As the United States has developed over recent decades, the economy has become increasingly service based. This is especially true in the tourism industry as the product being sold is an intangible experience. “Selling” this experience, or opportunity for an experience, is where service marketing takes place. Under service marketing, there are four aspects in which should be managed for in order for the service to appropriately meet the demands of the consumer or participant. I will discuss how a hypothetical Colorado ski area is affected by these aspects of intangibility, inseparability, variability, and perishability affect the company and ski industry every day.
Intangibility in the ski industry presents a particular issue for one simple reason. Skiing is expensive. The initial “sticker shock” dissuades many from even participating in skiing, and has resulted in low introduction rates, and even lower conversion rates into lifelong skiers. Without a trusted source introducing a participant to the sport and lifestyle, intangibility has strong roots in these low participation and conversion rates. In Colorado, a ski rental can cost around $30/day, and a lift ticket as high as $100. Including gas, clothing/gear and food, someone who just want to try out skiing for the first time can easily spend upwards of $200 for a single day. The fact that one cannot experience what skiing is without such a high initial cost is what attributes to these low introduction and conversion rates.
Inseparability is the next aspect that falls under service marketing. Traditionally, goods are produced, transported, bought by consumers, and then consumed after having spent some amount of time being produced. In service marketing, and especially in the tourism industry, the product sold, produced, and consumed at the same time. There is no transit time or shelf life. There is only the moment in which the product is purchased and consumed. In terms of the ski area, the experience is affected by the entire time a participant is on property. The experience being sold starts as soon as the guest sees the first sign for the ski area or first interacts with the parking attendant. While the participant hasn’t actually paid for anything yet, the experience has started and must be managed for.
Variability in relation to the ski industry is dependent on fluctuations in the production of the product. This is partially affected by participation rates, but is also affected by internal and external factors. In terms of the ski industry, external factors include the time of year, snowfall, and temperatures present. Internal factors include snowmaking capabilities, staff training, customer engagement, and speed at which participants are moved around the mountain.
Perishability is the last aspect of service marketing and can significantly improve the financial success of a ski area if properly managed for. Perishability occurs in the tourism industry because of participation levels. Take a ski-in ski-out lodge with 100 rooms for example. Say on average, 85 rooms are used each night. Perishability occurs with the remaining 15 rooms. Each day, there is 100 rooms to sell, no more and no less. If you only sell 85 one night, the remaining 15 do not carry over to the following night. Once the day has ended, that’s it, the 15 rooms remain unsold and the potential profits are not realized.
While this was a quick overview of how intangibility, inseparability, variability, and perishability affect the ski industry, one can see, these four aspects of service marketing creates interesting aspects which must be managed for if this hypothetical ski area is to provide an experience that people are willing to pay for and for the ski industry to attract and retain new participants.