Service Marketing Case Study Analysis of Bungy's Beginning

This case study delves into the service marketing strategies employed by AJ Hackett in establishing Bungy Jumping as a commercially viable adventure sport. It examines the marketing conditions, target market (initially Western tourists, later predominantly Asian), and positioning of the business, highlighting its focus on safety and overcoming customer fears. Key aspects analyzed include the application of the RATER model (Reliability, Assurance, Tangibles, Empathy, Responsiveness) in ensuring customer satisfaction and the crucial role of Jumpmasters in building confidence. The study also explores best practices such as developing a Bungy Code of Practice, competitive pricing, and maintaining the quality of Jumpmasters. Recommendations focus on enhancing promotion through social media and exploring new avenues for business growth while maintaining a strong emphasis on safety. Desklib provides access to this and other solved assignments for students.

Running Head: Service marketing
Bungy’s Beginning
Service Marketing
Case Study Analysis

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Table of Content
Background of the Case Study.................................................................................................................................... 2
Marketing Conditions and Positioning.................................................................................................................... 3
Key Aspects of the Case Study.................................................................................................................................... 3
Best Practices or Problems in the case Study....................................................................................................... 5
Recommendation............................................................................................................................................................. 6
References.......................................................................................................................................................................... 8

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Background of the Case Study
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.

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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).
Key Aspects of the Case Study
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.

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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).
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.

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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.

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(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

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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.
Best Practices or Problems in the case Study
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.

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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.
Recommendation
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
Hackett.

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References
Barile, S., & Saviano, M. (2015). A New Systems Perspective in Retail Service Marketing.
In Marketing and Consumer Behavior: Concepts, Methodologies, Tools, and
Applications(pp. 2079-2101). IGI Global.
Bell, C., & Lyall, J. (2002). The accelerated sublime: Thrill-seeking adventure heroes in the
commodified landscape. Tourism: Between place and performance, 21-37.
Cater, C. I. (2006). Playing with risk? Participant perceptions of risk and management
implications in adventure tourism. Tourism management, 27(2), 317-325.
Cloke, P., & Perkins, H. C. (1998). “Cracking the canyon with the awesome foursome”:
representations of adventure tourism in New Zealand. Environment and planning D:
Society and Space, 16(2), 185-218.

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Cranefield, J., & Prusak, L. (2016). Managing your own Knowledge: A Personal Perspective.
In Personal Knowledge Management (pp. 121-136). Routledge.
Ferguson, S., & Veer, E. (2015). 3-2-1 bungy: A typology of performance styles. Annals of Tourism
Research, 55, 61-76.
Gronroos, C. (2016). Service Management and Marketing: Managing the Service Profit Logic. John
Wiley & Sons.
Gummesson, E. (2014). Productivity, quality and relationship marketing in service operations: A
revisit in a new service paradigm. International Journal of Contemporary Hospitality
Management, 26(5), 656-662.
Kushwaha, G. S., & Agrawal, S. R. (2015). An Indian customer surrounding 7P׳ s of service
marketing. Journal of Retailing and Consumer Services, 22, 85-95.
Laviolette, P. (2016). Extreme landscapes of leisure: Not a hap-hazardous sport. Routledge.
Lovelock, C., & Patterson, P. (2015). Services marketing. Pearson Australia.
Lusch, R. F., & Vargo, S. L. (2014). The service-dominant logic of marketing: Dialog, debate, and
directions. Routledge.
Mattsson, J., & Chadee, D. (2015). Customer satisfaction in tourist service encounters.
In Proceedings of the 1995 world marketing congress (pp. 397-397). Springer, Cham.
McKay, T. M. (2014). Locating South Africa within the global adventure tourism industry: the
case of bungee jumping. Bulletin of Geography. Socio-economic Series, 24(24), 161-176.
Wirtz, J., & Lovelock, C. (2016). Services marketing: people, technology, strategy.

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