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

a) The key characteristics of Services are

Service is always On-demand, Service is demanded and consumption happens during providing of service.

Service is intangible. it cannot be seen or touched or felt

Service is inseparable; it cannot be separated from the person providing the service

Service is variable; quality of service varies from one provider to another

B) Marketing of service is different from Marketing of product

A gym service cannot be owned transferred to another party. A sports shoe can be owned and used by multiple person, but a Gym service can be experienced by the person consuming the service. Hence Word of mouth becomes extremely important for Services.

A Sports shoe can be marketed basis its features, value. A Gym can be marketed basis the service it provides and Relationship is the most important aspect in Service marketing. Only then customers will come to avail the service.

Products can be returned. A sports shoe can be returned. Services once consumed cannot be returned.

Since a sports shoe is tangible it is easy to promote a sports shoe using its features. A Gym service is not tangible, hence cannot be promoted easily.

C)

The three levels of the product are

Core value - The basic need of the customer which is getting fulfilled through buying the product or availing the service

Actual product - The product or service which customer is actually buying which includes the product, packaging, price and everything else. The need is transformed into the actual product.

Augmented product: This is the complete solution to the customer need and additional features or benefits which customer receives.

D)

Weight lifting gym

Core value - Increasing fitness

Actual product - A weight lifting gym where customer can lift weights and increase his stamina

Augmented product - Customer can strengthen his muscles and at the same time do multiple other exercises

Augmented product -