Question

1. Harry McBeefy has been working for a sports shoe manufacturer. However, his passion is weight lifting, and he wants to buy a weight lifting gymnasium business. Harry thinks the two businesses (sports shoes and weight lifting gymnasium) should be very similar as far as marketing is concerned: – "people are people after all", and both industries relate to fitness. As a marketer however, you know that there are fundamental differences between services and goods.

a) Briefly describe the FOUR key characteristics of services to Harry.

b) Give examples from the sports shoe and gym industries to illustrate how the four characteristics of services make the marketing of services very different from physical goods. You know that marketers can use the framework of 'three levels of product' to help with analysis and planning for products and services.

c) Briefly explain each of the three levels.

d) Outline how each level can be applied to a weight lifting gym.

Answer 1

a. The four characteristics of services includes the following

• Intangibility: The services are the intangible products which can’t be experienced by the customers until they are being purchased. Hence Communication is essential while providing services to the customers through which the customer can be provided with adequate information and hence satisfaction
• Inseparability: The customers are having strong expectation about how the services are being provided while making a purchase. Hence ensuring good customer service is essential for better productivity.
• Perishability: Maintenance of the supply and demand is essential. Since the service is perishable, when it is unused at relevant situation it can’t be used at any other stages of the sales.
• Variability: establishment of standard business procedures and service provision is essential for the achievement of customer loyalty.

b. Examples of the four characteristics of services

• Intangibility: The Company Adidas provide adequate product information to the customers so that they can make their purchase decisions easily. The customer can go to its website and can gather the information regarding all its products.
• Inseparability: The adidas provides high quality customer service through the provision of proper response to the customer queries, good information, assistance etc.
• Perishability: The Company Adidas forecasts the customer demands, desire and preferences considering the other factors like seasons, festivals etc and maintain sufficient supply of the products so that the customer can access their products easily.
• Variability: They have standard policies and procedures which make their brand image perfect and hence could gather good customer loyalty.

c. The three levels of the products includes the following

• Core Product: The core product can be considered as the benefit of the product which can be experienced through the use of the product or service. This is intangible.
• Actual Product: The actual product is the physical product which the marketers markets and the customers perceive to buy.
• Augmented product: This is again the intangible part of the product which is purchased is provided along with the product and it adds value to the product.

d. Each level of the product can be applied to the weight lifting gym

• Core Product: The health benefits which can be obtained by the customers through taking membership of the gym can be considered as the core product and can be utilized as the unique selling point for the marketing purpose.
• Actual Product: The equipment and the machineries of the gym, the staff members of the gyms etc can be considered as the actual products.
• Augmented product: These are the customer service and care which the gym practitioners are providing to the customers.