Mastering Marketing Basics: Essential Concepts and Dimensions

1. The Elements of Marketing Lecturer: Tatyana Trubchenko

2. Basic Terms of Marketing • Human need A state of felt deprivation in a person. • Human want The form that a human need takes when shaped by culture and individual personality. People have almost unlimited wants, but limited resources. They choose products that produce the most satisfaction for their money. • Demand Human wants that are backed by buying power. • Exchange The act of obtaining a desired object from someone by offering something in return.

3. Basic Terms of Marketing • A product is anything that can be offered to satisfy a need or want. • Market The set of actual and potential buyers of a product. • Customer value is the difference between the benefits that the customer gains from owning and/or using a product and the costs of obtaining the product. Costs can be both monetary and nonmonetary. # One of the biggest nonmonetary costs for hospitality customers is time. # Hampton Inn gives value to the overnight traveler by offering a free continental breakfast.

4. Basic Terms of Marketing • Customer Satisfaction A buyer's degree of satisfaction with a product is the consequence of the comparison a buyer makes between the level of the benefits perceivedto have been received after consuming or using a product and the level of benefits expectedprior to purchase.

5. Customer Satisfaction Customer satisfaction results in two major benefits to the firm: • greater loyalty; • positive word-of-mouth communication as customers tell others of their experience. If performance matches expectations, the buyer is satisfied. If performance exceeds expectations, the buyer is delighted. In order to deliver customer satisfaction, an organization has to offer quality in its goods and services.

6. Quality • Quality represents all the dimensions of the product offering that result in benefits to the customer. In the narrowest sense, quality can be defined as "freedom from defects" the American Society for Quality Control defines quality as the totality of features and characteristics of a product or service that bear on its ability to satisfy customer needs. A truly quality-oriented view of customer satisfaction is one that subscribes to providing a level of benefits that exceedsrather than just matches expectations.

7. 8 dimensions of quality: 1. Performance: the basic operating characteristics of a product, such as the prompt delivery of an express package or the clarity of a television picture. 2.Features: the special supplemental characteristics that heighten the use experience, such as free drinks on an airplane trip or optional seat-cover materials in an automobile 3.Reliability: the probability of product failure within a given time frame 4. Conformance: the degree to which a good or service meets established standards, including the timeliness of an airplane arrival or how close a shirt comes to itsstated size

8. 8 dimensions of quality: 5. Durability: the amount of use a product can take before it must be replaced 6. Serviceability: the speed and ease of repair, and the courtesy and competence of service personnel 7. Aesthetics: how a product looks, feels, sounds, tastes, or smells 8. Perceived quality: the quality that is inferred from a seller's reputation (e.g., Maytag washers, Rolex watches) Reference: David Garvin, "Competing on the Eight Dimensions of Quality," Harvard Business Review, November-December 1987, pp. 101-109.

9. 8 dimensions of quality: • Which dimension would be most important to an organization that primarily sells services rather than physical goods?

10. Market orientation Market orientation refers to an organizational perspective that encourages: • the systematic gathering of market intelligence, • dissemination of the intelligence across all organizational units, • a coordinated, organization-wide responsiveness to the intelligence. Reference: Bernard Jaworski and Ajay Kohli, "Market Orientation: Antecedents and Consequences," Journal of Marketing, July 1993, pp. 53-70.

11. Market orientation • A market orientation is the realization that a firm's marketing effort is the business of all departments and functions. • The well-known business philosophy of total quality management offers a similar view. • Market-oriented non-for-profit organizations such as colleges, arts museums, political groups and social-action causes appeared. # Hospitals have began to recognize that patient expect more than just basic health care (friendly nurses, faster service, nicely decorated rooms and etc.)

12. Market orientation • How would you answer the business manager of the local symphony who made the following statement? “At times, I’ve thought about using marketing more in our affairs, but I simply cannot afford the cost of surveys and advertising campaigns. Anyway, people will always come to hear good music. The quality of our programs is the only important consideration.”