The Case Study Analysis Of AJ Hackett Bungy: Understanding Service Marketing Theories

Choose one of provided case study analysis aims to develop students understanding and application of a theories of service marketing. They will demonstrate an understanding of the unique nature of service marketing and how it differs from product marketing. The analysis of caste study allow students to apply their knowledge through exploration of specific technique utilised by identifiable companies.

Bungy Jumping became a popular adventure sport when a New Zealander AJ Hackett saw a video by Oxford club’s jump; he not only wanted to try the sport to have an adrenalin rush but was quick to see it as a commercial opportunity (Cater, 2006). In the year 1986 AJ and his fellow speed skier teamed up together with a bunch of scientist to develop techniques to ensure the safety of the adventure enthusiasts (Cloke & Perkins, 1998). It was the year 1987 when AJ experimented with the newly created Bungy jumping chords and jumped from the iconic landmarks, the sport which gives the extreme adrenalin rush- Bungy Jumping was born. It was just a matter of time that Queenstown had created its place in the world’s adventure tourism map as the” Home of Bungy” (Bell & Lyall, 2002).

Target market is the group of people towards whom the marketing and promotional activities of the company are directed, as they are the group of people who are most likely to consume these services or product (Ferguson & Veer, 2015). In case of AJ Hackett Bungy, it was initially believed that more and more western tourist will be inclined towards the sport, but as time passed, it was the Asian customers who took over. Bungy Jumpy is not constrained to any cultural barrier, and the high level of safety makes the adventure sport susceptible to people of all ages. Keeping the age consideration in mind, the target for Bungy Jumping is people in the age range of 10-45, irrespective of the gender (Cranefield & Prusak, 2016).

The purpose of the report here is to understand the marketing condition and the positioning of the business and the key aspects of the case study with respect to the service marketing principles. It would also be interesting to analyse the best practices as reflected in the case study of Bungy jumping in relation to the theories of service marketing. A set of recommendation will be used at the end to improve the further development of the organization

Marketing Conditions and Positioning

Market positioning is the ability to influence the perception of the consumer towards a brand or a product relative to the competitors offering. The prime objective of market positioning is to create a differentiation in the minds of the consumers. Initial condition related to Bungy Jumping was considered to be more of a fad, than as a sustainable activity of tourism. However, this perception was destroyed in less than a year (McKay, 2014).

Bungy Jumping is seen as an adventurer’s dreams, which are both a physically jarring and a mentally stressful activity. Henry van Asch, the co-founder believes that the sport is more of a personal challenge than being a physical one. Over the years due to the increasing demand of the sport, AJ Hackett expanded his business for tourist and corporate clients. At present AJ Hackett has operations in Australia, China, France, Germany, Singapore and each location offers a basic menu of Bungy Jumps as well the local specialists (Lovelock & Patterson, 2015).

Price for Bungy jumping varies by location and the activity with combo deals, discounts and promotions are offered to the corporate guest to give an impetus to the adventure sport. The market condition for the company which operates on high adrenalin rush is to find new ways to challenge the gravity and people. AJ Hackett believes that there is more to stretch in the industry and heights and he aims to develop sites around the world for the people who want the “Soft Adventure” (Laviolette, 2016).

Safety and overcoming the fears of the customers- Bungy Jumping is a high adrenalin sport which is definitely not for the weaker hearts. Although the company ensures the safety of its consumer, there is still a high risk involved with the adventure activity. Jumping off the cliff or other placed with heights ranging in 100s of metre is definitely not an easy task at hand. Thus, it takes lot of convincing from the jump masters and assurance to make the person enjoy the rush the activity gives them.

RATER model is one of the important frameworks in service marketing which helps in understanding and managing the consumer expectation. The understanding of the RATER model can be understood as:

Reliability-The organization has to ensure that it delivers reliable services as promised and with consistency on time (Lusch & Vargo, 2014).

Assurance- This is related to the wisdom and knowledge the employee part to the customers and makes them confident in the offering of the organization and gives them the assurance of well-being (WIrtz & Lovelock, 2016).

Key Aspects of the Case Study

Tangible-Services are highly intangible in nature, thus the physical appearance of the goods and devices is the measure of tangibility (Gummersson, 2014).

Empathy- Comprehending the sentiments and feeling of the consumers in addressing their apprehension in trying to test the product and services of the company.

Responsiveness- It is related with the willingness of the employees to help the customers; it shows how fast the company is in responding to the query of the customers.

(Source: Mattson & Chadee, 2015).

Hence, in perspective of overcoming the fear of the customer and ensuring their safety AJ Hackett has to ensure that its employees practice Assurance and empathy in their services. Assurance of their safety and empathy towards addressing their fears will help the company in becoming a good service organization (Kushwaha & Agarwal, 2015).

Meeting the expectations of the customers- The current challenge for AJ Hackett is to identify new avenues to infuse adrenalin rush in the sport and give more to the customers. The company which has expanded its business in countries like France, Singapore, Russia, and Germany is looking for ways to challenge the gravity and people, at the same time ensure the safety of the people.

This is a key aspect as reflected in the case study, and currently a source of concern for AJ Hackett, in order to do so, he has to turn up and establish his organization as a highly reliable player in the industry. Reliability in the RATER model implies that the organization is able to deliver challenging activities to its consumers reputedly, without even failing once. Thus, AJ Hackett has to use the service element of Reliability and market its position as a reliable Bungy Jumping provider. He can infuse Tangibility in its service offering by ensuring a high degree of maintenance of its jumping ropes. Tangibility in the ropes would give the consumers high confidence in the offering of AJ Hackett.

(Source: Gronroos, 2016)

Role of Jumpmasters-Jumpmaster are the people who have a very important role to play in the adventure activity. These are the people who walk jumpers to the edge and talk them through the process; they don’t push them or anything, and let the decision to be taken by the jumpers. They are thus, the second most important component in the extreme adventure sport.

This aspect of the case study is a reflection of the element of service marketing. People have a very important role to play in service marketing. People are the reflection of the organization and consumers perceive the organization through these people. People have to have the ability to build a connection with the jumpers and help them in experiencing the extreme adrenalin rush offered by the Bungy Jumping activity (Barile & Saviano, 2015).

Increasing consumers from the Asian Markets- The extreme sport which was originated way back in 1987 was expected to have more of western tourist, however as time passed by, the activity saw more of Asian tourist in comparison to Western tourists. This shows that the Asian consumers are more inclined towards adventure sport of Bungee Jumping.

In this case, Nature and determinants of customer expectation of service model can be use and the gap has to be bridged between the customer expectations and service delivery gap. AJ Hackett has to understand the demographics of the jumpers coming for the sport, based on the demographic and cultural understanding he has to create services better accustomed to those customers.

The case study of AJ Hackett, Bungy Jumping is focussed on how the adventure activity took shape of commercially viable model in the late 1980s. Some of the best practices done by the organization which clearly demonstrate the usage of service marketing theory are:

Developing a Bungy Code of Practise- AJ Hackett was ensured that safety was the prerequisite of the business activity. He was always careful in ensuring safety of its jumpers, and in a bid to take it further he developed a  code of practice in consultation with adventure, construction and tourism stakeholders to bring industry standards into the safety. This is a reflection of the company’s ability to meet the expectation of the consumers of safety; AJ Hackett has ensured the same with setting up of Industry standard.

Competitive Prices- Pricing in adventure sport is a very crucial element. AJ Hackett has made a note of the pricing by keeping the price very competitive and varies it in accordance of the location and the type of activity. He offers corporate discount and promotional activities to engage more tourists in the activity, thus increasing his revenue and also the footfall. AJ Hackett has kept combo pricing for the big time adventure enthusiasts.

This shows that AJ Hackett has ensured that the pricing element in the marketing mix has been given special attention, and people do not miss out on the opportunity of the adventure sport.

Quality of Jumpmasters-Bungy Jumping is an extreme sport and it is required to overcome mental, physical and personal challenges to participate in the activity. The Jumpmasters have an important role to play here as they are the key people who build confidence in the jumpers and help them to experience the rush given by Bungee Jumping. The company employees adventure enthusiasts who are not only fond of the activity, but also have a high degree of responsibility towards the Jumpers. They make sure that the jumpers are confident, comfortable, have listened to the instruction and are ready to experience one of the greatest adventures of all times.

This practise shows that AJ Hackett has given special attention to the People element in its marketing mix and hires the best person suitable for the job. He understands the importance of people in the service business and thereby makes the most of it by finding the suitable guy and trains them in becoming efficient Jumpmasters.

AJ Hackett has been doing tremendously well since its inception in the year 1987; however, there are still certain areas of focus for the company, which can help the company in building a strong market and ensuring the safety of its jumpers.

Promotion of the sport-Promotion is the key element in the success of any business activity, as it not only helps in getting the attention of the right set of consumers, but it also builds a good brand awareness which can be further leveraged by the company. At AJ Hackett, the target market is people in the age group of 10-45, this target group is mostly on the go, thus using the contemporary tools of marketing such as social media and mobile marketing would help in drawing more consumers and sport enthusiasts.

New Avenues of Business- It is seen that the business is flourishing and AJ Hackett wants to open more outlets to provide soft adventure to its customers. Thus, Place in the marketing mix has a very important role to play here. AJ Hackett has to look for more venues in emerging economies of Asia to give an impetus to its business aspirations.

Focus on the Physical Evidence- In services, tangibility is a rare phenomenon, thus it is very important for the business organization to encompass certain elements of tangibility through physical evidence. The company can ensure that its bungy jumping ropes are well maintained and have the logo of the company, the uniform of the Jump Masters are neat, with all the safety features and a neat classy logo on them. For large number of corporate bookings the company can offer them some memento as a token for their spirit in performing the activity, which would also be a good physical evidence for the company. More physical evidence implies more tangibility in the services of the organization, which would add reliability to the services of AJ Hacket

References

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