1.0 Commercial Sector Leisure
Commercial sector leisure is made up of an array of different businesses ranging from the small locally run company to large multinational corporations (See Fig. 1). In general the key objective for the private sector is profit. Torkildsen (1999, p.317) suggests that the commercial provider is literally ‘in it for the money’. They do not
have an interest in leisure itself but only in leisure as a source of profit. Managers of private organisations must attempt to ensure that their product is superior to that of competitors and keep up with the changing trends in leisure as they can fail if they do not attract enough custom. The types of leisure the commercial sector provides to the public varies (See Fig. 2), therefore this sector takes up a large amount of peoples disposable income (Torkildsen, 1999).
2.0 Services versus Products
The problem with marketing for leisure is the product itself. The product that leisure deals with is a service product that bears explicit characteristics which set it apart from general goods on the market (See fig. 3).
‘Services are by nature intangible’ (Holloway and Plant, 1988, p. 14). It is not possible to taste, hear, see, smell or experience the service before the purchase, therefore, it cannot be assessed or examined for integrity (Holloway and Plant 1988, Leadley 1992, Horner and Swarbrooke 1996, Cooper et al, 1998, Palmer 1998 and Torkildsen 1999). Conversely, products can be touched and felt, if you don’t like a product or it is not up to standard you can take the product back and exchange it for something else. Levitt (1972), however questions this notion arguing that even goods have strong elements of intangibility just like services.
Shampoos and pizzas for example cannot be tasted or tested before purchase. Nevertheless, this barrier can be overcome by giving out free samples or over the counter tasting, however, for services this usually results in a false situation. Take the ‘try before you buy’ provision which many health and fitness clubs promote. It is not a real situation, the organisation knows who you are and will put all their efforts into making that day which you attend the best. This can result in dissatisfaction when the customer has signed on the dotted line and then realise that the experience is different as staff are not as bothered as previously.
When marketing services and goods marketers tend to go in different directions, the marketers of goods seek to add intangible elements to their product, L’Oreal for example provide a telephone help line as do Whiskers cat food. While marketers of services look to add tangibility to their product (Palmer, 1998). Fig. 4 illustrates how management can attempt to reduce intangibility through marketing.
One major problem with services and leisure in particular are that they cannot be
stored. A television not sold today can be sold tomorrow at the same or a reduced price or stored away, therefore the only significant cost will be storage. By contrast a cinema seat which is not sold at the time of screening is lost forever. The problem that private facilities face is the fact that demand for their facilities or business is not a continuous, it will vary from day to day, weekends and seasons, for example fitness clubs usually find that membership increases in the New Year and the demand for hotels amplifies at weekends. Palmer (1998) suggests that management need to pay attention to demand patterns and use promotion as a tool to tackle the fluctuation of demand. While Holloway and Plant (1988) recommend the use of pricing strategies to help spread custom by offering reductions during the low periods of demand.
The consumption of the leisure product is generally inseparable from the place of production. The producer and consumer must interact, for example if one stays at a hotel, the customer will meet the receptionist to get the room keys, if one goes to a restaurant a staff member will take them to their seats and cook the meal, these are all elements of the product. If their is an advertisement on the television for a product someone decides they would like one, the service received from the place where the product is bought would possibly not dissuade one from purchase as the purchase decision has already been made before entering the store.
However, if this happened in a restaurant the reaction would be different, regardless of how good the food was or how beautiful the furnishings were, service is such an essential part of the product that it would be unlikely that a purchase would take place (Holloway and Plant, 1988). Palmer (1998) and Lovelock (1996) suggest that organisations should attempt to manage service encounters by ensuring there are service delivery systems in place.
3.0 Service quality
The intangible, perishable and inseparable nature of services makes it very hard to assess the quality within the service (Zeithaml and Bitner, 1996). A quality service is offered so customers develop a positive image of the service (Mok et al, 2001) and will satisfy the customers needs (Morgan, 1996). In addition the use of a quality service can create a closer bond with customers thus establishing a more defensible position in the market (Hooley et al, 1998). The perception of a quality service can differ from person to person, the unpredictability of a service will be greatly affected by the performance of the staff.
Furthermore, the moods and preoccupations of the customer can significantly influence the perception of a quality service (Morgan, 1996). Kotler, et al, (2001, p. 551), states there are ten areas that affect perceived service quality, which are, access, credibility, knowledge, reliability, security, competence, communication, courtesy, responsiveness and tangibles. The service provider needs to identify the expectations of target customers and exceed their expectations. Appendix 1 demonstrates Zeithaml et al, (1990) and Gronroos’s (1994) observation of the quality gap between customer expectations and perceptions.
To ensure a quality service, private organisations in particular should implement a service quality system, for example, ISO 9002. In addition Investors in People status could be obtained to ensure the continuous development of staff and management regarding all areas of service quality, as ‘there is concrete evidence that satisfied employees make for satisfied customers and satisfied customers in turn reinforce employees sense of satisfaction’ (Zeithaml and Bitner, 1996, p. 304). This could be marketed as part of the product to lessen the level of perceived risk for customers and to ease the evaluating process and shift favour for your organisation.
4.0 Product differentiation
The utilisation of service quality will allow the product to be unique from its competitors. Focusing on customer services is an effective source of product differentiation (Bowen and Basch, 1994), Holloway and Robinson (1995) propose that this is an essential role of the marketer. The private sector is continuously searching for ways in which to differentiate its product, this can be done in various ways (See Fig. 5). David Lloyd’s health and fitness club’s Unique Selling Proposition (USP) is the elite image which membership offers, thus allowing premium pricing strategies to be enforced. Thompson’s holidays USP is reliability and customer satisfaction as they stress the careful checking of their resorts and hotels (Holloway and Robinson, 1995).
The powerfulness of differentiation is evident from Nike Air Jordan trainers. It was built upon the USP of the air cells in the heels of the trainers and used the Unique Emotional Proposition (ESP) by being associated with top athletes. This combination won the minds of teenagers, many through their parent’s wallets (Hooley et al, 1998). Hooley et al (1998) stresses the importance of unique products not only to generate sales but to create competition. However, what must be taken into account is the fact that the unique product will not stay unique forever, therefore, organisations which want to stay ahead of the market and maintain a defensible position must be prepared and ready to be innovative and continually look for new ways of differentiating.
5.0 Product life cycle
The life cycle of a product passes through four stages during its life span (See fig. 6). The four stages are the introduction, growth, maturity and decline. As the product is introduced to the market an ‘S’ shaped life cycle curve shows a slow growth in sales and profit, if the product is successful it will enter the growth or acceptance stage and then mature where sales and profit peak. During this time the decision needs to be made whether the product should be developed or re-launched to meet the markets needs (Leadley, 1994). Finally the product enters decline when profit and sales decrease, the organisations must decide whether to discontinue, maintain or harvest the product (Horner and Swarbrooke, 1996 and Kotler et al, 2001).
The product life cycle has many critics, for example Tellis and Crawford (1981), who suggest that there are at least seventeen variants in the shape of the life cycle curve, a novelty product for example Rubik’s cube or BMX will show a shape representing the rapid growth of the product followed by a similar swift decline. Conversely, products can sell at saturation levels for long periods for example, Corn flakes or Oxo (Holloway and Robinson, 1995). What private organisations should be aware of is that they can change the course of the lifecycle if they take a proactive approach to marketing (Horner and Swarbrooke, 1996).
6.0 Social trends
Having the ability to forecast and plan for future social trends in the market is essential for private leisure organisations due to the unpredictability and rapid development of the leisure industry. Social trends in the market generally relate to age, gender, income, occupation, education, however, from a leisure perspective the whole of the social climate must be considered, for example the attitudes and values of people as they are seen as enabling or inhabiting factors which contribute to leisure choice (Torkildsen, 1999). Leisure researchers and social scientists provide information relating to trends in the leisure area. Fig. 7, demonstrates the ways in which leisure managers can use this information. Most large private leisure organisations will have the capital to acquire an expert to forecast the trends in the market, Palmer (1998) suggest that this is an essential tool for marketers as this is crucial information which is needed to prepare a strategic marketing plan.