Customer Satisfaction

• Customer satisfaction is the extent to which a firm fulfills a consumer’s needs, desires, and expectations

• As some needs are met, others may become more important

• Expectations may change based on experiences– Satisfying experiences may lead to increasing

expectations– Disappointing experiences may reduce expectations– Expectations may be realistic or unrealistic

What Is Marketing?

• MICRO-MARKETING:– the performance of activities that seek to accomplish an organization's

objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producers to customer or client

• MACRO-MARKETING:– a social process that directs an economy's flow of goods and services

from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society

• AMA COMMITTEE DEFINITION:– marketing is the process of planning and executing conception, pricing,

promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives

Economic Systems

Marketing-DirectedEconomic Systems

PlannedEconomic Systems

Consumer choices are the invisible hand that

guides the economy

Government plannersdecide what consumers

should get

Micro-Macro Dilemma

• Micro-macro dilemma: what is "good" for some producers and consumers may not be good for society as a whole.

• Examples:– some consumers want handguns, but guns can be dangerous– all terrain vehicles are fun for some people, but may result in

injuries or damage to wilderness areas– non-returnable soft drink bottles are convenient, but sometimes

result in litter and dangerous broken glass along highways.– repairing an old air-conditioning system might save the owner

money, but might require continued use of ozone depleting fluorocarbons (used as coolant)

Stages of Economic Development

• 1. Self-supporting agriculture

• 2. Preindustrial or commercial

• 3. Primary manufacturing

• 4. Nondurable and semidurable consumer products manufacturing

• 5. Capital equipment and consumer durable products manufacturing

• 6. Exporting manufactured products

Nations’ Macro-Marketing Systems Are Connected

• Economic growth has prompted more international trade

• World Trade Organization (WTO)

– Only international body dealing with the rules of trade between nations

– Replaced the General Agreement on Tariffs and Trade (GATT)

• Tariffs and quotas may reduce trade

Economies of Scale

• Economies of Scale: as a company produces larger numbers of a particular product, the cost for each of these products goes down.

• Facilitated by mass production

• Facilitated by mass distribution

• Not always possible (for example, in labor intensive services)

• Flexible production--to meet varying or changing needs--may be more important than economies of scale in creating real customer value

Facilitators

• Ad agencies

• Marketing research firms

• Information technology suppliers

• Product testing labs

• Public warehouses

• Transporting specialists

• Financial institutions

• . . . and others

Some Criticisms of Marketing

• Some criticisms focus on micro-marketing and some focus on the whole macro-marketing system:– "Too many ads are annoying, misleading, or

both."– "There are too many unnecessary products."– "Middlemen raise prices but don't add value."– "Marketing makes people materialistic."

• Many criticisms result from misunderstandings about marketing!

Marketing Orientation

• Trying to carry out the marketing concept

• Maintaining a customer orientation

– All departments work together guided by customer needs

– Focus on profit objective (or other overall objective)

– NOT just trying to "unload" what the firm has produced