resources. With effective management of this criterion, profitability increases not only due to increased sales, but also by managing the additional costs that relate to services. Improving their delivery is achieved through standardization. With the right approach to organizing processes in the service sector, productivity growth is observed at all stages of sales.

Problems and criteria for assessing the quality of services
The main difficulty in providing services is that they are intangible, which means that customers who purchase them are at risk and, on the other hand, provide their supplier with a credit of trust. From the point of view of the seller, the services should be provided with a certain level of quality at a fair price .

Quality control

On the other hand, the problem of confirming the quality of services is quite serious, because customer satisfaction depends on his subjective expectations. Therefore, service providers emphasize the formation of loyalty to their service, which allows them to take their place in the market, and the consumer to get a certain idea of ​​the services offered before they are received.

High competition in the services market is associated not only with other services, but also with their customers, who often want to save on services through independent actions (for example, make repairs). For this reason, companies have to maneuver between setting fair prices for services that bring profit to the company and specific offers on the market. To achieve increased competitiveness of its service is obtained by improving the efficiency of human resource management and standardization of processes. It is due to standardization that it is possible not only to reduce the price for their services, but also to make them understandable to potential buyers, that is, to bring subjective expectations as close as possible to the seller’s offer.

On the other hand, standardization carries certain risks for the company, because people have specific needs and want to be treated in a special way . Therefore, managers have to look for a middle ground, training personnel from a set of standard procedures to create an individual approach to a specific client, while spending a minimum of finance.

From the beginning of the industrial era to the present day, the marketing concept has undergone significant changes and expanded the number of parameters it takes into account. The marketing of goods and services has evolved from the classic 4P to 8P, which contributed to the optimization of the company and the growth of its profits not only through sales growth. And the increasing influence of the Internet on the process of communication with the target audience opens up new prospects for improving marketing concepts.

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