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4.5.6 Processes

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  • Unit 4 - Marketing/
  • 4.5 The seven Ps of the marketing mix/
  • 4.5.6 Processes

Processes in the marketing mix (AO3)

This section of the syllabus requires students to understand the importance of delivery processes in marketing a service and changes in these processes.

 Teacher only box

Note to teachers

In the previous guide (syllabus), processes in the marketing mix was part of the extended marketing mix for HL only students. The extended marketing mix is no longer explicitly referred to in the new guide, and all 7 Ps of the marketing mix now apply to both SL and HL students.

Please be aware of the above points when referring to or using past IB exam papers and mark schemes.

Process in the extended marketing mix is about the way in which a service is provided or delivered to customers. It refers to the operational aspects of a service, such as the management of booking and queueing systems at a cinema, theme park, sports arena or a restaurant. It also includes processes for managing customer feedback and complaints, processes for identifying customer needs and requirements, and processes for taking orders.

For example, customers at an increasing number of McDonald’s restaurants can order their food using automated touch-screen menus and pay by credit card. Many ice cream parlours, like Häagen-Dazs shops, give people free tasting samples to enhance customer experience and the quality of service.

The systems and processes set up by the organization affect the execution of the services provided for its customers. Processes include:

  • Payment systems, e.g. credit card, smartcards, store loyalty cards, smart payment system such as Apple Pay, online bank transfers, and instalment (hire purchase) payment options

  • Website design, navigation and functionality

  • Value-added services, such as complimentary car parking and operational support

  • Customer services, such as refunds/returns policy, systems for dealing with customer complaints

  • Delivery services, such as free delivery of items purchased in-store

  • Environmental sustainability practices, such as using opt-in receipts (where printed receipts are only given to customers if they request one - otherwise they can be emailed to customers instead)

  • After-sales care, including insurance, product warranties and guarantees

  • Queueing systems and waiting times.

Businesses that do not effectively manage the waiting time for their services will upset customers. The consequences include: disgruntled customers, customer complaints, a poorer corporate image and negative word of mouth marketing. Customers might seek compensation and/may switch to alternative suppliers.

 

Customers do not like to be stuck in long queues

Many businesses attempt to detract customers from conscientiously thinking about the opportunity cost of waiting in line to be served. For example, Le Petit Chef (The Little Chef) has used 3D projection technology since April 2015 to entertain diners at their restaurants whilst they wait for their food to be prepared and served. The company uses these creative processes as part of its marketing mix to bring food to life.

 Take a look at this example, where the world's smallest chef prepares a virtual dessert for customers whilst they wait for their actual physical desserts(!)

See more of Le Petit Chef's "Skullmapping" technology by clicking the link here.

 Case Study 1 - The opportunity cost of waiting

Businesses have to make decisions that affect their daily operations and their long term prospects. Opportunity cost is defined as the best alternative that is forgone when making a decision. Due to limited resources and budgets (such as human resources, time and money) businesses are confronted with competing choices. Customers, however, do not like to wait for the delivery of their purchase, be it a good or service - that is, there is an opportunity cost to queues and waiting times.

Some examples of businesses addressing the opportunity cost for their customers include:

  • Mirrors have long been used in places with lifts (elevators), such as in hotels and department stores. Customers do not necessarily notice the waiting time - and hence refrain from being annoyed at the business - as they stare at themselves in the mirror! The same reasoning applies when customers enter the lift - there are mirrors inside too for this reason.

  • Music and entertainment is a major feature at many theme (leisure) parks. Disneyland operators try to sidetrack time-conscious customers by providing music, live entertainment and use of large movie screens to distract customers whilst they wait in line for thrill rides and other attractions. This all helps to provide a better overall experience for their customers.

  • Whilst waiting at supermarket checkouts, you may notice the ‘bins’ next to the counter. These are a last minute attempt by the supermarkets to lure customers to buy miscellaneous items (hence the term ‘bins’) such as confectionery and batteries. The other purpose is, again, to distract people waiting in the queue.

  • Airline companies often overbook the number of seats on a flight. This is because, statistically, flights are rarely booked at full capacity. However, as a result of the policy, airlines sometimes face the problem of overbooking and will need to ‘bump off’ customers, i.e. to offer them compensation for having to wait for the next available flight. Similarly, people who value time less conscientiously may purchase stand-by tickets which are cheaper but more inconvenient.

  • Women’s clothes retailing is a massive industry. However, women are often accompanied by their husbands, boyfriends or partners who tend to have less patience in a shopping mall – look out for this next time you are out shopping! Marketers have noticed this fact and have responded. Many retail outlets now provide newspapers and male-orientated publications (such as motor vehicles or male fashion magazines) so that the girlfriend or wife can shop in peace! The retail outlets hope that this strategy will then allow the customers to spend much longer in their shops, thereby increasing the chance of more sales.

  • 7-Eleven convenience stores, the Japanese-owned multinational company, charges higher prices than supermarkets for the same products.The surcharge is ‘justified’ as most of their stores are open 24-7, so customers pay for this convenience and the opportunity cost of having to pay higher wages to staff working unsociable hours.

 Case Study 2 - Apple's "Genius Bar"

Genius Bar at Apple Store in Istanbul, Turkey

Apple competes through the use of non-price competition methods, including the provision of unparalleled after-sales services in the industry. In particular, the company is well-known for its Genius Bar. This innovative concept provides customers with technical support stations located inside all of Apple's retail stores. As part of its extended marketing mix, the purpose of the Genius Bar is to support for customers purchasing Apple products by providing bespoke, concierge-style customer service and technical support . Ron Johnson, the former Senior Vice President for Retail at Apple, referred to the Genius Bar as the "heart and soul of our stores".

Genius Bar employees are specially trained and certified. Their role is to support customers with questions and problems about Apple's hardware and software. This service provides customers with the reassurance that they will always have technical support and troubleshooting support for their iPods, iPhones, Apple Watch, Apple TV, HomePod, Mac Books and array of other Apple products including application software.

 Case Study 3 - The IB Diploma results and appeals process

Each year, over 180,000 IB Diploma candidates receive their IB examination results. The IB operates a process called "Enquiry Upon Results" (or EUR for short) as a service for schools and students who believe that the grade awarded is incorrect, for whatever reason. The school's IB Coordinator can request an EUR based on the following categories:

  • Category 1 re-mark: The re-mark of externally assessed material for an individual candidate.

  • Category 2A: The return of externally assessed material by component for all candidates.

  • Category 2B: The return of externally assessed material by subject/level for an individual candidate.

  • Category 3 re-moderation: The re-moderation of marks for IA by subject/level.

EUR Category 1 (re-marks) - this service enables a particular candidate’s externally assessed components for a subject to remarked.

The EUR Category 1 process also enables students to request a re-mark of their EE and/or TOK essay, as these are both externally assessed. There is a fee for each EUR (around $120) although this is fully reimbursed should the grade for a subject or other assessment work go up after the re-mark.

However, there is also the possibility of marks for externally assessed work to go down, so it is only advisable to submit an EUR Category 1 application if the student is within a few marks of the higher grade boundary. So, wait until the component scores become available, and speak to the IB DP Coordinator, subject teacher(s), parents, and student before making any final decision.

In most cases (statistically) the grade remains unchanged even if the actual number of marks may have changed.

EUR Category 2A (return of scripts for all candidates) - this service enables schools to recall copies of externally assessed component materials for all candidates in the cohort, such as recalling every student's IB Business Management Extended Essay or their Paper 1 scripts.

Again, there is a charge for this service, but it is highly recommended and particularly useful for relatively new teachers. This is because the returned scripts for externally assessed material by component for all candidates enables teachers to see where marks have been awarded by the examiners for all students. This can provide useful feedback for future teaching.

Speak to your DP Coordinator for more information about the EUR Category 2A service.

EUR Category 2B (return of scripts for single candidate) - this service enables schools to recall externally assessed material by subject / level for an individual candidate.

This means the return of a particular student's external examination papers (i.e. Paper 1 & 2 for both SL and HL Business Management students). This process can be useful for candidates, their parents and the school in deciding whether to submit an EUR 1 application for remarking of their scripts.

Some schools have a policy of automatically requesting an EUR Category 2B application for any student within 1 or 2 marks off the next higher grade. This enables the subject expert(s) and DP Coordinator to review the student's scripts to assess whether the student is likely to have a good chance of their grade changing after re-marking (through the EUR Category 1 process). This can make matters more objective and evidence-based when making recommendations to the students and parents.

EUR Category 3 (re-moderation of internal assessments) - This process enable schools to have the sample of internal assessments for a particular subject to be re-moderated. However, this can only be applied for by the DP Coordinator if the sample falls outside of the IB's tolerance level based on the school's internally assessed marks and the IB's moderated marks for the sample selected for external moderation.

Again, there will be a fee charged for this service. It is useful however to submit the EUR Category 3 is the IAs have been heavily moderated down and the school has a case to believe this is unwarranted.

The re-moderation process can result in the same IA grades or an increase in the IA grades for students. It will not result in a lowered IA grade. However, unlike the EUR Category 1 (re-mark), a change in grades for the IA (if this should occur) does not result in a refund of fees.

All EUR requests must be made through the school's IB Coordinator and must be received by the IB before the official end of the examination session, i.e., by 15th September for May centres and 15th March for November centres. Full information about EURs and their cost is detailed in the "IB Diploma Programme Assessment Procedures" and "Fees and Billing information for IB World Schools", both of which are available from the programme resources centre on My IB.

Again, speak to the school's DP Coordinator for further advice about this.

Note: everything regarding the EUR process has to go through the school's IB Coordinator. The IB will not liaise with teachers or parents directly regarding issues related to EURs.

 Watch this video clip about food vending machines in a Japanese restaurant, where there are no staff(!)

Key term

Process in the extended marketing mix (the 7 Ps) is about the way in which a service is provided or delivered to customers. It involves the operational aspects of a service provided to customers, such as the management of bookings, payments and queueing systems.

Return to the Unit 4.5 - The seven Ps of the marketing mix homepage

Return to the Unit 4 - Marketing homepage