The service industry in India came of age in the early 1990s. It was a sobering realisation that the 4Ps of marketing that B-schools and Harvard case studies had drilled into us had, without warning, expanded into 7Ps — Product, Price, Place, Promotion, People, Processes, and Physical evidence. New skill-sets had to be developed to deal with the new reality for which there was no rule book to fall back on.
As I reflect on how the 7Ps work in action, two companies that I had worked for, come to mind. One, Sterling Holiday Resorts India Ltd, now a part of the Thomas Cook India Ltd (TCIL), where I joined as General Manager and exited as Assistant Vice-President, East, after which I headed Hyderabad-based GATI Cargo Management Services (currently GATI-KWE).
Let’s explore the foundations on which the marketing success of these companies is built.
The idea behind establishing the company was to provide the great Indian middle-class holiday year after year without having to spend too much on lodging. By making a reasonable one-time payment, they received access to a guaranteed, free stay for a week’s time every year at a particular resort or any of the other resorts available. The life of the offer was 99 years and it was transferable to progeny. However, a small yearly maintenance charge had to be paid.
Since 2014, Sterling is a 100 per cent independently managed subsidiary of TCIL and a part of the global conglomerate, Fairfax Financial Holdings Ltd, Toronto. With 2,200+ rooms spread across 30+ resorts in myriad destinations and a host of unique and curated experiences to offer, Sterling is a leading experiential holiday company even today. The service provided is an inflation-free holiday for the middle-class.
Let’s try and understand the strategy behind.
- Segment identified : The great Indian middle class
- Target group: Middle class looking for an affordable holiday
- Positioning: Inexpensive middle class family holiday providers
Value proposition offered:
- Functional: Cheap middle-class holiday
- Emotional: The great escape
- Self-expressive: Fun activities at a variety of resorts
- Product/service: Cheap regular vacation or fun time
- Price: Very economical
- Place: Sold through branch offices (easy access)
- Promotion: Heavy advertising in papers and events
- People: Trained managers
- Processes: Reservation systems computerised
- Physical evidence: Bustling resorts
Currently, GATI- KWE has a turnover of ₹1,800+ crore. GATI Cargo Management Services began in 1989 as a small cargo door-to-door transporter.
- Segment: which it serviced required safe and timely transport of small, precious or breakable cargo.
- Target group: Individuals and companies
- Positioning: Premium logistics provider, carrying cargo, typically up to 45 kgs
Value proposition offered:
- Functional: Safe and timely delivery
- Emotional: Peace of mind
- Self-expressive: Savvy customer
- Door pick-up and delivery
- Assured delivery schedules
- Proof of delivery provided
- Money-back guarantee, if late
- Product: Novel, niche service
- Pricing: Premium
- Place: Widest pick-up and delivery network
- Promotion: Alliance of a ₹30 crore company with the ₹3,000 crore Indian Airlines widely advertised in Swagat, Indian Airline’s in-flight magazine, and launch events all over India. Entered big time through this publicity.
- Processes: Streamlined operational hubs/expert route planning
- Physical evidence: Hubs and branch offices
- People: Trained personnel
It is observed that though both service organisations are vastly different from each other, both have been very clear in their vision from inception. Both are vastly different in both scope and size today, from when I was a part of them, but the foundations of success were laid early on in the journey with the far-sighted vision of the top managements of both companies who were prescient in their identifying an opportunity in a blue ocean for setting up winning propositions.
This was followed up by meticulous attention to the Segmentation, Targeting, and Positioning (STP) process, which is the bedrock of marketing strategy, and by getting the value proposition and 7Ps right. These are clear examples of classical marketing theories working in practice and it would do well to the newcomers in the service industry to simply emulate and save themselves the herculean time and effort involved in needlessly reinventing the wheel!
(The writer is Professor of Marketing at BIMTECH, Greater Noida.)