Question

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

The idea of Harry McBeefy to start a business of both sports shoes and weight lifting is a good idea . As a business idea, yes, both sports shoes and weight lifting can be combined and can be taken as a form of new business. Whereas as a marketer, there is a difference between Goods and Services. The fundamental difference between Goods and Services are :

1. Goods are tangible products. They can be felt, touched and seen through our eyes. For example, shoes, t-shirts, car, airplane, toothpaste etc. Whereas Services are intangible products which means these things can't be seen or touched. For example, doctor's service given to a patient, teacher's service given to students etc. You can't see or touch the service but can only feel when received.
2. Since goods are tangible thus transfer of ownership in terms of goods is possible whereas on the other hand, transfer of ownership isn't possible in the case of services.
3. Goods includes exchange of products. One can return or buy the goods as per one's will. On the other hand, Exchange of products is not possible in case of services. Services being an intangible product can't be bought or exchanged like goods can be.
4. Storage of commodities is possible in case of Goods. One can keep the goods in warehouse or storage house and use it as and when required. Whereas, on the other hand, in case of Services storage of commodities is not possible in any case whatsoever. This is because of the reason that goods are produced and manufactured and are also tangible but services are produced and consumed at the same time. Thus storing a service isn't possible.

a) There are many characteristics that define a service. FOUR KEY CHARACTERISTICS OF SERVICES can be described as under :

• Services can't be stored -  Services, as discussed above, can't be stored and thus can be said to be perishable. Which means in our case, if Harry decides to open a gymnasium as a business then if he keeps it closed all day long then will the service be provided to the users? No, it won't. Whereas, if Harry keeps sports shoes in his warehouse and decides to sell it later on, will that be possible? Yes. Harry can store and use the sport shoes for some later period of time whereas in case of Gymnasium that won't be the case.   
• Services are Intangible in nature - All services are intangible in nature which means no one can touch or see it with it's eyes. For example, services provided in a gymnasium can't be seen by the user or can't be touched by the user until it starts working out in the gymnasium. After a period of time, the user will see effects on his/her body and that will be the service given by the gymnasium which he/she will feel only after getting the service. .   
• Services are inseparable - This means that services can not be separated. For example, sports shoes will be manufactured and produced in an industry and later on will be sold in different different markets and branches. But in case of services like gymnasium in this case, it won't be produced or manufactured. Rather it will be directly consumed or used by the users. They are using the service and simultaneously also experiencing whether or not they like it or not.   
• Service providers and services may vary -  In case of services, experience of one user may be different from another. Thus, services can vary from place to place and from person to person. If someone goes to a hospital, one may get a good service while another may not. This also depends on who is giving you a service. Whether or not the service provider is efficient enough or not. Thus, services unlike goods may vary.

b) HOW SPORTS SHOES AND GYMNASIUM MARKETING DIFFERENT FROM EACH OTHER :

Since the core nature of the two is different therefore it is obvious that the marketing strategies or even simple marketing of these two things will be different on a large scale. Let's understand this that, here, sports shoes are the goods and gymnasium is a service.

Firstly, services are intangible. Therefore the marketing of gymnasium can't be done in the same way as for the sports shoes. Marketing of gymnasium may include giving examples to the consumers as to how previous consumers had good effect after going to this particular gym and by performing particular kind of exercises from professional trainers. People will be attracted to the service only when they get good feedback from many other people. One can experience and see the result only after a span of time. Whereas in case of sports shoes, direct selling of shoes will be enough. The customer can know by wearing the shoe whether or not he likes it or not. Sports shoes can be used and touched and felt and thus it's advertisements can be done in order to attract more and more consumers.

Secondly, services can't be stored. A service given by the gymnasium can't be stored for today and be given tomorrow. Services are used and experienced at the same time as and when used. In case of goods, sports shoes can be stored and be sold out as and when required. Thus, goods can be stored but services can't be.

Thirdly, Services given by the gymnasium will vary fro person to person because everyone is different and services don't come in sizes that they will fit in accordingly. Thus some may find the service of gymnasium good while others may not. In case of sports shoes the case will be different because shoes are designed and created as per sizes. So each size will be available for each customer and thus each one feel more or less the same.

Fourthly, services can't be separated in terms of consumption and production. A service in gymnasium will be produced and will be used at the same time by the users. But, for a sport shoe, this will be different because it will be manufactured and produced somewhere else and will be sold somewhere else and later on will be used by the consumer somewhere else. Thus, goods can be separated but services can not be separated.

c) THREE LEVELS OF A PRODUCT :

There are basic 3 levels of a product which is used by the marketing industry to basically analyse their products. The three basic levels of products are as follows ;

1. Core product - These products focus on the advantages of using the particular product. Why and what are the benefits of using the product is explained under core product.

2. Actual product - Actual product talks about the product as it is. It talks about the usage of the product. How to use to the products and certain other instructions are given under this level.

3. Augmented product - This level of product talks about what extra services will you be getting after using this service. This may include free service charge, after sales services etc.

d) 3 LEVELS APPLIED TO A WEIGHT LIFTING GYM :

The 3 levels of products can be applied to a weight lifting gym in following ways.

• In terms of Core product, by using a weight lifting gym can give many advantages to a body builder. The weight lifting gym will help the body builder to increase muscles and gain more mass bu using weight lifting products. The weight lifting equipment will help the body builder to increase the strength of the muscles also.
• As per Actual product, certain directions will be given to the body builder as per his body weight and structure and thus certain weight lifting equipment will be provided to him. Regular exercise will be specified and given instructions as to how to do and what all precautions needs to be taken.
• Augmented products will describe the body builder what all benefits and plans he may avail at the gym center. Certain discounts and various packages will be provided to him and along with it supplements like protein shakes, sports shoes etc can be provided on a discounted price.