India Citibank and 7 P’s of Services Marketing

A marketing mix is a business tool based on the four basic P’s. The term “marketing mix” was first introduced in 1953 by the American Marketing Association president. In services marketing, however, they use the following seven P’s to define the nature of services: price, product, promotion, place, people, process, and physical evidence.

To begin with, E. Jerome McCarthy specially selected four words beginning with the English letter “P”, which played a significant role in marketing, and called them marketing mix1. Today, however, one can often hear about the seven “P’s”. The question is, why do we need those “P’s”? The seven P’s theory is striving to complete seven different goals. They cover a range of measures to attract customers2.It should be noted that, by the highest standards, the strategy is just the company’s intention to act in a particular way in a particular market segment, and it is quite general, it does not go into details3.Managing and keeping the situation under control is possible only by implementing measures with specific deadlines, people responsible for their implementation and the necessary resources (financial, human, etc.), in other words, by a detailed plan. “All elements of the marketing mix should include a strategic level to ensure that the system of long-term planning of investment programs,” says Borden4.

As mentioned afore, initially, there were four groups of variables that are conventionally termed product (commodity), price (value), place (methods and place of sale of the goods), and promotion (incentives). The product represents what company offers the market and the customer. It could be both physical goods and services, even the idea. The successful product is always based on understanding and meeting the critical needs of the target market5. The process of marketing strategy on that level also includes the development and change of packaging, trademarks, product quality, product warranty, and clientele support and service. If take Citibank as an example, it offers various products among which checking products, cash management, credit products, global business solutions, and meeting customer’s personal banking needs. India Citibank needed to decide whether they would use a generic name, or call an account something, so they called savings to account Suhidva6.

Price is a second significant element of the marketing mix because it is responsible for the ultimate profit from the sale of goods and services. Ennew claims “rice is based on the good’s value, the prime cost of a product, the prices of competitors, and desirable rate of profit”7. The following solutions could be accepted in the services marketing at the price level: entry pricing strategy, retail price, pricing for the various sales channels (for example, volume discounts, bonuses for large wholesalers, etc.), seasonal discounts or shares, and the possibility of price discrimination. Speaking of Citibank, knowledge of the importance of pricing strategy, especially elasticity and keeping eyes on rivals helps to remain one of the most successful banks in the world8.

The place of sale provides availability of a product for the target market and means that the goods of the company have to be presented in the market at the right place (where the target consumer can access and purchase it) at the right time (when the target consumer has the wish to buy it). In other words, the place of sale designates model of the distribution of goods of the company. In the role of distribution channels, there might be supermarkets, convenience stores, and grocery markets, specialized shops; wholesales, etc.). As an example, there is Citibank’s online banking secure, web-based platform designed for mid-sized businesses, to access Treasury Services including Cash Management, Trade Finance, and Foreign Exchange9. Moreover, Citibank follows its customers almost in every country in order to provide a high-quality global offer10.

In the context of the marketing mix, promotion refers to all marketing communications that allows attracting the consumer’s attention to the product, providing information about the product and its key features, and creating a need for acquiring goods and repeat purchases. Advertising, sales promotion, search optimization, PR, direct marketing, and others are elements of promotion. For example, Citibank among other ways uses direct mail to promote various products like home loans and credits cards11. Sales agents of the Citibank are working with potential clients and convincing them that the Citibank is the best bank for them. As an additional incentive to the purchase, they carry out special activities like credit sales at low-interest rates.

In the process of the complication of the competition on the market, the marketing model of a mix of 4P’s underwent considerable changes and into 7P’s model. Every company may use the principal components of the 4P’s marketing mix while new 7P’s model that includes process, people, and physical evidence are more relevant and suitable for the B2B (business-to-business) market and when the corresponding product is a service12. The term «people» appeared as a result of the development of relationship marketing and services marketing. Employees representing the company and executing the service, sales staff that is in contact with the target consumer, producers, which could have an impact on the cost and quality of the goods, are essential for any service providing company. Therefore, all personnel that will contact clients have to receive appropriate training because, for some clients, quality of service can be more important than price. As Ennew says, “Citibank offers distinct service features like 24-hour access ATM, online transactions, or credit card”13.

The term “process” describes the process of interaction between the customer and the company. This interaction is paid special attention, as it is the basis for the purchase on the market and building customer loyalty. The goal is to make the buying and use of the service processes as comfortable as possible for the consumer. An example of the importance of the process for the services market is the process and speed of service in the Citibank. Properly debugged process of interaction (as job queuing or query handling) forms bank’s one of the distinctive advantages – the speed of service. According to the Citibank, social responsibility is a part of their marketing strategy: “all our efforts are focused on simple but important purpose: to enable people to change their lives, their businesses and society for the better”14. Its responsibility to the society in which Citibank operates, expressed in the corporate culture, service, and marketing strategy.

Physical evidence describes the customer’s surrounding during service purchasing. The physical environment allows creating the right image of the company and highlighting the distinctive features of the service. According to Borden, “it reminds or reassures the customer that the service took place, positively or negatively”15. For instance, Citibank ambience or manager presentation is always praiseworthy.

To put everything in a nutshell, one may notice that all new 3P’s of the marketing mix are internal factors of the company while the first four elements present external characteristics. 7 P’s theory of services marketing recognizes that everything that happens within the enterprise is directly related to marketing; therefore, both external and internal factors are important. The Citibank uses a combination of these factors to produce the desired reaction of the target market. In order to achieve the preferred response from the target, customer bank uses a variety of tools and instruments that form together 7P’s marketing mix.

Works Cited

Borden, N., “The Concept of the Marketing Mix”, Suman Thapa. Web.

Ennew, C., & Waite, N., Financial Services Marketing an International Guide to Principles and Practice, New York, Routledge, 2013.

Ennew, C., Watkins, T., & Wright, M., Cases in Marketing Financial Services, Oxford, Butterworth-Heinemann, 2014.

Jham, V., Cases on Consumer-centric Marketing Management, Hershey, PA, Business Science Reference, 2014.

Kalaimani, G., “7 P’S of Services Marketing in Insurance and Banking”, Journal of Management and Science, 2249-1260, 1-3.

Kotler, P., Marketing Management, Upper Saddle River, NJ, Prentice Hall, 2009.

Nargundkar, R., Services Marketing: Text & Cases, 3rd ed., New Delhi, India, Tata McGraw Hill Education, 2010.

Rao, R.M., Services Marketing, New Delhi, Pearson Education, 2011.

“The Citibank”, Citibank . Web.

Wirtz, J., Chew, P., & Lovelock, C., Essentials of Services Marketing, Jurong, Pearson Education, 2012.

Footnotes

  1. P. Kotler, Marketing Management, Upper Saddle River, NJ, Prentice-Hall, 2009.
  2. R.M. Rao, Services Marketing, New Delhi, Pearson Education, 2011.
  3. G. Kalaimani, “7 P’S of Services Marketing in Insurance and Banking”, Journal of Management and Science, 2249-1260, 1-3.
  4. N. Borden, “The Concept of the Marketing Mix”, Suman Thapa.
  5. C. Ennew, & N. Waite, Financial Services Marketing an International Guide to Principles and Practice, New York, Routledge, 2013.
  6. R. Nargundkar, Services Marketing: Text & Cases, 3rd ed., New Delhi, India, Tata McGraw Hill Education, 2010.
  7. C. Ennew, T. Watkins, & M. Wright, Cases in Marketing Financial Services, Oxford, Butterworth-Heinemann, 2014.
  8. J. Wirtz, P. Chew, & C. Lovelock, Essentials of Services Marketing, Jurong, Pearson Education, 2012.
  9. “The Citibank”, Citibank [website].
  10. V. Jham, Cases on Consumer-centric Marketing Management, Hershey, PA, Business Science Reference, 2014.
  11. R. Nargundkar, Services Marketing: Text & Cases, 3rd ed., New Delhi, India, Tata McGraw Hill Education, 2010.
  12. C. Ennew, & N. Waite, Financial Services Marketing an International Guide to Principles and Practice, New York, Routledge, 2013.
  13. C. Ennew, T. Watkins, & M. Wright, Cases in Marketing Financial Services, Oxford, Butterworth-Heinemann, 2014.
  14. “The Citibank”, Citibank [website].
  15. N. Borden, “The Concept of the Marketing Mix”, Suman Thapa.