Team 4 Services & Sales
SERVICE & SALES
8 P’s of Service Marketing
28.02.2010
Introduction
Team 4 Services & Sales
• Marketing can be viewed as:
 A strategic and competitive thrust pursued by top management.
 A set of functional activities performed by line managers.
 A customer-driven orientation for the entire organization.
• Marketing is the only function to bring operating revenues
into a business; all other functions are cost centers.
• The “8Ps” of Services Marketing are needed to create
viable strategies for meeting customer needs profitably in
a competitive marketplace.
Introduction
Team 4 Services & Sales
• Mercadona is a distribution company operating in the
supermarket segment. It is backed by 100% Spanish
capital and its CEO is Juan Roig. Nationally, it is present in
46 provinces in 15 autonomous communities with a
network of 1,266 supermarkets.
• Its facilities and customers are attended by more than
62,000 individuals throughout the different stages of the
process, 100% of which have permanent job positions.
• Its supermarkets have an average of 1,300 square metres
of retail floor space and are based on a model of urban
commerce that is close at hand with an ample selection in
fresh and dry groceries, beauty and household supplies as
well as pet food.
Introduction
Team 4 Services & Sales
• In 2008, Mercadona achieved a turnover of 13,986 billion
euros, what means the 1,4% of the GDP (PIB) in Spain.
8 P’s of Service Marketing
1. Product Elements
2. Place and Time
3. Price and Other User
Outlays
4. Promotion and Education
5. Process
6. Physical Environment
7. People
8. Productivity and Quality
Team 4 Services & Sales
8 P’s of Service Marketing
Team 4 Services & Sales
P1. Product Elements
• Embrace all aspects of service performance that create
value
• Core product responds to customer’s primary need
• Array of supplementary service elements
 Help customer use core product effectively
 Add value through useful enhancements
• Planning marketing mix begins with creating a service
concept that:
 Will offer value to target customers
 Satisfy their needs better than competing alternatives
8 P’s of Service Marketing
Team 4 Services & Sales
P1. Product Elements
• OWN BRAND - WHITE LABEL PRODUCT:
 Company of alimentation, MERCADONA propose more than
9.200 products, many of them dedicate only to MERCADONA
(clavo, bonka, don simon...)
 A white label product is a product produced by one company (the
producer) that other companies (the marketers) rebrand to make it
appear as if they made it.
 "Mercadona buys from a manufacturer in bulk and puts its own
name on the product : HACENDADO / BOSQUE VERDE /
DELIPLUS"
 "It gives Mercadona:More freedom and flexibility in pricingMore
control over product attributes and qualityHigher margins (or lower
selling price)Eliminates much of the manufacturer's promotional
costs“
8 P’s of Service Marketing
P2.
Place & Time
• Marketing
can be viewed as:
• Delivery decisions: Where, When, How
• Geographic locations served
• Service schedules
• Physical channels
• Electronic channels
• Customer control and convenience
• Channel partners/intermediaries
Team 4 Services & Sales
8 P’s of Service Marketing
Team 4 Services & Sales
P2.
Place & Time
• Marketing
can be viewed as:
• OWN DISTRIBUTION CHANNEL




1.474.775 m² of sale surface, and 12.1% of the share of market
Presence in 46 cities.
1.137 supermarkets in 46 provinces.
Once the product is bought from the manufacturer, it is stored in
the Mercadona logistics centres, which subsequently distribute the
product among the shops by its own distribution channel.
 Mercadona gives the customer freedom and convenience,
because the customers can buy what they want when they want it,
all in the same place and always with savings
8 P’s of Service Marketing
Team 4 Services & Sales
P2.
Place & Time
• Marketing
can be viewed as:
• TOTALLER STRATEGY
 Mercadona offers their clients all the product in order enable them
to do the "global shopping"
 Mercadona offers an ample selection in fresh and dry groceries,
beauty and household supplies as well as pet food
8 P’s of Service Marketing
P2.
Place & Time
• Marketing
can be viewed as:
• SERVICES
• FRESH BAKED BREAD
• HOME DELIVERY SERVICE
• TELEPHONE ORDERS
• ONLINE SHOPPING
Team 4 Services & Sales
8 P’s of Service Marketing
Team 4 Services & Sales
P3.
Price andcan
Other
Outlays
• Marketing
be User
viewed
as:
• Marketers must recognize that customer outlays involve
more than price paid to seller
• Traditional pricing tasks:
 Selling price, discounts, premiums
 Margins for intermediaries (if any)
 Credit terms
• Identify and minimize other costs incurred by users:
 Additional monetary costs associated with service usage (e.g.,
travel to service location, parking, phone, babysitting, etc.)
 Time expenditures, especially waiting
 Unwanted mental and physical effort
 Negative sensory experiences
8 P’s of Service Marketing
Team 4 Services & Sales
P3.
Price andcan
Other
Outlays
• Marketing
be User
viewed
as:
• A.L.P. (ALWAYS LOW PRICES)
 The commercial strategy that the company has been developing
since 1993 is called A.L.P. (Always Low Prices).
 Buying from a manufacturer in bulk enables Mercadona to have a
lower selling price
 With ALP, the customers receive genuine savings because all of
Mercadona products are ALWAYS AT LOW PRICES.
8 P’s of Service Marketing
Team 4 Services & Sales
P4.
Promotion
& Education
• Marketing
can
be viewed as:
• Informing, educating, persuading, reminding customers
• Marketing communication tools




Media elements (print, broadcast, outdoor, retail, the Internet, etc.)
Personal selling, customer service
Sales promotion
Publicity/PR
• Imagery and recognition
 Branding
 Corporate design
• Content
 Information, advice
 Persuasive messages
 Customer education/training
8 P’s of Service Marketing
Team 4 Services & Sales
P4.
Promotion
& Education
• Marketing
can
be viewed as:
• LIMITED ADVERTISEMENT INVESTMENT
 Total quality, liberty of selecion, variety.Services after sales (
atencion al cliente SAC ) : more than 1 milon of consultation
 The main ways of communication are to build the Mercadona´s
company image (quality, prices, sutervices) and get spread by the
word of mouth of the customers
 To a certain extent, White Label products take advantage of the
name-brand as a reminder, due to the fact that when the customer
see a name-brand product, they think in the equivalent white label
product
8 P’s of Service Marketing
Team 4 Services & Sales
P5.
Process can be viewed as:
• Marketing
• How firm does things may be as important as what it does
• Customers often actively involved in processes, especially
when acting as co-producers of service
• Process involves choices of method and sequence in
service creation and delivery





Design of activity flows
Number and sequence of actions for customers
Nature of customer involvement
Role of contact personnel
Role of technology, degree of automation
• Badly designed processes waste time, create poor
experiences, and disappoint customers
8 P’s of Service Marketing
Team 4 Services & Sales
P5.
Process can be viewed as:
• Marketing
• WHY MERCADONA CAN OFFER ALP?
 Because Mercadona buy products directly from the source.
 Because Mercadona set up long-term agreements with
manufacturers, which lets them offer their customers high-quality
products at prices that are extremely low and stable.
• LOGISTICS NETWORK
 More than 2000 suppliers, 800 millons euros invest.
 Mercadona can guarantee the efficiency of the supply chain with
its logistics centres in Spain as:
 Ingenio centre in Gran Canaria, Riba-Roja de Túria (Valencia),
Antequera (Málaga), Sant Sadurní de Anoia (Barcelona), San
Isidro (Alicante), Huévar (Sevilla), Granadilla de Abona (Tenerife)
and Ciempozuelos (Madrid), Villadangos del Pbuiltáramo (León),
Guadix (Granada) and Pla-Za (Zaragoza).
8 P’s of Service Marketing
Team 4 Services & Sales
P6.
Physical Environment
• Marketing
can be viewed as:
• Design servicescape and provide tangible evidence of
service performances
• Create and maintain physical appearances






Buildings/landscaping
Interior design/furnishings
Vehicles/equipment
Staff grooming/clothing
Sounds and smells
Other tangibles
• Manage physical cues carefully— can have profound
impact on customer impressions
8 P’s of Service Marketing
Team 4 Services & Sales
P6.
Physical Environment
• Marketing
can be viewed as:
• "ENVIRONMENTS"
 Supermarket sections laid out in “environments”
 Customers can buy what they want when they want it, all in the
same place
 Spacious and modern facilities with a full range of services so that
the shopping can be as convenient as possible
 Butcher´s Shop replacement with modern counters of meat
 8 Blocs Logistics and funcionement
 3 Blocs of logistics project and execusion: Granada, Leon and
Zaragoza.
8 P’s of Service Marketing
P6.
Physical Environment
• Marketing
can be viewed as:
• SERVICES
• CUSTOMER PARKING
• BAG LOCKERS
• CLIMATE CONTROL
• BANK CARDS
Team 4 Services & Sales
8 P’s of Service Marketing
Team 4 Services & Sales
P7.
People can be viewed as:
• Marketing
• Interactions between customers and contact personnel
strongly influence customer perceptions of service quality
• The right customer-contact employees performing tasks
well




Job design
Recruiting
Training
Motivation
• The right customers for firm’s mission
 Contribute positively to experience of other customers
 Possess—or can be trained to have— needed skills (coproduction)
 Can shape customer roles and manage customer behavior
8 P’s of Service Marketing
Team 4 Services & Sales
P7.
People can be viewed as:
• Marketing
• SERVICES DATA
 3.700 workers, investement of about 72 million of euros for the
formacion (1.200 e by workers). Bonus if the companie reach his
objectives : 160 millions, share between all the workers.
• "THE BOSS"
 MERCADONA implemented its TOTAL QUALITY approach in
1993. This decision prompted the company to rearrange its
priorities as follows: Customers, otherwise known internally as the
"Boss", Workers, Suppliers, the Company and Capital.
 The TOTAL QUALITY model has led Mercadona to regard
Workers as their second priority. An example of this is that 100% of
the more than 62.000 individuals that form a part of the
organisation are permanent.
8 P’s of Service Marketing
Team 4 Services & Sales
P7.
People can be viewed as:
• Marketing
 It also bears mentioning that workers are paid 100% of their salary
in the event of occupational disability, and that their minimum
salaries are higher than the average paid in the sector.
 The more than 62.000 individuals that make up the company
receive TOTAL QUALITY training, with each worker enrolling in
specific courses of 70 hours/year, among others.
 Training of the personnel in butcher´s shops: Transformation of the
Butcher in a customer advisor
 Reply complaints is an obligation for the employees. A complaint is
understood as an oportunity.
• FREE CUSTOMER SERVICE LINE
8 P’s of Service Marketing
Team 4 Services & Sales
P8.
Productivity
Qualityas:
• Marketing
canand
be viewed
• Productivity and quality must work hand in hand
• Improving productivity key to reducing costs
• Improving and maintaining quality essential for building
customer satisfaction and loyalty
• Ideally, strategies should be sought to improve both
productivity and quality simultaneously—technology often
the key
 Technology-based innovations have potential to create high
payoffs
 But, must be user friendly and deliver valued customer benefits
8 P’s of Service Marketing
Team 4 Services & Sales
P8. Productivity and Quality
• PRODUCTIVITY DATA
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Contribution to the spanish PIB : 2.516 million euros.
Investment to the "green policy" (medio-ambiantal) : 17 millions.
EBITDA: 336 mil (+39%)
Productivity: 220 000€
• MAXIMUM QUALITY
 MERCADONA guarantees their clients the Maximm Quality of its
products at the moment of purchase and at the moment of
consumption
 MERCADONA is making efforts to ensure intrinsic product quality
through its Life Principle strategy.
 MERCADONA buys their products directly from the source, without
go-betweens.
8 P’s of Service Marketing
Team 4 Services & Sales
P8. Productivity and Quality
 MERCADONA schedule our purchases, which cuts down on
transport and storage times, with products being kept at their
optimal temperature.
 MERCADONA select the finest quality and make sure that
products arrive to the customers in the least time possible and with
the maximum freshness.
 All of MERCADONA´s products are subject to rigorous quality
controls in order to ensure that they are maintained in perfect
conditions of hygiene and freshness.
 MERCADONA has their own exclusive brands that are supplied by
the leading manufactures, whose products are checked and
guaranteed to sell them in the finest conditions.
 Productivity and quality must work hand in hand
 Improving productivity key to reducing costs
8 P’s of Service Marketing
Team 4 Services & Sales
P8. Productivity and Quality
 Improving and maintaining quality essential for building customer
satisfaction and loyalty
 Ideally, strategies should be sought to improve both productivity
and quality simultaneously—technology often the key