Zappo's case study

Case Questions :

1. Define the service concept for Zappos.com.

Service companies are different from goods companies. Service companies are characterized by four (4) distinguishing features. These are intangibility, perishability, simultaneity & heterogeneity.

Zappos main business was sales of shoes. Though shoes are identified as goods, Zappos’ activity was only for the sale of the shoes. Zappos provided an internet portal for their customers where they could order for shoes from different manufacturers. Zappos was only responsible to procure them from the respective manufacturers for the ordered shoe of the right brand, size and colour and deliver to their customers.

The four features and how they match with the services provided by Zappos are described below:

Intangibility – The fact that Zappos’ business operations focussed on activities and processes, which was the primary reason for the customer experience. The fact that Zappos was not responsible for the manufacture of the shoes and also the quality of them makes them a services company. A customer could buy the same shoe from another shop, however the services provided by Zappos could neither be transferred or sold to another person can be defined as a service. The products (shoes) were just goods which are used to facilitate the service provided by the company.

Perishability – As compared to good, services cannot be stored in an inventory. This is what makes a service perishable. Whereas the company manufacturing the shoes can manufacture and store the shoe till they receive an order from Zappos and the same is picked against a customer order.

Simultaneity – A service can be provided only when a customer requests for the same and does not exist before that. In the case of Zappos the services that is procurement and the delivery of the shoes can happen only when the customer places an order. This makes the services provided by Zappos to be defined as a simultaneous operation. As