“It can be argued that marketing of intangible service sector products, require a fundamentally different approach to that of other tangible / non service sectors products”. Critically discuss with reference to real life examples of those factors that need to be addressed by management when marketing leisure sector consumables?
The aim of this report is to identify and analyse the marketing sectors of the intangible service products and the different approaches from other tangible or non service products. A number of examples and critical discussion in each case will be given. The marketing of the leisure intangible service products require a different approach from the physical products as there can be identified some common general characteristics, different design and implementation, with some additional challenges into the marketing mix applicable in the leisure industry. A greater research will be done in the increasing commodification of leisure, the role of the segmentation, and the role of the leisure sector. An analysis of the leisure market behaviour will be done giving examples between the differences of services and products and factors associated with the perishability. The services products are perishable because in general they are performed at a particular time and are consumed as they are produced.
An increased focus, has been noticed, in the examination of some special aspects of services and on how can differentiate from the physical products. The leisure services products are facing a greater global market and a big competition on the most developed economic regions. Many people participate in the consumption of the services products, and the leisure industry itself has become a commodity. The sectors of the leisure industry has been divided in a way that can satisfy, as many people as possible, with different interests and social groups when at the same it time is offering quality on its services.
2.0 The increasing commodification of leisure.
The leisure industry operates into a political, economic, geographical, and cultural framework, in which businesses are trying to attract its customers into a continuously changing and competitive environment. In many regions, economic stability has been developed and people have been seen an improvement in the quality of their life’s, in economic terms. In these regions has been seen an increasingly demand for the consumption of the services products provided by the leisure industry.
Nowadays, the technological revolution has a greater impact into the leisure industry. People with different interests, attitudes and ideas has been seen a greater variety in the way that they entertain themselves. That the point where businesses are trying to meet the specific needs of people with different interests. Leisure in reality is a complex activity, but in economic terms many organizations has been seen leisure as a great opportunity to increase their brands. This can be achieved through systematically advertisement (TV, radio, newspapers, etc) and the creation of a successful image.
Image is an important sector where companies have to develop an environment where the customers must feel excited and to satisfy their own needs during the consumption. People, today, seem to have more money to spend, and they seem to spend more time into their own entertainment on any kind of their interests. Philip Kotler, (marketing management, p.475-476) marked that Gilbert Trigano opened the first ‘club med’ village in Greece in 1955, and today ‘club med’ operates more than 114 villages in 36 countries. The ‘club med’ has been creating an environment able to provide, in a group of people, a vacation that removes the minds of the people from the every day pressures. There everything is offering into a package, so people have fewer decisions to take and less to worry. They can dress casually, go out, meet and entertain with other people when they enjoy beautiful warm weather. This is an example of how businesses increase their own brands when acting locally and thinking globally.
Many times corporations on the other hand just increasing their brands from one country to another and does not have any respect for the environment and the culture that has been created in particular regions and countries around the world. So, we can see corporations like Mc Donald’s and coca cola to invade with a different approach into the leisure sector. Basketball is a wonderful game and millions of people love it in countries all around the world, of course is a game widely accepted in USA, where Mc Donald’s and coca cola has been created a culture associated the sport with products. They have the power to manipulate the people minds through systematically advertisements in TV, in radio, and within the stadiums. Many times the true spirit of entertainment can be lost within the leisure industry from the factors outside the industry itself. Leisure is a necessity for all the people in every country, and as many countries becoming more and more multinational and more people exchanging ideas with respects for the culture and the tradition of the others, so the leisure organizations should have a truly face when they have to satisfy the people needs.
3.0 The role of segmentation.
F. Brassington and S.Pettitt (Principles of marketing, p.169) identified that all this forms the basis of the concept of segmentation, first developed by Smith (1957). Segmentation can be viewed as the art of discerning and defining meaningful differences between groups of customers to form the foundations of a more focused marketing effort.
The role of the segmentation today is even more today is even more important, especially in the leisure markets where people must satisfy their own needs. Leisure groups have been dividing their own target markets in a way that they can attract as many people as possible. The division of the markets into smaller segments enable managers and marketers to enjoy the benefits from the direct contact and communication with each specific group of people. This can help the managers to identify the customer needs, to improve companies services products, and to find solutions of the problems to the right moment.
Segmentation is a complex and difficult activity to be achieved, requires process of the information, creativity, innovation, and implementation in a way that mismanagement and fail will be avoid. Services products will never be in stock and be sold later. The direct contact with the customers it is important, for the understanding of their needs and wants. Many times, the customers prefer to consume a services product because they feel close with the sales person and a bridge of trust has been achieved. The segmentation is an important activity today, an important tool of the leisure organizations to increase their share in the increasingly massive leisure markets.
4.0 The nature of the leisure sector.
The leisure sector is including a greater variety and provision of different kind of services. The service product in the leisure market is an intangible product from its own nature. The leisure industry has an important role in the global economy and it is expected to become even more important in the years to come. Leisure has a greater impact as well in terms of the social, cultural, and environmental change in many regions in our planet. More people today are working into the industry, and more people and more people consume the services products. Technology is an essential factor of the leisure sector and here is coming the importance of the successful implementation of the technological change. Leisure organizations through technological change can get into the business success and to achieve the ability to gain and retain competitive advantages into the local and global markets. A characteristic example here can be seen in the multiplex cinemas which are following revolutionary changes the recent years. In this industry have been noticed successful implementations on the provision of quality services for the customers. The multiplex cinemas today are using last technological materials and the industry itself is successfully and still growing in the UK, the most of Europe and many countries around the world.
5.0 Analysis of the leisure market behaviour.
The leisure market behaviour is complex because of its own intangibility and because is including a greater variety of leisure service products that sharing some common characteristics but differentiate from physical products. The quality of the services is an important factor but difficult to implement from managers in terms of the definition and the measurement of the quality. So, at this point, is coming the importance of the interaction between the customers and the employees. It is important for the leisure industries that the customers participate in the creation and delivery of the service product with the cooperation of the employees. The companies are focusing their efforts to increase the product service quality, the productivity and the continuously training of their own staff. The employees must have the ability to create good relations with customers, to meet their expectations, to make sure that the service will be delivered on the right time, and to consider the customer expectations in relation with the image and the standards of the organization.
The leisure organizations are attempting to provide a service or a range of services that can be appeal to the maximum number of people or divide the market into small group of people and to concentrate on how to satisfy each specific group. The customer satisfaction is very important in the leisure industry, the satisfied customer can be used as a promotional tool for the organization. Customers, very often, are expressing their satisfaction into their social environment and can attract new customers in the organization, improving the image into higher levels.
6.0 The difference between services and products.
There can be found a lot of differences between the services and the products, and mainly differ in the way that produced and consumed. The tangibility, as a start, allows industries to produce their products and to sell them to their customers. The manufacturers are able to reduce the cost of every product with massive productivity. They can sell later their products into the markets anytime they like. The services are tangible, the purchase is happening before the production and the consumption during the production. The services can not be produced on massive scale because we can not stock a theatre or a football stadium, like we do on clothes, computers, or cars. The differences can be seen in terms of perish ability, products like musical instruments can produced, stored and the customers can go to purchase them when they like. The services like football matches can not be stored and if seats on a football match at Reebok Stadium are not sold, they can not sold later on time.
In the most of the services, the quality is something that cannot be determined before the purchase and consume of the product. May be many times that some common characteristics between services and products can be seen. The concepts and the principles can be applied from one sector to another, but the techniques that have been already used in the one sector can not just be transferred direct and without any change to the other sector.
7.0 Factors associated with the perish ability.
Perish ability is one of the most important characteristics within the services industry, and in terms of every day life means that a service can not be in stock and be sold later , like a manufacturing product . In Manchester is taking place a very big event which is known as 2002 commonwealth games. The organisation which is responsible for the successful operation of the games must achieve to sell as many tickets as possible before and during the games. This specific organisation knows very well that all the tickets for the opening day, in the new Olympic stadium, will be sold and the demand for available seats will be greater than the supply. This is a factor of perish ability and the potential increase of revenue has been lost because of the fixed capacity that this stadium has. But in the other way, suppose that the available tickets are 60.000 but only 35.000 have been sold, that means, in the terms of the organisation that the revenue of the 25.000 unsold tickets has been lost and will not be possible for the organisation to sell those tickets in the future.
The services sector is becoming more and more important in the global economy in the last 30 years. The information technology, the computer revolution and the massive improvement of the telecommunication industry plays an important role here . In terms of leisure, more and more services are developing and will be developed in the future. Nowadays, people are working more hours than fifty years ago , they have more money to spend for their own entertainment and they have more facilities that makes them able to travel around the world .
The leisure industry is responsible for many cultural and social changes in many societies around the world. The leisure industry should be concern the moral issues around every society, in the future.