Commercial Applications
CASE STUDY
With the advancement in technology and the goal to scale its business, JK Tyre & Industries has been working on a two-pronged strategy to add 'significant relevance' to its overall business. Along with the mainstream tyres, the Delhi based company is also running a fleet operating management business and a mobility business vertical.
"In the fleet management business, from selling a tyre as a commodity, it becomes a kind of service. We have tied up with 1300 of the 1800 large fleets across India. We provide all the services and the customer pays for the tyre's upfront cost." Anuj Kathuria, India President, JK Tyres, said. Any fleet of 100 trucks/buses, or more, is considered a 'large fleet'.
An initiative like the fleet management service also contributes to sustained relationship with customers, leading to repeat purchases of tyres by them. The customer base of 1300 fleet operators hasn't come easily for JK Tyres, an early mover with such a business intervention in the industry. The customer base has been built over the past two decades.
Under the fleet management business, JK Tyres is also offering tyre-as-a-service. It has about 250 pit stops, and close to 100 truck wheel centres, where its services are provided.
The company, which has also developed a tyre with 80% biodegradable materials, says that the 'green tyre' is close to a market launch. The tyre major has a target to achieve net zero emissions by 2050.
Source: auto.economictimes.indiatimes.com, February 9, 2024.
With reference to the above case study answer the following question:
Analyse the above case study and give any five differences between Product and Service.
Markets & Marketing
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Answer
JK Tyre & Industries provides both a product (tyres) and a service (fleet management and tyre-as-a-service). Based on this case, the five differences between a product and a service are:
| S.No. | Basis of Distinction | Product (Tyre) | Service (Fleet Management / Tyre-as-a-service) |
|---|---|---|---|
| 1. | Tangibility | A tyre is tangible — it can be seen, touched and physically possessed. | The fleet management service is intangible — it cannot be seen or touched, only experienced. |
| 2. | Perishability / Inventory | Tyres can be stored in warehouses or outlets for future sale. | Services like fleet management are perishable — they cannot be stored; they are produced and consumed simultaneously. |
| 3. | Ownership | When a fleet operator buys a tyre, ownership is transferred to the operator. | In tyre-as-a-service, the customer pays only for the service; ownership of the service-related assets is not transferred. |
| 4. | Inseparability | Tyres can be manufactured at a factory and sold elsewhere — production and sale are separable. | Fleet management services need JK Tyre's pit stops, wheel centres and personnel to be present at the time of delivery — service is inseparable from the provider. |
| 5. | Standardisation / Homogeneity | Tyres of a particular model are standardised — every unit is identical in quality. | Services may vary from one fleet/customer to another and from one pit stop to another — they are heterogeneous and depend on the staff providing them. |
| 6. | Customer Relationship | Selling a tyre is largely a one-time transaction. | Fleet management builds a sustained, long-term relationship leading to repeat purchases (as JK Tyres has built over the past two decades). |
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