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1. Introduction

This report will focus on the application of marketing mix model and service characteristics on the National Express, the market leader in bus and coach transport market within the UK. The traditional marketing mix was mostly used in manufacturing sector, with little influence on the service sector. However, as the service organisations are getting more influential in the world of business, the characteristics of services have become more recognised. The National Express was privatised in 1990s and expanded its network all over the UK and part of the Europe. The main services National Express provides including buses, coaches, and trains.

Firstly, this report will examine the 7 Ps marketing mix and the 5 Service Marketing Characteristics in related to National Express’s service marketing. Subsequently, Magrath’s article will be summarised and discussed toward the possible improvements for National Express, based on the findings. Furthermore, this report will examine the service marketing issues within the transportation sector.

2.1 The Marketing Mix Model
The concept of marketing mix model was firstly introduced by Borden (1984) and 7P’s model was introduced by Magrath (1986). It is well accepted marketing model and forms the core of all marketing planning and activities. The use of marketing mix model is a useful decision making tool that focus on the targeted market, as well as consider the potential influences of the external environment of the organisation. It enables the organisation to utilise its marketing resource in effective manner, it also facilitates organisation’s strategic planning, and implementation.

Product
The main products provided by National Express are varied, including regulate bus, coach and train services, as well as being the transport provider for some major events in the UK.

From service characteristic perspective, the transport operator’s service market is mixed with tangible and intangible components. For example, the food and drink provided on the long distance coach service have key tangible attributes, but the attendant’s service is intangible. The facilities of National Express’s transportations including the seats, luggage racks, and toilets are tangible element, while the driver’s service is considered as intangible element, as well as the cleaners’ work that ensures the cleanliness and tidiness of the journey.

Price
Price is the amount of money charged by the organisation in exchange of the provision of products or services. National Express’s pricing policy is unique. It is basically follow the price differentiation strategy, which charge relatively low price for customers who booked early and charge relatively high price for late comers. This pricing strategy allows National Express to utilise the spare capacity in maximum extent and ensure minimum percentage of empty seats.

National Express’s online booking system applies a ‘flotation’ pricing policy. The price of coach ticket, for example, is changing over time, normally every 30 minutes. It can be argued that it encourage customers to revisit the website in order for them to get the best possible price, therefore it generates unexpected marketing effect with relatively low advertising expense.

In addition, National Express charges higher price for transporting during high demand period, such as weekend and holiday season, than the low demand period. It can be argued that this pricing strategy can be used to help spreading demand (Holloway, 2004). Therefore, customers who have the option to travel at anytime will be driven toward to the low demand season. It helps National Express to serve potentially larger group of customer, and boosts the transporting utilisation rate in low demand season.

Place
In general marketing theory, place refers to the point of sale, the location where the product or service is delivered to the customer. It refers to the large number of destinations in which National Express operating, and it is one of the most important factors to determine the competitiveness of the organisation. The vast network of destination within UK has successfully contributed to National Express’s strong performance in the market.

Promotion
Promotion is mainly focus on the effective communication between National Express and the market. It is consisting of several elements: advertising, sales promotion, public relations and personal selling. The recent technological development allows National Express to facilitate modern information system and communications technology, such as highly interactive website, friendly online booking system, popular search engine results, and customer knowledge management.

National Express uses traditional mass media advertising to increase expose to the market. Meanwhile, a more modern promotion technique is adopted for a more specific advertising target via Email and website. The most significant advantage of E-marketing approach is the cost-effective side, comparing to the traditional ways of promotion.

2.2 The 5 Service Marketing characteristics
Services can be defined as all economic activities whose output are not physical product but are consumable as it is produced and ‘provides added value in forms of convenience, amusement, timeliness, comfort and health’ (Quinn et al, 1987). Generally, service can be distinct from other traditional manufacturing in terms of their key generic characteristics, namely intangibility, inseparability, simultaneity, perishability, and heterogeneity (Bitner et al, 1993). These underlying characteristics differs the service marketing mix from those of product.

Intangibility
National Express mainly provides transportation services from one destination to another destination. These services are intangible, unlike normal products that can be physically contacted, handled, smell, and tasted by customers. In addition, the services provided by National Express can not be returned once the service has been performed, unlike physical product that can be return after unsatisfactory use.

Inseparability
The inseparability of service refers to the simultaneously production and consumption of services. For National Express, customers’ levels of expected services are depended on the facilities of the transport, the driving skill of drivers, and the punctuality of services. This characteristic is especially vital attribute for service organisation such as National Express, where service is always an imperative part. For example, no matter how extraordinarily outstanding are the seating of the coach, the comfort of the journey and convenience of destination, often late services will damage the customer loyalty and branding. It requires higher degree of commitment to perform the service up to certain level in order to render benefits.

Additionally, the customers are also present in the service production and delivery. The inseparability of service makes it very difficult for ‘mass production’. Every customer has unique individual need that requires specific performance of staff services, such different destinations and times. The National Express’s services must be performed for the convenience of customers, not for the economies of National Express.

Simultaneity
The transportation services provided by National Express are consumed by the customers at the same period. Customers receive benefits of National Express’s services as they produced, by transferring customers to their destination safely and punctually.

Perishability
Perishability refers to the inability to stored, saved and resold the services which are ‘time dependent’ and ‘time important’ (Onkvisit and Shaw, 1991). National Express’s transportation service is a typical example of perishability. An empty seat today can not be ‘resold’ after the journey has completed.

Heterogeneity
It is also known as variability in the performance of service, which normally caused by the interaction between the service provider and the customer. None of the National Express’s coach spent exactly same in the very same journey, due to customer’s loading time and traffic condition varies.

3. Implications of 7Ps model to National Express’s service marketing
Magrath (1986) has discussed the importance of 7Ps model for service marketing, compare with traditional 4Ps model. He concluded that the additional market mix elements, namely personnel, physical assets and process ‘are crucial to service success’ (Magrath, 1986). The implications of additional Ps will be discussed below.

Participants/People
It involves ‘all human actors, customers and staffs’ who is responsible for the performance and delivery of service, as well as those who participating in the service that influence customers’ perception. Staffs are the key resource of National Express because staffs usually have high level of direct customer contact due to the inseparability of service market. Hence, it requires the staff to possess certain degree of interpersonal techniques to directly deal with customer. It is also important to put effective quality control process in place, such as customer feedback form, to ensure these contacts are monitored and performed at satisfactory level.

The National Express’s staffs are not only undertaking operational responsibilities, but also taking on marketing responsibilities when exposing to the customers. Therefore, it is crucial to recruit and train staffs and drivers who are competent in both areas of operation and marketing.

Physical evidence
The physical evidence focuses on the importance of the tangible components that facilitate service performance of the organisation. It is also knows as ‘servicescape’ (Booms and Bitner, 1981), which is the environment in which the service organisation and the customer interact with each other.

In traditional marketing mix, the physical evidence of National Express might be limited to the ticket office and drivers, where staffs interact with customers. But in a more modernised service organisation, the website might be accounted for the physical evidence of customers’ interaction. National Express has a great website with clear layout and structure, user friendly panel and booking system, which allows customers to explore and use without difficulties. Customers usually make their first impressions of the organisation by referring to the organisation’s website. Therefore, the design, layout, and functionality of the organisation’s website are an important factor to the success of service marketing.

Process
It refers to the ‘actual procedure, mechanisms and flows of activities through which a service is delivered’ (Zeithaml and Bitner, 1996). For National Express’s customers, they are often exposed to more business processes than in other traditional manufacturing organisations where a customer is only able to reach the end product. This is due the unique inseparability of services. For example, during the journey, customers are able to experience the service quality of the coach, being the outcome of driver’s service performance.

It is crucial that getting the process right in the first place, as well as putting monitoring mechanism in place to ensure the effectiveness of the process used by the customer. Subsequently, it is likely lead to improvement in customer satisfaction and branding. For example, customers might become frustrated with online booking of coach because the minor error is not reported until the end of the booking process, causing customers to start over again with the booking process.

4. Analysis of public transportation market
One of the issues faced by the public transportation sector is the conflict between service availability and efficient economies of scale. The public demanding more route to be provided by the public transportation organisations, including National Express. In other words, product differentiation is the key issue facing the public transportation organisations. Unlike other service providers, transportation involves relatively high level of fixed costs, the costs of new coach and training of drivers for the new routes. Therefore, a tailored service to specific customer’s demand is very unlikely, unless the marginal costs can be offset by the marginal revenue generated by the new service routes.

Another issue is caused by the heterogeneity nature of the public transportation. Customers’ expectation of receiving high quality of transportation service, in terms of comfort, punctuality and service attitude is unlikely to be met. Therefore, standardisation is a good option for public transportation organisation, as many of the service organisations have already adopted. There are several benefits for standardised service marketing. The first benefit would be the cost advantage of standardisation. Another benefit would be the improvement of customer’s perception of the organisation, as well as uncertainty reduction (Meffert, 1998).

5. Conclusion
In conclusion, this report has used National Express, the public transportation company to demonstrate the application of marketing mix model and 5 service marketing characteristics. Traditionally, marketing mix is focus on 4 Ps, based on the manufacturing organisation. Magrath (1986) has expended the marketing mix model with additional 3Ps that are all crucial to the success of service marketing. By looking into the sector in which National Express operating, we can outline the service marketing issues facing by the organisations in that sector.

6.1 References

Bitner M.J., Fisk R.P. and Brown S.W. (1993). ‘'Tracking the Evolution of the Services Marketing Literature”, Journal of Retailing, vol. 69, issue 1, 61 - 103.

Booms, B and Bitner, J, (1981), Marketing Strategies and Organisation Structures for Service Firms, p.36
Borden. N. H. (1984), ‘The Concept of the Marketing Mix’, Journal of Advertising Research, vol.24, issue 4, p7-12

Holloway. J. C. (2004) Marketing for Tourism, Prentice Hall, (4th edition), pp17-18; pp53

Magrath. A. J. (1986), ‘When Marketing Service 4Ps Are Not Enough’, Business Horizons, vol. 29, issue 3, pages 44-50

Meffert. H. (1998), Marketing, 8th edition, Wiesbaden:Gabler

Onkvisit. S. and Shaw. J. J. (1991), ‘Is Service Marketing ‘Really’ Different?’, Journal of Professional Services Marketing, Vol7, 2, pp3-17

Quinn, J.B., Baruch, J.J. and Paquette, P.C. (1987), Technology in services, Scientific American, 257 (6) :50-58.

Zeithaml. V. A. and Bitner. M. J. (1996), ‘Services Marketing’ McGraw-Hill, New York