Customer Quality for Marketing Management Mcom Sem 2 Delhi University

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

Customer Quality for Marketing Management MCOM Sem 2 Delhi University : Production and marketing of goods and services are the essence of economic life in any society. All organizations perform these two basic functions to satisfy their commitments to their stakeholders – the owners, the customers and the society, at large. They create a benefit that economists call utility which is the want-satisfying power of a good or service. There are four basic kinds of utility – form, time, place and ownership utility. Form utility is created when the firm converts raw materials and component inputs into finished goods and services.

Although marketing provides important inputs that specify consumer preference, the organization’s production function is responsible for the actual creation of form utility. Marketing function creates time, place and ownership utilities. Time and place utility occur when consumers find goods and services available when and where they want to purchase them. Online retailers with 24*7 format emphasize time utility. Vending machines focus on providing place utility for people buying snacks and soft drinks. The transfer of title to goods or services at the time of purchase creates ownership utility.

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

What is Marketing?

Continuous exposure to advertising and personal selling leads many people to link marketing and selling, or to think that marketing activities start once goods and services have been produced. While marketing certainly includes selling and advertising, it encompasses much more. Marketing also involves analyzing consumer needs, securing information needed to design and produce goods or services that match buyer expectations and creating and maintaining relationships with customers and suppliers. The following table summarizes the key differences between marketing and selling concepts.

Marketing activities focus on the consumer. Therefore, a market-driven organization begins its overall strategy with a detailed description of its target market: the group of people toward whom the firm decides to direct its marketing efforts. After marketers select a target market, they direct their activities towards profitably satisfying that target segment. Although they must manipulate many variables to reach this goal, marketing decision making can be divided into four areas: product, price, place (distribution) and promotion (marketing communication). These 4 Ps of marketing are referred to as the marketing mix. The 4 Ps blend to fit the needs and preferences of a specific target market. These are the four variables that a marketer can use and control in different combinations to create value for customers. 

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

Importance of the customer satisfaction

Researching customers’ behaviour , the person is used as a factor for making marketing strategies and adapt the marketing mix to their needs. This is the only way for a high – grade satisfaction of the customers’ needs. In the conditions of marketing orientation in the company’s work where the customer is in the focus of its activity knowing the customers’ needs is a condition for an optimal combination and factors for production and the strategy of marketing.

Accomplishment of the economic aims in the process of reproduction, represent high – grade satisfaction of particular customers’ needs. Consumers are subjects that purchase goods and services to satisfy their needs. The consumer behaviour derives from the decision whether, what, when, where and how to purchase goods and services. Therefore, marketing is primarily interested in the behaviour of the subject as a consumer. Nowadays, it is normal to assume that marketing constantly follows the consumer’s needs as a basic assumption in the development of a suitable strategy leading to the consumer’s satisfaction.

It should be taken into consideration that needs are a social category changing all the time and are never satisfied. By setting a suitable strategy based on qualitative information the marketers contribute to the development of a loyal consumer’s category that will lead t a realization of a general strategy, survival and development of the company. Being familiar with the consumers’ needs is of great importance to the company. Economic subjects accomplish their tasks in the process of reproduction and thus satisfy certain needs. The consumers are the focus activity of the company’s marketing orientation, it is crucial to know the consumers’ needs in order to achieve an optimal combination of both: the production factors and the disposal of products. Therefore the research of the of the consumers’ needs and measure his satisfaction is of a great significance.

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

During the process of research, it is important for the company to take into consideration these following components: A variety of needs occur under the influence of certain factor combination. The company must consider these factors when it establishes the extent of the consumer’s needs, which is essential for its activities on the market; needs are dynamic and they change due to the factors that influence them. It means that the businesspersons have to adjust their activities on the market by constant exploration of the factors together with its complexity and direction; and the market division into segments, will be accurate only if the needs are identified; especially their intensity, quality, duration, etc.

The factors form the segments and they condition the needs and the consumption. This approach should allow the company’s marketing programme to adapt to the dynamics of the needs, which means a greater flexibility of certain instruments depending directly on the factors that condition the needs. Management and marketing theorists underscore the importance of customer satisfaction for a business’s success.

Accordingly, the prestigious Malcolm Baldrige National Quality Award recognizes the role of customer satisfaction as the central component of the award process [4]. Some recent statistics demonstrate the benefits of good customer satisfaction and the costs of poor customer satisfaction on businesses. Good customer satisfaction has an effect on the profitability of nearly every business. For example, when customers perceive good product/service, each will typically tell nine to ten people. It is estimated that nearly one half of American business is built upon this informal, “word-of-mouth” communication.

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

Improvement in customer retention by even a few percentage points can increase profits by 25 percent or more. Therefore, businesses that hope to prosper will realize the importance of this concept, putting together a functional and appropriate operational definition. The primary issue with developing an operational definition with the specific components of customer satisfaction is to clearly identify the nature of the organization’s business. A widely accepted definition of ‘satisfaction’ is: ‘Satisfaction is the consumer’s fulfilment response. It is a judgement that a product or service feature, or the product of service itself, provided (or is providing) a pleasurable level of consumption-related fulfilment, including levels of under-or-over fulfilment.

In less ‘technical’ terms: satisfaction is the consumer’s assessment of a product or service in terms of the extent to which that product or service has met his/her needs or expectations. Failure to meet needs and expectations is assumed to result in dissatisfaction with the product or service. Depending on the context, the meaning of ‘consumer satisfaction’ may differ: Consumer satisfaction may relate to a particular feature or characteristic of a product or service, or alternatively it may relate to the product/service as a whole. In general, it is the satisfaction about the product/service as a whole that merits attention, since this satisfaction influences the consumers’ future buying and consuming behaviour.

Yet it is also important to understand the factors that contribute to (dis)satisfaction. Often, dissatisfaction about one particular feature of a service (e.g. the unfriendliness of staff) leads to dissatisfaction about the service as a whole, even if the satisfaction about the other features is high. Another conceptual distinction within measures of consumer satisfaction is whether they relate to satisfaction about a single ‘service encounter’ or rather reflect ‘cumulative satisfaction’.

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

Objectives of customer satisfaction programs:

measuring and tracking satisfaction; developing profiles of strengths and weaknesses; determining the relevance of specific performance aspects for global satisfaction and developing a list of actions to increase customer loyalty. The companies have need for measuring satisfaction of their consumers.

Customer satisfaction is an asset that should be monitored and managed just like any physical asset. But, traditional measuring is not adequate, because: Customer complaints: most dissatisfied customers don’t complain, or most complaints don’t reach senior management; Salesforce: selective feedback of information; subjective knowledge based on relationships It is necessary only objective third party surveys provide a reliable customer satisfaction indicator.

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

For monitoring customer satisfaction is necessary :

1. Set up the objectives

2. Determine the target groups

3. Choose the methods of data collection

4. Develop the measurement

5. Analyze and report the data

6. Effective collection, analysis, and application of customer satisfaction information There are several possible uses of information about customer satisfaction.

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

Some include:

1. Customer satisfaction results can help to present the current standing of customer satisfaction. This utilization often goes beyond reporting statistical data such as mean, range, and standard deviation. These descriptive data can assist in identifying specific strengths and weaknesses in satisfaction dimensions, the specific items under each, as well as information about overall scores. However, different types of data analysis can be used to identify not only aggregate but also individual information. From here emerges the distinct patterns or gaps between different individuals, groups, or among particular items.

2. Customer satisfaction results can help to identify important customer requirements. Identification of the specific customer requirements for achieving satisfaction is useful at a very fundamental level. An organization is able to clearly focus efforts in those areas that are most important to the customer. Distinguishing those requirements most valued by customers allows for pinpointing efforts for service modifications as well as furtherdata collection. Comparisons of specific items to the satisfaction dimension or overall score can assist in determination of those items that are more closely linked with satisfaction.

3. Customer satisfaction results can help to monitor customer satisfaction results over time. Quite simply, the same information gathered at different points in time can assist in identification of trends and patterns that develop as an organization evolves and changes. Furthermore, this can be helpful in demonstrating the levels of effectiveness of interventions, services and so forth at particular points in history. What may work during a certain point in time may not at another. This temporal collection and comparison of information allows for an organization to adapt and modify services and products to meet the changing requirements of its customers.

4. Customer satisfaction results can help to provide comparisons to other organizations. Comparisons either within an organization by department or sub-group as well as with outside agencies can provide a wealth of information. This includes not only structural and organizational strengths and weaknesses, but also effectiveness of product/service components and product/service delivery. This can assist in coordination of planned changes specific to each area, as opposed to general, “blanket” approaches. Also, this can give a perspective of how one organization is performing in relation to others, namely one’s competition. This gives the customer the information necessary to make informed choices and selections.

5. Customer satisfaction results can help to determine the effectiveness of business practices. Data gathered from customer satisfaction studies can provide valuable and accurate information that can assist in evaluation of product/service components and delivery. Products/services can be altered to become more effective, and business practices can be altered to meet the standards of excellence within a certain business. In essence this is the comparison of a particular item against a standard predetermined by the customer. Those scores above the standard are positive, while those below are in need of improvement. This enables more thoughtful and considered prioritization of any possible plans of action.

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

Overview of the process:

1. Project planning

2. Exploratory research

3. Questionnaire design

4. Main survey

5. Analysis and reporting 

The message is clear: customer satisfaction is essential for the success – and continued success – of any business. Not only does positive customer satisfaction help business, but also a lack of satisfaction takes an even bigger toll on the bottom line. For an organization to remain solvent, information regarding customer satisfaction must be adequately collected and analyzed. Measuring based on what’s important to customers.

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

The “dimensions” of service quality are :

1. tangibles : appearance of physical facilities, equipment, personnel, information leaflets

2. reliability: ability to perform the service accurately and dependably

3. responsiveness: willingness to help customers and provide a prompt service

4. assurance: competence: having the requisite skills and knowledge; courtesy; credibility: trustworthiness, believability, honesty of staff; security: freedom from danger, risk and doubt

5. empathy : access: approachability, ease of contact; communication with customers; understanding customers’ needs.

Customer Quality for Marketing Management Mcom Sem 2 Delhi University

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