Goods are physical products, such as handbags, cars, and laptops. Services are intangible products, such as education, haircuts, and train rides. The marketing of goods (the 4Ps covered in Unit 4.5) varies from the marketing of services (which have an addition 3 Ps). The marketing of goods involves the traditional marketing mix (product, price, promotion and place). The marketing of services, developed by Bernard H. Booms and Mary J. Bitner (1981), includes three additional elements to the marketing mix: people, process and physical evidence.

• People – the importance of employee-customer relationships in the marketing of a service.
• Processes – the importance of delivery processes in the marketing of a service.
• Physical evidence – the importance of tangible physical evidence in the marketing of a service.

ATL Activity - The extended marketing mix

Watch this short video for an overview of the extended marketing mix:

The learning outcomes (or assessment objectives) for this section of the Business Management syllabus are:

• People - The importance of employee-customer relationships in marketing a service and cultural variation in  these relationships (AO3)
• Processes - The importance of delivery processes in marketing mix a service and changes in these processes (AO3)
• Physical evidence - The importance of tangible physical evidence in marketing a service (AO3)
• The seven Ps model in a service based market (AO2).