Explain how this case illustrates each of the seven major differences between goods-producing and service providing businesses.3
As per the lecture video 5, Dr Rosen walked through 7 unique characteristics of service providing businesses that differentiates it from a goods producing business
1. Inseparability: Production and consumption occurs simultaneously in a service based industry. In case of Zappos, the customers perform various transactions like product selection, procurement, maintenance, etc. for which Zappos provides the service via its online platform. As the orders increase from the customer, Zappos reaches out to its supply chain to procure more products and thus increases the production.
2. Intangibility: Products or goods are tangible, whereas services are intangible. Products can be put on a shelf whereas services are performances which cannot be touched physically but experienced. Zappos provides a service via its platform for sales of products by providing a WOW experience. Zappos uses a sophisticated system called Genghis which allows the customer service representative on the availability or unavailability of a specific product that a customer is looking for. The customer service representatives then search the websites of its competitors for availability and provides the information to the customer thus servicing the end customer need.
3. Perishability: Products can be non-perishable and can be put on a shelf whereas services are performances which are perishable. Zappos provides customer services online and has to be available as and when needed so capacity and yield management is crucial for Zappos ensuring the customer service representatives are available irrespective of the call volumes.
4. Heterogeneity: Products are homogenous, has the same quality across however services are heterogenous. Zappos is known to tailor its service to the customer. The customer service profession...
