zCHAPTER II

THEORETICAL REVIEW

2.1. Definitions of Marketing

Basically, Every product we buy, every store we visit, every media
message we receive and every choice we make in our consumer society has been
shaped by the forces of marketing. Understanding marketing according to expert
in general, marketing can be interpreted as ways undertaken by the company in
selling their products. In addition, there is also the opinion that the definition of
marketing is a promotional effort or the way companies in influencing consumers
to buy their products. However, the actual meaning of the broader marketing of
such notions. Marketing was first studied as a field of business in 1902. At that
time, marketing is still referred to as distribution of goods and stems in a
distribution process. Marketing then interpreted as a business activity to direct the
flow of goods and services from producers to consumers or users.
In the era of the 1960s, the emphasis switched on the marketing of the
company's management so that marketing can be defined as the management of
the flow of goods and services from producers to consumers. This is similar to the
notion of marketing proposed by the following experts:
1. Koller and Armstrong (2012:29): Marketing is the process of managerial
therein, individuals and groups obtain what they need and want through
creating and exchanging products and value one another.
2. According Daryanto (2011: 1) is "a process of social and managerial in which
individuals and groups obtain their needs and desires them by creating,
offering, and exchanging something of value one another".
6

3. Djaslim Saladin (2007:2): Marketing is a whole system of business activities

aimed at planning, pricing, promoting, and distributing goods and services that
can satisfy the needs of both the buyers existing and potential buyers.
From the definition of marketing experts in the above, it can be concluded
that marketing is a process of exchange of products in the form of goods, services,
and ideas that involve two or more parties. In practice, marketing is often seen as
a creative efforts, promotion or advertising, distribution, and sales. Therefore, the
success of a company is also often associated with the success of marketing
efforts conducted by the company. So that marketing efforts can be done
effectively and achieve the expected goals, strategy formulation needed to be
really careful. And one of the most important things that can support the
formulation of a marketing strategy that is with good marketing data analysis. In
this case, the data becomes important to observe.
Sometimes people assume marketing is just about advertising or selling,
but this is not the whole story. It is a key management discipline that ensures
producers of goods and services can interpret consumer desires and match, or
exceed them. The marketing process is central to the business performance of
companies, both large and small, because it addresses the most important aspects
of the market. It is about understanding the competitive marketplace and ensuring
you can tap into key trends, reaching consumers with the right product at the right
price, place and time. Clever marketing has led to many recent business success
stories, from pharmaceuticals to airlines, sports brands to food and drink,
business-to-business companies to small, niche players. Conversely, history

reminds us that without proper marketing, you cant get close to customers and
satisfy their needs and if you cant, a competitor surely will.
Getting close has become more important than ever as digital and mobile
technology make inroads into all aspects of life. This revolution has also provided
new tools to make marketing more targeted, relevant and effective. Today, as
competitive pressures increase, marketing skills have never been more highly
valued. What was once seen as a departmental activity is now regarded as a
frontline business attitude for all employees. The professionals who shape and
implement marketing strategy contribute directly to the economy. Their skills
attract and retain customers, build sales and increase profits generating wealth for
all.
2.1.1. The Functions and Criticism of Marketing in an Organization
As weve seen the key objective of an organizations marketing efforts is
to develop satisfying relationships with customers that benefit both the customer
and the organization. These efforts lead marketing to serve an important role
within most organizations and within society.
At the organizational level, marketing is a vital business function that is
necessary in nearly all industries whether the organization operates as a for-profit
or as a not-for-profit. For the for-profit organization, marketing is responsible for
most tasks that bring revenue and, hopefully, profits to an organization. For the
not-for-profit organization, marketing is responsible for attracting customers
needed to support the not-for-profits mission, such as raising donations or

supporting a cause. For both types of organizations, it is unlikely they can survive
without a strong marketing effort.
Marketing is also the organizational business area that interacts most
frequently with the public and, consequently, what the public knows about an
organization is determined by their interactions with marketers. For example,
customers may believe a company is dynamic and creative based on its
advertising message. While marketing is viewed as offering significant benefits to
organizations and to society, the fact that marketing is a business function
operating in close contact with the public opens this functional area to extensive
criticism. Among the issues cited by those who criticize marketing are:
1. Marketing Encourages People to Purchase What They Do Not Need
Possibly the criticism most frequently made about marketing is that marketers
are only concerned with getting customers to buy whether they want the
product or not. The root of this argument stems from the belief that marketers
are only out to satisfy their own needs and really do not care about the needs
of their customers. As we will discuss, while many marketers are guilty of
manipulating customers into making unwanted purchases, the vast majority
understand that undertaking such tactics will not lead to loyal customers and,
consequently, is unlikely to lead to longer term success.
2. Marketers Embellish Product Claims
Marketers are often criticized for exaggerating the benefits offered by their
products. This is especially the case with the part of marketing that engages in
customer communication, such as advertising and salespeople. The most

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serious problems arise when product claims are seen as misleading customers
into believing a product can offer a certain level of value that, in fact, it
cannot. But sometimes there is a fine line between what a rational person
should accept as a reasonable exaggeration and what is considered
downright misleading. Fortunately, many countries offer customers some level
of protection from misleading claims since such business practices may
subject the marketer to legal action. Again, using such tactics is likely to lead
to marketing failure as customers will not be satisfied and will likely not
return
3. Marketing Discriminates in Customer Selection
We will see later that a key to marketing success is to engage in a deliberate
process that identifies customers who offer marketers the best chance for
satisfying organizational objectives. This method, called target marketing,
often drives most marketing decisions, including product development and
price setting. But some argue that target marketing leads marketers to focus
their efforts primarily on customers who have the financial means to make
more expensive purchases. They contend that doing so intentionally
discriminates against others, especially lower income customers who cannot
afford to purchase higher priced products. This group ends ups being targeted
with lower quality (and in some cases less safe) products or for some groups,
no product options. While this criticism is often valid, it is worth noting that
while many lower quality products are inferior to current high-end products,
comparison of their quality to similar products from just a few years ago
shows there has been significant improvement. For instance, low cost

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electronic equipment, such as digital cameras, offer more features compared to

low cost cameras of just a few years ago. Thus, while certain customer groups
may not be the target market for certain new product offerings they may
eventually benefit from higher-end products.
4. Marketing Contributes to Environmental Waste
In recent years one of the loudest complaints against marketing concerns its
impact on the environment. Those critical of marketings effect on the
environment point to such issues as: the use of excessive, non-biodegradable
packaging (e.g., use of plastics, placing small products in large packages, etc.)
the continual development of resource consuming products (e.g., construction
of new buildings, golf courses, shopping malls, etc.) the proliferation of
unsightly and wasteful methods of promotions (e.g., outdoor billboards, direct
mail, etc.). Marketers have begun to respond to these concerns by introducing
green marketing campaigns that are not only intended to appease critics but
also take advantage of potential business opportunities. For example, auto
makers see opportunity by creating new fuel efficient hybrid vehicles, the
demand for which has accelerated in the last few years. Also, certain retailers
are finding financial opportunity and promotional value by asserting their
marketing muscle to encourage customers to become more environmentally
responsible. This can be seen with retailers, such as Wal-Mart, that are shifting
its inventory of light bulbs from standard incandescent types to more efficient
fluorescent products. It is expected that as environmental activism gains
political clout and more consumer support, marketers will see even more
opportunity to market environmentally friendly products.

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5. Marketing Encroaches on Customers Right to Privacy

Gathering and analyzing information on the market in which marketers
conduct business is a vital step in making good marketing decisions. Often the
most valuable information deals with customers buying behavior and
especially determining which factors influence how customers make purchase
decisions. But to some consumer advocates digging deep into customer buying
behavior crosses the line of what is considered private information. Of most
concern to privacy advocates is marketers use of methods that track user
activity. In particular, they are critical of the growing use of advanced
technologies that allow marketers to gain access to customer shopping and
information gathering habits. For instance, marketers can use highly advanced
techniques to track user activity on the Internet. Some marketers do so using
questionable practices, such as loading tracking software onto a users
computer, without the knowledge or permission of the user. One type of
software called adware allows marketers to monitor users website browsing
activity and use this information to deliver advertisements based on users
Internet habits. Privacy issues are not limited to concerns with online tracking;
marketers also use techniques to track customers offline purchase activity.
One example of offline tracking occurs when retail stores match sales
transactions to individual shoppers. This is easy to do when customers use
purchase cards (a.k.a. loyalty cards, discount cards, club cards, etc.) as part of
the buying process. Privacy issues are not restricted to marketing research.
Other areas of marketing have also experienced problems. For instance, there
have been several recent incidences, most notably those involving mishandled

13

credit card payment information, where a breach in customer privacy has

placed customers at risk. The issue of customer privacy is likely to become
one of the most contentious issues marketers face in the coming years. If this
continues marketers may soon face greater legal limits on how they conduct
business.
Marketing is one part of a company that has an important role in
determining the progress of the company. Therefore, this field has a function for
generating income for the company. the greater the income that was achieved, the
company will grow. And vice versa. However, this marketing field cannot stand
alone in a company. Any activity undertaken this division, have relationships and
links with every part of the company. As part of the production, human resources,
research and development and especially the financial section.
Without a relationship that is consistent with all of the part, then the
marketing division will not be able to function as it should. With the production,
the marketing has a need to know for sure a products is dominated by the
production department. And the task of the marketing department is to convey the
characteristics of the product to the public. There are several branches that are part
of the marketing. Some branches such as field sales, promotions and marketing
communications. It needs to be understood, because in society today many are
confused about an understanding between marketing and sales. In fact, both of
these are essentially different, although still in the line system.
Every department in a company has its own function. Although in general,
the purpose of each part is to bring the company's progress. But specifically, there

14

is a function that must be achieved by each of these sections. For the marketing
function itself, there are some things that a function of the part. Some functions of
the marketing division of which are:
1. As part of introducing the company to the public, through the products made
by the company. This role is referred to as a promotional role.
2. Marketing in charge of generating revenue for the company by selling the
company's products. This role is one of the marketing function in the field of
sales.
3. To establish good relations with customers and the community as well as
being a bridge between the company and the external environment. This is
done as an embodiment of the concept of marketing communication.
4. Marketing has the task to absorb and deliver information to companies about
everything useful to support quality improvement and product sales. It is the
role of marketing in the field of research and development.
2.1.2. Social Responsibility In Marketing
Most marketing organizations do not intentionally work in isolation from
the rest of society. Instead they find that greater opportunity exists if the
organization is visibly accessible and involved with the public. As weve seen,
because marketing often operates as the public face of an organization, when
issues arise between the public and the organization marketing is often at the
center. In recent years the number and variety of issues raised by the public has
increased. One reason for the increase is the growing perception that marketing
organizations are not just sellers of product but also have an inherent
responsibility to be more socially responsible, including being more responsible
for its actions and more responsive in addressing social concerns.

15

Being socially responsible means an organization shows concern for the

people and environment in which it transacts business. It also means that these
values are communicated and enforced by everyone in the organization and, in
some cases, with business partners, such as those who sell products to the
company (e.g., supplier of raw material for product production) and those who
help the company distribute and sell to other customers (e.g., retail stores).
In addition to insuring these values exist within the organization and its
business partners, social responsibility may also manifest itself in the support of
social causes that help society. For instance, marketers may sponsor charity events
or produce cause-related advertising.
Marketers who are pursuing a socially responsible agenda should bear in
mind that such efforts do not automatically translate into increased revenue or
even an improved public image. However, organizations that consistently exhibit
socially responsible tendencies may eventually gain a strong reputation that could
pay dividends in the form of increased customer loyalty.
2.2. Marketing Mix
In carrying out marketing activities, the company combines four variables
that were very supportive in determining the marketing strategy, a combination of
four variables it is known as the marketing mix, Traditionally, the marketing mix
was developed for the fast moving consumer goods sector, and there were 4 Ps:
Product, Price, Promotion, and Place (or distribution). As service sectors have
become more aware of marketing, this marketing mix has been developed to also
include: People, Process and Physical Evidence (7ps). Most of us sell either

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products with a surrounding service element (for example, a customer care helpline for a software retailer) or services with a tangible element (the skill of a hair
stylist is a service but tangible products are required to deliver it). So it could be
wise, even for product manufacturers, to consider all 7Ps in their marketing mix.
According to Kotler & Armstrong (1997: 48), "The marketing mix or
marketing mix is a set of tools that can be controlled tactical marketing, product,
pricing, distribution, and promotion of the combined company to produce the
desired response in the target market".
While according to Gilbert A. Churchill (2006: 8), "Marketing Mix namely
product or 4P (product) or service, price , where (place) or channels of
distribution, and promotion

or communications mix ". Could described as

follows:

Source: Gilbert A. Churchill: Creating Value for Customers (1998)

Figure 2.1. Marketing Mix by Churchill

Furthermore, Sumarmi and Soeprihanto (2010: 274) explains, "The
marketing mix is a combination of variables or activities that constitute the core of
the marketing system of product, price, promotion, and distribution. In other
words, the marketing mix is a collection of variables that can be used by

17

companies to influence consumer responses ". and more over, "Marketing mix is a
strategy combining marketing activities, in order to create maximum combination
which raises the most satisfactory results". (Alma, 2006: 205). Simply put the
Marketing Mix is a tool used by businesses and Marketers to help determine a
product or brands offering. The 4 Ps have been associated with the Marketing
Mix since their creation by E. Jerome McCarthy in 1960:

Product
According Sumarni and Soeprihanto (2010: 274), "The product is every
anything that can be offered in the market to get attention, demand, usage or
consumption that can meet the desires or needs." The products not only
always in the form of goods but could also be a service or a combination of
both (goods and services). As seen in the goods-service continuum, your
product can have both tangible and intangible aspects, and is the thing you
offer to satisfy your customers wants and needs. Within this element, you
need to consider such things as your product range; its quality and design; its
features and the benefits it offers; sizing and packaging; and any add-on
guarantees and customer service offerings.
-

A product does not have to be tangible an insurance policy can be a

product.

The perfect product provides value for the customer. This value is in the
eye of the beholder we must give our customers what they want, not
what we think they want.

System in place to regularly check what your customers think of

companys product and your supporting services.

18

Find out what customers needs are now and whether they believe these
will change in future.

Beware the product quality trap dont take it too far by trying to sell a
Rolls-Royce when the customer really wants a Nissan Micra.

Price
According Sumarni and Soeprihanto (2010: 281) the price is, "The amount of
money (plus a few products that may be) required to obtain a number of
combinations of items and their ministry". Once the products are
manufactured ready for marketing, the company will determine the price of
these products. Sound pricing decisions are crucial to a successful business
and should be considered at both long-term strategic and short-term tactical
levels. Within this element of the mix you should consider list price and
discount price; terms and conditions of payment; and the price sensitivity of
your market. Worth remembering is the connection of price to your position in
the marketing specifically that only one operator in any market can be the
cheapest. Jostling between competitors for this position is rarely wise. There is
no point in developing a product or service that no one wants to buy, yet many
businesses decide what to offer first, then hope to find a market for it
afterwards. Successful companies find out what customers need or want and
then develop the right product with the right level of quality to meet their
expectations, both now and in the future. When considering the price of your
product, its important to look at it from the customers perspective:

Price positions the company in the marketplace it tells customers where to

place in relation to their competitors.

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The more a company charge, the more value or quality your customers will
expect for their money.

This is a relative measure. If a company is the most expensive provider in

their market, customers will expect them to provide a better service.

Everything that the customer sees must be consistent with these higher quality
expectations packaging, environment, promotional materials, website,
letterheads, invoices, etc.

Existing customers are generally less sensitive about price than new customer
a good reason to look after them well.

Place
Place in the marketing mix commonly referred to as a distribution channel, the
channel where the product is up to the consumer. Definition of Sumarni and
Soeprihanto (2010: 288) of the distribution channel is "Channel used by
manufacturers to distribute the products from producer to consumer or
industrial user". Marketers love models that explain the way they work; they
love it even more when elements of each model begin with the same letter
hence the use of the word Place to describe distribution channels. Choice of
such channels is important, as is the variety of channels you use. For example,
a common issue for businesses beginning to trade on-line is how that will
affect their off-line business, for example selling directly through the web
could alienate retail outlets that have been the mainstay of your business in the
past. The place where customers buy a product, and the means of distributing
your product to that place, must be appropriate and convenient for the

20

customer. This applies to brick-and-mortar operations, but is even more

important in e-commerce.
-

Customer surveys show that delivery performance is one of the most

important criteria when choosing a supplier.

Place also means ways of displaying your product to customer groups.

This could be in a shop window, but it could also be online.

E-commerce operations that sell exclusively on the internet must place

even more emphasis on the company website and other online activities, as
there are fewer points where the customer will interact with the company.

For the same reason, all firms that sell online should consider how the
product will be delivered to the consumer even if this is handled by a
third party.

Mobile is an increasingly important purchasing channel for consumers, so

it may be a good time to optimize your website. Does yours conform to the
latest standards? For example, Google search now penalizes websites that
are not optimized for mobile, potentially making it more difficult for
consumers to find the company.

Promotion
According Tjiptono (2008: 219), in fact the campaign is a form of marketing
communications. What is meant by marketing communication is the
marketing activities that tries to spread information, influence / persuade, and /
or remind the target market for the company and its products to be willing to
accept, purchase, and loyal to the products offered by the company concerned.
This is the element of the marketing mix that most people mean when they

21

talk about marketing. But jumping straight into decisions about what
promotional tools to use without considering their relationship to the rest of
the mix can be a sure-fire way to waste money. There are many different
promotional techniques, each with their own strengths but essentially they can
be broken down into four broad categories: Advertising; Public Relations;
Sales Promotions; and Direct Selling. These techniques are used to
communicate the specific benefits of your product to your customers.
- Good promotion is not one-way communication it paves the way for a
-

dialogue with customers, whether in person or online.

Promotion should communicate the benefits that a customer receives from
a product, not just its features. The companys website is often the
customers first experience of the company, they only have one chance to
make a good first impression, so companies have to make sure that
information on the site is always kept up to date and the design is updated

to keep it fresh.
Explore new channels from traditional print ads to the latest social media
trends, there is now a world of possibilities to explore. The important

principle is to always advertise where your target consumer goes.

Printed promotional material must grab the attention of your customers. It
should be easy to read and enable the customer to identify why they

should buy a product

A brochure isnt necessarily the best way of promoting your business.
Unlike a website, the information is fixed once a brochure has been
printed. A more cost-effective and flexible option might be a folder with a
professionally designed sheet inside, over a series of a companys own
information sheets produced in-house. These sheets can be customized by
varying them to suit the target customers and/or changing them as required

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Promotion does not just mean communicating with your customers. It is

just as important to communicate with staff/fellow employees about the
value and attributes of a products. A company can then pass on the
knowledge to their customers.

Source: professional Academy.com (2016)

Figure 2.2 7ps of Marketing Mix

In the late 70s it was widely acknowledged by Marketers that the
Marketing Mix should be updated. This led to the creation of the Extended
Marketing Mix in 1981 by Booms & Bitner which added 3 new elements to the 4

23

Ps Principle. This now allowed the extended Marketing Mix to include products
that are services and not just physical things:

People
This factor refers to the service employees who produce and deliver the
service. It has long been a fact that many services involve personal
interactions between customers and the site's employees, and they strongly
influence the customers perception of service quality. The impact that people
can have on a companys marketing cannot be underestimated. At its most
obvious, this element covers the companys front line sales and customer
service staff who will have a direct impact on how the companys product is
perceived. Companies need to consider the knowledge and skills of staffs;
their motivation and investment in supporting a brand. Any element of the
marketing mix will also have its impact on other elements of a business, but
the people element is one where the importance of regarding marketing as an
integral part of the way company do business is crystal clear. Of both target
market and people directly related to the business. Thorough research is
important to discover whether there are enough people in target market that is
in demand for certain types of products and services. The companys
employees are important in marketing because they are the ones who deliver
the service. It is important to hire and train the right people to deliver superior
service to the clients, whether they run a support desk, customer service,
copywriters, programmers. When a business finds people who genuinely
believe in the products or services that the particular business creates, its is
highly likely that the employees will perform the best they can. Additionally,

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theyll be more open to honest feedback about the business and input their
own thoughts and passions which can scale and grow the business. This is a
secret, internal competitive advantage a business can have over other
competitors which can inherently affect a businesss position in the
marketplace.
-

The reputation of a brand rests in the hands of a companys staff. They

must be appropriately trained, well-motivated and have the right attitude.

All employees who have contact with customers should be well-suited to

the role.

In the age of social media, every employee can potentially reach a mass
audience. Formulate a policy for online interaction and make sure
everyone stays on-message.

Likewise, happy customers are excellent advocates for business. Curate

good opinion on review sites.

Superior after sales support and advice adds value to your offering, and
can give companies a competitive edge. These services will probably
become more important than price for many customers over time.

Companies have to look regularly at the products that account for the
highest percentage of their sales. Do these products have adequate after
sales support, or are the company being complacent with them? Could
they enhance their support without too much additional cost?

Process
Process is generally defined as the implementation of action and function that
increases value for products with low cost and high advantage to customer and

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is more important for service than for goods. the pace of the process as well
as the skill of the service providers are clearly revealed to the customer and it
forms the basis of his or her satisfaction with the purchase. Therefore, process
management ensures the availability and consistence of quality. In the face of
simultaneous consumption and production of the process management,
balancing services demand with service supply is extremely difficult. The
design and the implementation of product elements are crucial to the creation
and delivering of product. The systems and processes of the organization
affect the execution of the service. So, companies have to make sure that you
have a well-tailored process in place to minimize costs. It could be entire sales
funnel, a pay system, distribution system and other systematic procedures and
steps to ensure a working business that is running effectively. Tweaking and
enhancements can come later to tighten up a business to minimize costs and
maximize profits.
- That means the process of delivering the product or service, and the
behavior of those who deliver it, are crucial to customer satisfaction. A
user-friendly internet experience, waiting times, the information given to
-

customers and the helpfulness of staff are vital to keep customers happy.
Customers are not interested in the detail of how your business runs, just
that the system works. However, they may want reassurance they are

buying from a reputable or authentic supplier.

Remember the value of a good first impression. Identify where most
customers initially come into contact with your company - whether online
or offline and ensure the process there, from encounter to purchase, is
seamless.

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Companies have to ensure that their systems are designed for the

customers benefit, not the companys convenience.

Do customers have to wait? Are they kept informed? Is your website fast
enough and available on the right devices? Are your people helpful? Is
their service efficiently carried out? Do a companys staff interact in a

manner appropriate to a companys pricing?

Customers trying to reach a company by phone are a vital source of
income and returning value; but so often they are left on hold. Many will
give up, go elsewhere and tell their friends not to use a company just

because of the poor process.

Physical Evidence
This factor refers to the environment in which the service and any tangible
goods that facilitate the performance and communication of the service are
delivered. This holds great importance because the customer normally judges
the quality of the service provided through it. In addition, this factor also
refers to the environment in which the services production is in. similarly,
other visible surroundings can affect the impressions

perceived by the

customers about service quality. The components of the service experience are
called the services-cape-that is, the ambience, the background music, the
comfort of the seating, and the physical layout of the service facility, the
appearance of the staff can greatly affect a customers satisfaction with a
service experience. The environmental dcor and design also significantly
influence the customers expectations of the service. Services normally cannot
be displayed, therefore firms should create a suitable environment to highlight
the fact to the customers . In the service industries, there should be physical
evidence that the service was delivered. Additionally, physical evidence

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pertains also to how a business and its products are perceived in the
marketplace. It is the physical evidence of a business presence and
establishment. A concept of this is branding. For example, when you think of
fast food, we think of McDonalds. When we think of sports, the names Nike
and Adidas come to mind. we immediately know exactly what their presence
is in the marketplace, as they are generally market leaders and have
established a physical evidence as well as psychological evidence in their
marketing. They have manipulated their consumer perception so well to the
point where their brands appear first in line when an individual is asked to
broadly name a brand in their niche or industry.
- A clean, tidy and well-decorated reception area or homepage - is
reassuring. If a companys digital or physical premises arent up to scratch,
-

why would the customer think their service is?

The physical evidence demonstrated by an organization must confirm the
assumptions of the customer a financial services product will need to be
delivered in a formal setting, while a childrens birthday entertainment

company should adopt a more relaxed approach.

Some companies engage customers and ask for their feedback, so that they
can develop reference materials. New customers can then see these

testimonials and are more likely to purchase with confidence.

Although the customer cannot experience the service before purchase, he
or she can talk to other people with experience of the service. Their
testimony is credible, because their views do not come from the company.
Alternatively, well-shot video testimonials and reviews on independent
websites will add authenticity. Each of the ingredients of the marketing
mix is key to success. No element can be considered in isolation a

28

company cannot, for example, develop a product without considering a

price, or how it will reach the customer.
The 7Ps framework owing to the dissatisfaction with the 4Ps framework.
The findings reveal more emphasis on the traditional 4Ps in consumer marketing
and less on other mix variables. Moreover, there is a similar opinion in services
marketing but there have also been strong claims that 7Ps should be used as a
general framework due to the simple nature of 4Ps mix. On the other hand, there
is consensus on the complexity of the 7ps mix. The strengths and weaknesses of
both 7Ps and 4Ps are listed below in Table 2.1:
Table 2.1 7ps VS 4ps
7Ps
Strength

4Ps

More Comprehensive
More detailed
More refined
Broader perspective (includes

Participants/people, process
Its a model standardizations
Signals marketing theory

Simplicity

understanding
Easy to memorize
Good
pedagogic

and

ease

of

tool,

especially for introductory

marketing
Parsimony
Useful

framework
Ability to adapt to various

conceptual

problems
Weaknesses

More complicated
Extra elements can be

Too simple, not broad

incorporated in 4Ps
Controllability of

enough
Lacking

participants and process

Physical evidence
Relationship marketing

three new elements

the

people,

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Service
Lack

of

connection/integration
between variables Static
nature of 4Ps

2.2.1. So Why 7Ps?

Traditionally, the marketing mix was developed for the fast moving
consumer goods sector, and there were 4 Ps: Product, Price, Promotion, and Place
(or distribution). As service sectors have become more aware of marketing, this
marketing mix has been developed to also include: People, Process and Physical
Evidence. Even if you think you only sell a product, so the original 4 Ps will
suffice, it can be useful to think how much of a service element there is to your
business. Indeed, the goods-service continuum demonstrates that very few
products are purely goods and very few purely service.
Most of us sell either products with a surrounding service element (for
example, a customer care help-line for a software retailer) or services with a
tangible element (the skill of a hair stylist is a service but tangible products are
required to deliver it). So it could be wise, even for product manufacturers, to
consider all 7 Ps in their marketing mix.
2.3. Customer
Customers according to the Cambridge International Dictionaries by), is "a
person who buys goods or a services" or customer is someone who buys goods
and services. Meanwhile, according to Webster's 1928 Dictionary the customer is

30

"one who frequents any place of sale for producing what he wants ... ". (Customer
is someone who several times came to the same place to fulfill what he wants ..).
And essentially, in other words, the customer is a person who, repeatedly come to
a place that is equal to its desires having a product or obtain services by paying
the product or services.
2.3.1. Customer Behavior
As the increasing number of companies that offer products and services,
that makes consumers have more choices, thus the bargaining power of consumers
increases. Therefore, the company should know what are the consumers needs
and wants, and then try to meet those needs and wants. In order to increase the
corporate profits, one of the many strategies that adopted by the company are by
doing promotion but before a company doing promotion the company should first
know the consumers market.
Does the consumers that is expected by the companies come from middle and
upper level or medium, in addition to the company must be able to understand
what is expected from the company. By knowing the buyer desires clearly,
companies can tailor the promotions to the needs and desires of consumers so that
we can achieve a better the results. Therefore the company should determine
consumer behavior first before running a campaign.
What is a consumer behavior? Consumer behavior as defined by Kuester
(2012:110), is Consumer behavior is the study of individuals, groups, or
organizations and the processes they use to select, secure and dispose of products,
services, experiences, or ideas to satisfy needs and the impacts that these process
have on the consumer and society.

31

It blends elements from psychology, sociology, social anthropology and

economics. It attempts to understand the decision-making processes of buyers,
both individually and in groups. It studies characteristics of individual consumers
such as demographics and behavioral variables in an attempt to understand
peoples wants. It also tries to assess influences on the consumer from groups such
as family, friends, reference groups and society in general.
2.3.2. Customer Value
The term value is used as a different context. Customer Value is the
perceived customer choice and evaluation of the product and service attributes,
performance attributes and consequences arising from use of the product to
achieve the purpose and intent consumers when using the products. Woodruff also
defines Customer perception of value as a consequence he wanted from the use of
a product / service. Customer value can be described as preferences that customers
feel the product features, performance, and the extent to which has fulfilled what
he wants.
Furthermore, According Tjiptono (2006: 144), customer value based on
the customer's perspective or organization concerned, with consider the customer's
wishes and beliefs of the purchase and the use of a product or service. Value
search by the customer to the product / service of the company then rise to the
theory called the customer delivered value, is the magnitude of the value given by
the customer to the product / service the company offered to him (customer value)
to charges incurred by customers to acquire products / services. (Lupiyoadi, 2006:
144).

32

Essentially, customer value is a concept that is most widely used by

businesses. The concept is simple and can be used as a first step the formulation
of the next strategy. Many strategic decisions the company or the brand owner to
use this concept as its main foundation, although often not Formulated well. They
do not use systematic calculations with sophisticated data analysis, but through
the judgment.
For example, a company will make changes to the product price. Some
consideration will arise before the decision to change the prices are set, such as
how much the maximum price for this product? Whether consumers will still buy
this product? Whether the price is set too high when compared with competitors'
prices? Similarly, businesses that strive to improve the quality. They will face
some questions in mind: What will consumers view quality as a benefit or added
value? Are consumers going to say that the product quality? Whether consumers
would also say that my product is better than the competition?
Simply put, customer value is defined as all of the benefits or the quality
of the consumer obtained relative to sacrifice. When formulated mathematically,
customer value is the total benefit or quality divided by price. Furthermore, this
formula can be developed because of the existence of two aspects: price and
quality. Both of these aspects are multidimensional.
There are three components that could represent quality. First, the quality
can be a quality product. A mobile phone is said to be of good quality if the
product is durable, not easily broken, has a nice design and many features.

33

Similarly, food products such as biscuits, is said to be of good quality if it feels

good, savory, crunchy, and others.
Secondly, the quality can be quality of service. Service industries such as
mobile operators will be much more to offer quality service. In the service
industry such as mobile operators, factors intangibles become a very important
component. They will add to the quality of the components through a service that
is accurate, fast, friendly, and so forth. Similarly, the banking industry, insurance,
airlines, hospitals and so forth will be vying to add value through service quality.
Thirdly, the quality can also mean "emotional quality". It is the quality
perceived by the consumer because of the influence of brand and relationship
(brand to customer experience). They feel proud to use the brands classy. Those
who use a bag or tie Louis Vuitton or Versace would feel proud and satisfied.
Those who drive luxury cars such as Mercedes-Benz and BMW will feel more
pride. Similarly, tobacco products also gives pride to the smoker. Smokers who
come from the lower classes would feel proud when smoke cigarettes that fits
with their personality. Emotional factors can also occur because the customer has
a very strong relationship with the company or with fellow customers. They have
a personal and emotional connection. Customers who are already treated with
great empathy by a head of a branch of a bank, will benefit from a close
relationship like this. Therefore, they will say that the bank has given a high value
on the outside of the product or service quality.
As an illustration, This is what is perhaps the big question for the players
of the mobile operators and FWA. In 2007 and possibly in 2008, we saw an

34

exciting competition of the players in this industry. It was, we never see the level
of competition is so fierce in advance. Many players in the industry, would prefer
to do a price war. For newcomers, not much choice but to offer cheap prices.
The industry is already approaching saturation levels. The operators are
aware that the acquisition process will be slower and more expensive. One time,
they will be difficult to find new users, but must make acquisitions with a way to
take it from other operators. How to seize the fastest customer is through price.
With the low price, the customer value will quickly rise. From the formulas
already mentioned earlier, we can estimate. When the quality is not considered
important by the customer, then by lowering the price, customer value will rise.
Especially for those who are relatively sensitive to price.
For example, price-sensitive customers will give the price by 80%
weighting and weighting for quality by 20%. Thus, when prices are lowered by
50%, total customer value will rise by 40%. An easiest way to win new customers.
However, customer value will continue to change and move. One is because of the
reaction of competitors. If then they also lowered the price, then there is a new
balance again. In the end, companies were caught in a price war.
Increased customer value based on the price reduction could backfire. Not
only the price war going on, but the level of corporate profitability will worsen.
Customers who seized because the price is the customers easily move to other
brands as well. Customers who move because the price is a price-sensitive
customers and will not be willing to pay a premium price for a quality hotel.
Finally, the company is difficult to maintain the level of profitability.

35

The mobile industry is somewhat unique. The industry is very sensitive to

economies of scale. Investment and large fixed cost and variable cost is low
making the new players have no choice but must win new customers with guns
"price". In addition, the industry requires a certain number of subscribers to
enable communication on-net or customer-to-customer communication can occur.
So, although many customers are not profitable because of its use are very small,
they are required to create pulses of use for other customers. This is the industry
that is the network.
The alternative to war on a price is to continuously improve the quality,
both in terms of products, services and emotional factors. Telkomsel is in a really
strong position. In quality products such as coverage, signal strength, clarity, and
is already above its competitors. Total customer base of her most becomes its own
defense against competitors. For Telkomsel, it makes sense that they break down
the components of quality in terms of service quality and emotional factors to its
customers. This is definitely a source of customer value that is hard to replicate.
The reason, Telkomsel own customers more precisely. Premium segment, heavy
users, and those who are not price sensitive, most are already customers of this
operator. Most of them will not waver to offer low prices. See customer segments,
it is appropriate that Telkomsel relies on the services as a source for creating
customer value. When the price war began to subside, then some new players will
improve the quality of products such as network, coverage, and signal strength.
For Telkomsel, by improving the quality of service, it is definitely the position
will be increasingly difficult to pursue.

36

Obviously, the market leader will have a variety of problems. One of them
is the need to determine exactly, what service attributes that need to be focused at
this time. In customer value always happen migration. What used to be considered
good by customers, in a few years will become the norm for all competitors can
provide similar things.
Plus, the mobile industry is a fast moving industry. Internet era will soon
change the face of the industry. Therefore, for any company, the vital thing is to
look at business processes and value chain. Changes in customer value will be
very easily adapted by companies that own organization, human resources, and
systems and appropriate technologies. If so, the view that customer value is a
simple concept is proven. Complex is how to build a company that is able to
continually innovate new customer value.
According to an article online by Seravine (2011) explains that there are 3
stages in customer value management:
1. Right Customers (Acquisition)
cycle starts from the customer value management: determining who the
customer is considered "valuable" for our company. The customer is a repeat
customer who will do business with our company. Customers are not the one
all the same. Even customers who have a high value was not necessarily going
to benefit us.
The best source of information about the customers you want is a thorough
analysis of your current customers. (Because of course we've got their
data)

37

The analysis of the customer is able to reveal the hidden characteristics

and trends that affect value. Maybe some customers considered to have a

low value because they only make purchases slightly.

It also can be seen from the frequency of customer purchases, customers
may have the value of life is very high, because they make small purchases
on a regular basis every week for a long time, this in-depth understanding
of who your best customers and why, you can go after new customers,
your business can be more profitable. Or it could be a classic customer
from the analysis - check the loyalty and profitability of customers who
have joined at different times through different channels - add insight into
where your best customers. Perhaps customers who sign up for a sale price
went quickly, while those who joined after attending a seminar be

teaching.
2. Right Relationship (Development)
Customer Relations course is very important and need to be considered.

The exact relationship is to maximize customer lifetime value.

Improve Customer Relationships have the main purpose of increasing the
number of frequencies of consumer purchases, and increase the time they
buy product. If a marketer cannot know the duration of the relationship
until the relationship ended, then they use a measure of loyalty to estimate

how long customers will stay.

To increase customer value, marketers must understand the difference
between

their

customers,

because

every

customer

has

certain

characteristics, eg in terms of their demands and the need to keep track of

how each individual develops over time.

38

Lifetime value of customers who make purchases on a regular basis over

the past ten years will be significantly better than the same customer

makes a purchase for only five years.

The company that developed the ability to follow changes in the value of
individual customers can guard against competitive attacks and respond
quickly to changing customer behavior in order to maintain and develop

customer value.
3. Right Retention (Keeping Valuable Customer)
Retaining customers effectively means to retain customers a truly precise. ,
Managers need to focus on their retention measures to customers who do have
a lifetime value of eminence. Retention of the right eye of the profitable
customers stems from knowing which individuals are most valuable, and why.
After identifying customer worth keeping, managers should ensure that their
retention strategy is used to maintain the value and not to reduce the value of
the customer. One reason that loyal customers are more profitable because
they generally tend to be less price sensitive eye. Therefore, companies mainly
managers must maintain customer loyalty, with a variety of ways eg by
providing incentives other than price, such as better service, etc. ,
There are several steps you can take to maintain customer:
1. Differentiation Strategy.
By offering something different than its competitors, so that customers can
distinguish terms of quality., so our products can have more value.
Example: There used to be firm Emery Airfreight, which is the largest
courier service and they serve all types of shipping. Then there are also
Federal Express, which only offer small packaging delivery overnight. The
differences between them are: overnight. The result? FedEx delivery

39

services managed to become the most successful in the world, while

Emery instead bankrupt.
2. Community.
To strengthen relationships with customers, could form a community of
joint customers. Examples of Customer Services via the Internet, or create
a web that can be visited by the customer, with the service, customers can
socialize. Communities could be one strong marketing tool in maintaining
customer loyalty if utilized optimally.
3. Internal Controls.
Enforce employees well. If employees are treated poorly, then they will
equally apply to the customers. Ensure that employees understand the
industry, competitive trends, and customer data. Employees who have
confidence in the role that brought, it would be more productive.
4. Handling complaint.
Definitely in business activities, there are complaints from customers. The
better the company handling the complaint, the consumer will be more
trust. Examples: customer complaints about food, then immediately
addressed, for example by replacing other foods that are newer.
2.3.3. Customer Satisfaction
Definition The word satisfaction derived from language Latin "satis"
which means pretty good, adequate and meaningful, General understanding on the
satisfaction or customer dissatisfaction is the result of the difference-the difference
between the expectations of consumers with the performance perceived by the
consumer. From the various definitions of customer satisfaction which has been
researched and defined by marketing experts, it can be concluded that customer
satisfaction is a response to consumer behavior evaluation form after purchasing

40

the goods or services he feels (product performance) compared with consumer

expectations.
Consumer satisfaction is highly dependent on the perceptions and
expectations of consumers themselves. Factors that influence the perceptions and
expectations of consumers when making purchases of goods or services is the
need and desire felt by the consumer when purchasing goods or services, past
experience when consuming goods or services and the experiences of friends who
have consume goods or services and advertising.
In a competitive environment, indicators that can show customer
satisfaction is whether consumers will buy back and use the product at a time
when that will come. As for some sense of customer satisfaction, according to the
researchers are the following:
1. According to Kotler (2003:138), Satisfaction is feeling happy or disappointed
someone who emerged after comparing the perception or impression of the
performance or the result of a product and its expectations. Thus, satisfaction
is a function of the perception or impression of the performance and
expectations. If performance is below expectations, the customer is not
satisfied. If performance meets the expectations of our customers are satisfied.
If the performance exceeds the expectations of our customers are very
satisfied or happy. The key to generate customer loyalty is to provide high
customer value.
2. Consumer satisfaction is the level of consumers' feelings after comparing
between what is received and hope (Umar, 2006: 65). A customer, if satisfied

41

with the value provided by the product or service, it is very likely to become a
customer for a long time.
3. According to Hadi (2007: 75) definition of satisfaction are response or
feedback regarding the fulfillment of the needs of consumers. Contentment is
the assessment of the characteristic or feature products or services, or the
product itself, which provides consumers the level of excitement associated
with the fulfillment of consumption needs of consumers. Consumer
satisfaction can be created through quality, service and value. Because
customer satisfaction is highly dependent on the perceptions and expectations
of customers, then as a supplier of products need to know the factors that
influence it. According to Hadi there are four factors that influence the
perceptions and expectations of customers, as follows:
What is heard customers from other customers (word of mouth
communication) .Where this is a potential factor that determines the
expectation customers. As an example, a customer has a company that is
expected to provide the highest quality service based on the

recommendation of friends or neighbors

The customer expectation is very dependent on the individual

characteristics which personal needs (personnel needs).

Past experience in using the service can also affect the level of customer

expectations.
Communication with external parties (external communication) of service
providers play a key role in shaping customer expectations. Based
External communication, company service providers can deliver messages
directly or indirectly to customers. As an example of the influence of the
external communication is the price at which the cost of servicing a very
important role in shaping customer expectations.

42

Source: Sudharto P Hadi (2007)

Figure 2.3 Customer Satisfaction Model

Furthermore, According to Irawan (2014: 37), the factors - factors that
drive customer satisfaction are as follows:
1. The quality of the product, the customer is satisfied that after buying and using
the product turned out good quality products.
2. The price, for customers who are sensitive, usually cheap price is an important
source of satisfaction because customers will get value for money is high.
3. Service quality, satisfaction with the quality of services is usually difficult to
imitate. Quality of service is a driver that has many dimensions, one of which
is popular is SERVQUAL.

43

4. Emotional Factor, customers will be satisfied (proud) for their emotional value
provided by the brand of the product.
5. Cost and convenience, customers will be more satisfied if relatively easy,
convenient and efficient in getting a product or service.
Customer satisfaction measurement methods according to Tjiptono,
(2007:104):
1. The system of complaints and suggestions
Organization

based

customer

(Customer

Centered)

provides

ample

opportunity to its customers to submit suggestions and complaints. This

information can provide great ideas for the company and enable it to respond
and react quickly to address the problems that arise.
2. Ghost shopping
One way to get a picture of customer satisfaction is to hire some people to act
or behave as a potential buyer, then report its findings about the strengths and
weaknesses of the company's products and competitors based on their
experience in purchasing these products. Besides the ghost shopper can also
observe how each complaint.
3. Lost customer analysis
Companies should contact customers who have stopped buying or who have
moved supplier in order to understand why it happened. Not only exit
interviews are necessary, but monitoring is also important customer loss rate,

44

increased customer loss rate shows the failure of the company in satisfying
customers.
4. Customer satisfaction survey.
Generally, research on customer satisfaction survey conducted by the research,
either by post, telephone or direct interviews. The Company will obtain
responses and feedback directly from customers and also give a sign (signal)
is positive that the company pay attention to its customers.
Satisfying customer needs is the desire of every company. In addition to
the factors important for the survival of the company, to satisfy the needs of
consumers can increase competitive advantage. Consumers who are satisfied with
the products and services are likely to buy back the products and reuse services at
the same time needs to reappear later. This means satisfaction is a key factor for
consumers to make repeat purchases which represent the largest portion of the
company's sales volume.
2.4. How Marketing Create Value
Customer value is any value which benefits the customer and increases his
aspiration to purchase the product again which he has purchased marketing helps
the customer in selecting the product which he aspires to purchase. A customer
doesn't have idea what is important for himself. he checks out through products
which are marketed in the product and purchases them by tallying with what is
suitable to him and how the product is useful in his daily activities.
For any organization that must compete for customers, there is a real need
to have a viable and strong marketing effort. Unfortunately, marketing may not

45

get the attention it deserves by senior level management. Given the new
challenges confronting most organizations, finding and keeping customers has
become mission critical. And traditional approaches to marketing, such as
introducing more products or increasing advertising, may not add value. A valueadded approach to marketing is much more complex than traditional approaches.
In today's world, customers are scarce not products and classic
marketing needs to be deconstructed, redefined, and broadened to reflect this new
reality. It calls for a fundamental rethinking of corporate strategy to enable the
ongoing creation and delivery of superior value for customers in both the
marketplace and the market space. And it appoints marketing as the lead driver in
shaping and implementing this strategy, One way to get more out of marketing is
to elevate marketing into your strategic process. In fact, your strategy should be
dominated by marketing since customers drive so much of what a business does.
And when you create more value for your customers than your competition, then
you have a more sustainable future. Another key part of creating value through
marketing is through alliances and partnerships. In order to execute across the
entire marketing chain (supplies, public relations, advertising, product innovation,
etc.), you must align yourself with some critical partners. Just like building a great
sports team, you need highly talented players that can execute on their part of the
marketing mix. This will require strong collaboration within everyone, connecting
the knowledge in a way that marketing is now fully integrated as opposed to
fragmented silos of activity. Fragmented pieces of marketing are less value added
since too many errors and miscommunication problems take place in the absence
of a single, cohesive effort. Once again, you can think of it in terms of a sports

46

team where everyone on the field clearly understands how they must execute.
Marketing is a matching process, one that pairs the capabilities of a company and
the wants of the customers. What is the unique value that you will create? What
steps will you need to take to create this unique value? What steps will you need
to take to insure that you continue to have a competitive advantage
Finally, the companys marketing effort will need to have processes in
place to monitor and react quickly to changes demanded by your customers. One
way to accomplish this is to fall back on your integrated marketing chain since
this is an invaluable source of knowledge. By tapping into this knowledge, you
begin to manage the entire process. This is commonly referred to as Customer
Relationship Management or CRM. CRM is the process by which you learn about
opportunities on how you can add value to customers in the chain (supplier,
vendor, end-user of products and services). And as long as you can create and
build more value, then you are creating value through your marketing effort.
Customer relationship management (CRM) can be the single strongest
weapon you have as a manager to ensure that customers become and remain loyal.
Implementing CRM is nonnegotiable in today's business environment. Whether
your customers are internal or external, consumers or businesses, whether they
connect with you electronically or face to face, from across the globe or across
town, CRM is your ticket to success.
2.5. How Marketing Create Customer Satisfaction
Customer satisfaction can help your business to achieve a sustainable
competitive advantage. Its about understanding the way a customer feels after

47

purchasing a product or service and, in particular, whether or not that product or

service met the customers expectations.
Customers primarily form their expectations through past purchasing
experiences, word-of-mouth from family, friends and colleagues and information
delivered through marketing activities, such as advertising or public relations. If
the customers expectation isnt met, they will be dissatisfied and its very likely
they will tell others about their experience. Do not underestimate the value of
customer satisfaction. Its becoming an important area of competition.
Improved relations with customers seems to be one important factor to
maintain the customer loyalty. Relationships are nurtured not just a short-term
relationship, but a long-term relationship. To achieve this goal, the company is not
only focused on sales transactions only, but long term relationships with
consumers and customers. Thus, Relationship Marketing approach needs to be
applied in the company.
Relationship Marketing (Marketing Relational) is irrelevant to the
discussion in the marketing of services, given the involvement of and interaction
between customers and service providers are so high in most business services.
According Lupiyoadi (2006: 72), Relationship marketing is a way of marketing
efforts on customers that improve the company's long-term growth and maximum
customer satisfaction. Good customer is an asset in which they are handled and
served well will provide income and long-term growth of a company.
Tandjung (2014: 89) states that, "Relationship marketing is the growth,
development, and maintenance in the long term lead to cost-effective relationship

48

with customers, suppliers, employees and other partners mutually beneficial".

Relationship marketing is a practice of building long-term relationships that
satisfy the key stakeholders include customers, suppliers, and distributors in order
to maintain long-term business preferences.
According to Chan (2013: 87), "Relationship marketing is aimed at
creating recognition for each customer more closely through two-way
communication with managing a mutually beneficial relationship between the
customer and the company".
Relationship marketing is an introduction to each customer's efforts more
closely, creating a two-way communication with customers and manage
relationships with each other between the customer and the consumer.
Relationship marketing is a dynamic concept, customer behavior is a major
component to determine the direction of relationship marketing policy from time
to time is always changing.
Relationship marketing is an interaction that is important in running a
business. As revealed Ford (2013: 38), "Relationship as the pattern of interactions
and the mutual conditioning of behaviors over time, between company and a
customer, a supplier or another organization". That is, patterns of interaction and
the favorable conditions between companies and consumers, suppliers, or other
organization. The Company will strive to implement strategies to attract the
attention of consumers, suppliers, and maintain members, as well as managing
relationships with customers, suppliers and other companies. Moreover, this

49

concept is an attempt to build a more constructive relationship with elected

members in achieving long-term marketing success.
There are some core concepts of relationship marketing, among others,
according to Kotler (2003) are as follows:
1. Horizon Long-Term Orientation
Is the main characteristic relationship marketing. Relationship marketing
success is measured by how long it takes customers maintained in the
relationship with the company. Thus the relationship marketing is also about
the estimated value of the value of the whole life of consumers.
2. Commitment and Fulfillment of Promises
To be able to establish a long term relationship, relationship marketing
emphasizes the maintenance of the attitude of trust or confidence,
commitment, to maintain the integrity of each through fulfillment or
reciprocity, empathy between the two sides.
3. Share of Consumers Not Market Share
Relationship marketing is no longer at a concentration on achieving market
share but in an effort to retain customers.
4. Value Customers Throughout Life
Companies need to identify potential customers to establish long-term
relationships and then calculate the lifetime value of the customer (Customer
Lifetime Value - CLV) in order to benefit the company.

50

5. Dialog Two Directions

To achieve the desired relationship, it would require two-way communication.
6. Customization
Relationship marketing provides a better understanding of the demands and
desires of consumers, thereby enabling the supply of products according to
customer specifications.
According to Ford (2013) Relationship Marketing can grow in three ways,
namely: Interaction customer relationship, starting from the first contact between
a group with other groups, where interaction is a two-way communication.
Coordinating activities, interaction between two different companies requires the
coordination of the activities supporting natural relations. Adaptions, the main
core of the business done by the company is to create mutual satisfaction. No
association was conducted without any adaptation for adaptation can create
favorable conditions.
2.6. Theoretical Framework
The most similar thesis to this study is a thesis written by Rahmawati
(2009) with the title Marketing Mix effects on effective level of customer
demand. Keeping in mind that the marketing efforts by a company have the
direct impact on customer decision or demands on the products the company is
selling. The marketing job is to deliver, advertise, and setting price that will be
suitable for the customer to whether do a transaction or actually spending money.

51

Figure 2.4. Theoretical Framework

And the relation between marketing mix and customer satisfaction and
customer value is undoubtedly crucial, retracing that customer is the one who
decide whether a product is worth on spending the money on, or not. Based on
what the company promoting in the medias. And how the company markets it to
the hand of customers, how a company promise a product to the customers.
2.7. Hypothesis
Hypothesis is a proposed explanation for a phenomenon, it is an educated
guess about how things work. Therefore, the writer tries to compose the
hypothesis based on problem statements and research backgrounds as mentioned
in the last chapter: if a company fail to market a product, then there are possibility
of bringing the companies towards failure of creating satisfaction for the
customers, and undoubtedly create no value.