CHAPTER-1 PLAN OF STUDY

MARKETING
Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling the product or service. It is a critical business function for attracting customers. From a societal point of view, marketing is the link between a societys material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. It is the process of communicating the value of a product or service through positioning to customers. Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that also benefit the organisation and its shareholders. Marketing is the science of choosingtarget markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value. There are five competing concepts under which organizations can choose to operate their business; the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The four components of holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing. The set of engagements necessary for successful marketing management includes, capturing marketing insights, connecting with customers, building strong brands, shaping the market offerings, delivering and communicating value, creating long-term growth, and developing marketing strategies and plans

Marketing concept
Earlier approach The marketing orientation evolved from earlier orientations, namely, the production orientation, the product orientation and the selling orientation.

Orientation

Profit driver

Western European

Description

timeframe

A firm focusing on a production orientation specializes in producing as much as possible of a given product or service. Thus, this signifies a firm exploiting economies of scale until Production[4] Production methods until the 1950s theminimum efficient scale is reached. A production orientation may be deployed when a high demand for a product or service exists, coupled with a good certainty that consumer tastes will not rapidly alter (similar to the sales orientation).

A firm employing a product orientation is Product[4] Quality of the product until the 1960s chiefly concerned with the quality of its own product. A firm would also assume that as long as its product was of a high standard, people would buy and consume the product.

A firm using a sales orientation focuses primarily on the selling/promotion of a particular product, and not determining new consumer desires as such. Consequently, this Selling[4] Selling methods 1950s and entails simply selling an already existing 1960s product, and using promotion techniques to attain the highest sales possible. Such an orientation may suit scenarios in which a firm holds dead stock, or otherwise sells a product that is in high demand, with

little likelihood of changes in consumer tastes that would diminish demand. The 'marketing orientation' is perhaps the most common orientation used in contemporary marketing. It involves a firm essentially basing its marketing plans around Needs and Marketing[4] wants of customers the marketing concept, and thus supplying 1970s to the products to suit new consumer tastes. As an present day example, a firm would employ market research to gauge consumer desires, use R&D (research and development) to develop a product attuned to the revealed information, and then utilize promotion techniques to ensure persons know the product exists. The holistic marketing concept looks at marketing as a complex activity and acknowledges that everything matters in marketing - and that a broad and integrated Everything HolisticMarketing[2] matters in marketing 21st century perspective is necessary in developing, designing and implementing marketing programs and activities. The four components that characterize holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing.

Contemporary approaches[edit] Recent approaches in marketing include relationship marketing with focus on the customer, business marketing or industrial marketingwith focus on an organization or institution and social marketing with focus on benefits to society.[5] New forms of marketing also use

the internet and are therefore called internet marketing or more generally e-marketing, online marketing, "digital marketing", search engine marketing, or desktop advertising. It attempts to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing. Internet marketing is sometimes considered to be broad in scope, because it not only refers to marketing on the Internet, but also includes marketing done via e-mail, wireless media as well as driving audience from traditional marketing methods like radio and billboard to internet properties or landing page.

Western Orientation Profit driver European timefram e Description

Emphasis is placed on the whole Relationship marketing /Relationshi p management[5] Building and keeping good customer relations 1960s to relationship between suppliers and present day customers. The aim is to provide the best possible customer service and build customer loyalty.

In this context, marketing takes place between businesses or organizations Business marketing /Industrial marketing Building and keeping relationships betweenorganization s 1980s to . The product focus lies present on industrial goods or capital day goods rather than consumer products or end products. Different forms of marketing activities, such as promotion, advertising and communication to

the customer are used.

Similar characteristics to marketing orientation but with the added 1990s to proviso that there will be a Societal marketing[5] Benefit to society present day curtailment of any harmful activities to society, in either product, production, or selling methods.

1980s to Branding Brand value present day

In this context, "branding" refers to the main company philosophy and marketing is considered to be an instrument of branding philosophy.

Customer orientation[edit]

Constructive criticism helps marketers adapt offerings to meet changing customer needs. A firm in the market economy survives by producing goods that persons are willing and able to buy. Consequently, ascertaining consumer demand is vital for a firm's future viability and even existence as a going concern. Many companies today have a customer focus (or market orientation). This implies that the company focuses its activities and products on consumer

demands. Generally, there are three ways of doing this: the customer-driven approach, the market change identification approach and the product innovation approach In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no reason to spend R&D (research and development) funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs. A formal approach to this customer-focused marketing is known as SIVA (Solution, Information, Value, Access). This system is basically the four Ps renamed and reworded to provide a customer focus. The SIVA Model provides a demand/customer-centric alternative to the wellknown 4Ps supply side model (product, price, placement, promotion) of marketing management. Solution

Product

Promotion

Information

Price

Value

Place (Distribution) Access If any of the 4Ps were problematic or were not in the marketing factor of the business, the business could be in trouble and so other companies may appear in the surroundings of the company, so the consumer demand on its products will decrease. However, in recent years service marketing has widened the domains to be considered, contributing to the 7P's of marketing in total. The other 3P's of service marketing are: process, physical environment and people. Some consider there to be a fifth "P": positioning. See Positioning (marketing).

Some qualifications or caveats for customer focus exist. They do not invalidate or contradict the principle of customer focus; rather, they simply add extra dimensions of awareness and caution to it. The work of Christensen and colleagues on disruptive technology has produced a theoretical framework that explains the failure of firms not because they were technologically inept (often quite the opposite), but because the value networks in which they profitably operated included customers who could not value a disruptive innovation at the time and capability state of its emergence and thus actively dissuaded the firms from developing it. The lessons drawn from this work include:

Taking customer focus with a grain of salt, treating it as only a subset of one's corporate strategy rather than the sole driving factor. This means looking beyond current-state customer focus to predict what customers will be demanding some years in the future, even if they themselves discount the prediction.

Pursuing new markets (thus new value networks) when they are still in a commercially inferior or unattractive state, simply because their potential to grow and intersect with established markets and value networks looks like a likely bet. This may involve buying stakes in the stock of smaller firms, acquiring them outright, or incubating small, financially distinct units within one's organization to compete against them.

Other caveats of customer focus are:

The extent to which what customers say they want does not match their purchasing decisions. Thus surveys of customers might claim that 70% of a restaurant's customers want healthier choices on the menu, but only 10% of them actually buy the new items once they are offered. This might be acceptable except for the extent to which those items are moneylosing propositions for the business, bleeding red ink. A lesson from this type of situation is to be smarter about the true test validity of instruments like surveys. A corollary argument is that "truly understanding customers sometimes means understanding them better than they understand themselves." Thus one could argue that the principle of customer focus, or being close to the customers, is not violated herejust expanded upon.

The extent to which customers are currently ignorant of what one might argue they should wantwhich is dicey because whether it can be acted upon affordably depends on whether or how soon the customers will learn, or be convinced, otherwise. IT hardware and software capabilities and automobile features are examples. Customers who in 1997 said that they would not place any value on internet browsing capability on a mobile phone, or 6% better fuel efficie

CUSTOMER SATISFACTION
Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals." In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses. It is seen as a key performance indicator within business and is often part of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. "Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability. . . . These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-ofmouth marketing, which is both free and highly effective." Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction. "In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget moteleven though its facilities and service would be deemed superior in 'absolute' terms." The importance of customer satisfaction diminishes when a firm has increased bargaining power. For example, cell phone plan providers, such as AT&T and Verizon, participate in an industry that is an oligopoly, where only a few suppliers of a certain product or service exist. As such, many cell phone plan contracts have a lot of fine print with provisions that they would never get away if there were, say, a hundred cell phone plan providers, because customer satisfaction

would be far too low, and customers would easily have the option of leaving for a better contract offer. There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms.

Purpose

A business ideally is continually seeking feedback to improve customer satisfaction. "Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty." "Customer satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use is twofold:" 1. "Within organizations, the collection, analysis and dissemination of these data send a message about the importance of tending to customers and ensuring that they have a positive experience with the companys goods and services." 2. "Although sales or market share can indicate how well a firm is performing currently, satisfaction is perhaps the best indicator of how likely it is that the firms customers will make further purchases in the future. Much research has focused on the relationship between customer satisfaction and retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the extremes." On a five-point scale, "individuals who rate their satisfaction level as '5' are likely to become return customers and might even evangelize for the firm. (A second important metric related to satisfaction is willingness to recommend. This metric is defined as "The percentage of surveyed customers who indicate that they would recommend a brand to friends." When a customer is satisfied with a product, he or she might recommend it to friends, relatives and colleagues. This can be a powerful marketing advantage.) "Individuals who rate their satisfaction level as '1,' by contrast, are unlikely to return. Further, they can hurt the firm by making negative comments about it to prospective customers. Willingness to recommend is a key metric relating to customer satisfaction."

Objectives of the Study

-sales and after sales services provided by the dealers.

Scope and Limitations of the Study

Literature Review
Customer satisfaction is defined as a result of a cognitive and affective evaluation, where some comparison standard is compared to the actual perceived performance. If the perceived performance is less than expected, customers will be dissatisfied. On the other hand, if the perceived performance exceeds expectations, customer will be satisfied. Customer satisfaction is a critical issue in the success of any business system traditional or online. In a turbulent commerce environment, in order to sustain the growth and market share, companies need to understand how to satisfy customers, since customer satisfaction is critical for establishing long term client relationships (Paterson et al., 1997). To understand satisfaction, we need to have a clear understanding of what is meant by customer satisfaction.

Kotler (2000) defined satisfaction as a persons feeling of pleasure or disappointment resulting from comparing a products perceived performance (or outcome) in relation to his or her expectations. When customers become satisfied about the value that is offered and sometimes his or her expectation is met and exceeded, can generate many benefits for a firm. Positive word of mouth from existing and satisfied customers sometimes can translate into more new customers to the firm. Also, satisfied current customers often buy more products more frequently and are less likely to defect to competitors than are dissatisfied customers. Firms that have high degree of customer satisfaction, also seem to have the capacity to shield off competition particularly price competition. According to Drucker (1954), the principle purpose of a business is to create satisfied customers. Increasing customer satisfaction has been found to lead to higher future profitability (Anderson, Fornell, and Lehmann 1994), lower costs related to defective goods and services (Anderson, Fornell, and Rust 1997), increased buyer willingness to pay price premiums, provide referrals, and use more of the product (Reichheld 1996; Anderson and Mittal 2000), and higher levels of customer retention and loyalty (Fornell 1992; Anderson and Sullivan 1993; Bolton 1998). Increasing loyalty, in turn, has been found to lead to increases in future revenue (Fornell 1992; Anderson, Fornell, and Lehmann 1994) and reductions in the cost of future transactions

(Reichheld 1996; Srivastava, Shervani, and Fahey 1998). All of this empirical evidence suggeststhat customer satisfaction is valuable from both a customer goodwill perspective and an organizations financial perspective. According to Kotler (2000) it is important to measure customer satisfaction regularly through survey to determine customers level of satisfaction. He said this is because firms may think that they are getting a sense of customer satisfaction through customer complaints. However, in reality, 95 percent of dissatisfied customers do not make any complaint and they just leave. As a result it is important for firms to make it easy for the customer to complain. About 54 to 70 percent dissatisfied customers who usually complain, will continue to do business again with the organization if their complaints are taken care of and resolved.