Identify and outline the distinguishing characteristics of services compared to physical goods by comparing and contrasting the service offerings of your selected company with those of a number of physical goods companies The Service Sector to be analysed is Entertainment. The selected Company is Vue Entertainment Ltd (Vue). The Company overview includes factors such as location, reason d’aitre, market size and share, typical consumers and its competition. The overview is in the appendix on page 5. “A service is an intangible product involving a deed, a performance or an effort that cannot be physically processed” (Berry. L, Parasuraman. A. 1993). The Service Sector contains many industries switching from producing to performing. 70.2% of the UKs GDP and 66% of workforce in the European Community (147m people) are employed within the UK service sector. (www.statistics.gov.uk) The main characteristics of services are intangible meaning that they cannot be held like physical entities. At Vue the service offered is one of viewing film within a theatre experience (which cannot be owned or touched). Although the theatre itself is tangible the atmosphere, enjoyment and the interactions with other customers are intangible. This differs from a tangible product such as lipstick, because quality and sale can be determined by colour/size/texture. (Palmer, 2008) The intangibility of the cinema visit means that consumers make an assessment of the service quality after exiting the cinema and analysing the total experience together retrospectively. This principle contrasts to physical products such as those of the shoe retailers Ugg Australia Ltd. The customer can recognise the brand which links directly to good quality materials and premium craftsmanship stated by the international retailer, Very (2013). This instantly persuades consumers that the product is ‘luxurious’ and worth the money. The impact of the product is how it feels and fits and is the desired style. The marketing aspects of services can have a number of complications, because cinemas offer similar services, there can be no protection offered by patents. As Vue is primarily a service which shows the latest films, it is difficult for consumers to differentiate between them and their competitors. Such decisions are often determined through the analysis of physical tangible goods, for example, comfort of the seating and the price. This process puts strain on the promotional aspects of Vue as the business relies on the emphasis of brand recognition and quality. This action is similar to product selection because the deciding factor when purchasing is based upon ultimate perception. The Supermarket Aldi is represented in their marketing as selling high quality products at low prices which encourages consumers to use Aldi in the belief they get better value for money. (Palmer, 2008) The Vue experience is subjectively evaluated by individual preference making each visit resulting in difficulty with pre-activity marketing by Vue. This situation contrasts with product selection at UGG ltd for example, where consumer’s awareness of quality/standards together with fit sampling is pre-requisite to purchase. Vue overcomes this difficulty with marketing and pre sampling by focusing on customer experience and offering brand loyalty. Vue rewards loyal customers by offering a point collecting scheme with future discounts and pre-booking advantages. This principle is also used by companies such as Boots PLC to eliminate competition on products of a similar nature which could be purchased elsewhere. Production/consumption of a service often takes place simultaneously, so a high degree of customer involvement is typically needed to create a successful exchange. Because customers play key roles in creating service outcomes, the expectations and attitudes they bring to the service encounter can positively or negatively affect delivery of that service. Customers can enhance or diminish...
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