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Question 1

“Customer Value and Satisfaction” is one unit of the five core marketplace concepts used in
understanding the marketplace and consumer needs. Another of the core marketplace
concepts is the customer needs, wants and demands, market offerings, exchanges,
transactions and relationships and markets.

The customer needs, wants and demand is a basic concept of human life. Human needs are
states of felt deprivation. Needs can be including the physical, social and individual. For
example in the physical needs are food, clothing, shelter and safety. The social need is
belonging and affection and also example of an individual is learning, knowledge, and self-
expression. Want are the form of needs as shaped by culture and the individual personality.
For example, if a person in Japan needs food but wants rice, sashimi, and green tea.
Demand is the desired for specific products supported by the ability and willingness to buy.
The desire to be supported if the request purchasing power. Given their wants and
resources, people demand products with benefits that add up to the most value and
satisfaction.

The market offering is through the customer needs, wants and demands. Market offering are
some combination of products, services, information or experiences offered to markets that
satisfy a need or want. They are not limited to physical products. They also include services,
activities or benefits offered for sale that are essentially intangible and do not result in the
ownership of anything. Market offering also include a persons, places, organizations,
information, and ideas. The marketing myopia is the mistake of paying more attention to the
specific products a company offers than to the benefits and experiences produced by these
products. This can make the seller suffer. They focus on the ‘wants’ and lose sight of the
‘needs’.

In the exchanges, transactions and relationships is one of the core marketplace concepts.
Exchanges are the act of obtaining a desired object from someone by offering something in
return. One exchange is not the goal; relationships with several exchanges are the goal.
Relationships are built through delivering value and satisfaction. In the exchange have
several condition must be satisfied is the at least two parties must participate and each must
have something of value to offer the other, each party must want to deal with the other party
and free to accept or reject the other’s offer and each party must be able to communicate
and deliver. Marketing consists of actions build and maintain relationships with target
audiences involving an idea, products, services or other object. Marketers want to build
strong relationships by consistently delivering superior customer value. Transaction in a
monetary is a trade between two parties that involves at least two things of value, agreed
upon conditions, a time of agreement and a place of agreement. For example, you pay a
retailer $2000 for a plasma TV or a hotel $120 a night for a room. For barter transaction is
might trade your old refrigerator in return for a neighbor’s second hand TV set.

The last of core marketplace concept is a market. Market is the set of actual and potential
buyers of a product. A market is seeking buyers that are profitable. These people share a
need or want that can be satisfied through exchange relationships. For example of core
marketing activities such as product development, research, communication, distribution,
pricing, and service.

Of the five core concepts is there one concept that stands out as being more important than
any of the others. I choose concept is the customer value and satisfaction. Customer value
and satisfaction are key building blocks for developing and managing customer relationships.
Customer value is the different between the values the customer gains from owning and
using a product and the costs of obtaining the product. For example, Volvo S40 customers
gain a number of benefits. Among these are reliability and outstanding safety and security.
However, customers may also receive some status and image values. Customer satisfaction
is a person’s feeling of pleasure resulting from comparing a product’s perceived performance
relative to his or her expectation. If the product’s performance falls short of the customer’s
expectations, the buyer is dissatisfied. If performance matches expectations, the buyer is
satisfied. If performance exceeds expectation, the buyer is delighted. Delighted customers
not only make repeat purchases, they become ‘customer evangelists’ who tells others about
their good experiences with the product.

Question 2
The selling concept is the idea that consumers will not buy enough of the firm’s products
unless it undertakes a large-scale selling and promotion effort. Most firms practice the selling
concept when they have overcapacity. The concept is also typically practiced with unsought
goods – those that buyers do not normally think of buying, such as insurance or blood
donation. This concept is also practiced in the non-profit area. It focuses on creating sales
transactions rather than on building long-term, profitable customer relationships. The aim is
to sell what the company makes rather than making what the market want.

The marketing concept is the marketing management philosophy that achieving


organizational goals depends on knowing the needs and wants of target markets and
delivering the desired satisfactions better than competitors do. Under this concept, customer
focus and value are the paths to sales and profits. It views marketing not as “hunting”, but as
“gardening”. The job is not to find the right customers for your product, but to find the right
products for your customers. We can take an example of head and shoulders shampoo. It
first came in a standard packing and formula. However, with the passage of time the
company realized the needs of the consumers and modified their product and brought in
variety in their shampoo line.

In contrast, the marketing concept takes an outside-in perspective. The marketing concept
starts with a well-defined market, focuses on customer needs, and integrates all the
marketing activities that affect customers. In turn, it yields profits by creating lasting
relationships with the right customers based on customer value and satisfaction. Many
successful and well-known global companies have adopted the marketing concept.

The selling concept takes an inside-in perspective. It starts with the factory, focuses on the
company’s existing products, and calls for heavy selling and promotion to obtain profitable
sales. It focuses primarily on customer conquest-getting short-term sales with little concern
about who buys or why.
This below figure is the contrasts between the sales concept and the marketing concept.
Starting point Focus Means Ends

Factory Product Selling and Profit through


promotion sales volume
THE SELLING CONCEPT

Integrated Profit through


Target Customer
marketing customer
market needs
satisfaction

THE MARKETING CONCEPT

Question 3

SWOT analysis is a simple framework for generating strategic alternatives from a situation
analysis. It is applicable to either the corporate level or the business unit level and frequently
appears in marketing plan. SWOT stands for Strengths, Weaknesses, Opportunities, and
Threats. The General Electric Growth Council used this form of analysis in the 1980's.
Because it concentrates on the issues that potentially have the most impact, the SWOT
analysis is useful when a very limited amount of time is available to address a complex
strategic situation. The strengths are attributes of the person or company that are helpful to
achieving the objectives. But the weakness is attributes of the person or company that are
harmful to achieving the objectives. The opportunities an external conditions that are helpful
to achieving the objectives. The threats also an external conditions which could do damage
to the objectives.
I perform the SWOT analysis for Pizza Hut Restaurant.

In the Strengths, Pizza Hut is an international franchise and restaurant chain having
presence in many countries and is originally based in Texas, USA. The company specializes
in the American-style pizza that till to date no other pizza restaurant has been able to
compete. The company also offers many other food items and side dishes like breadsticks,
wings, garlic bread etc. Pizza Hut is one of the largest restaurant chains in the world and is a
sub brand of Yum! Brands, Inc. The Pizza Hut owns and runs about 34,000 restaurants,
provides home delivery services and also has kiosks in more than hundred countries. Pizza
Hut with a large market share and a strong network has become a market leader in United
Kingdom. The restaurants offer a large variety and types of pizzas under one roof and are
known for its innovative pizzas. The marketing of the company is strength of the company.
They have many media partners and use television advertising that attracts people of various
ages. The company has a huge market share; more customers mean higher percentage in
sales that leads to greater profits. Pizza Hut faces very low competition. The company has
some strong competitors like dominos pizza, but Pizza Hut has an advantage because of its
strong network, restaurant outlets and delivery service. The company has well differentiated
its products and has a large loyal customer base.

In the Weakness, the loyal customers of Pizza hut feel that there is a decline in satisfaction
and other pizza chains and restaurants are offering much more. There are some internal
conflicts within the company as there processes are computerized and centralized. This has
lead to high turnover as well as de-motivation of staff.

In the Opportunities, the company can come up with innovative Pizzas, new flavors and
recipes with different types of crusts and sizes etc. The company can open its restaurants in
different countries that have potential customers for example it can expand its network in
India, Pakistan, Bangladesh etc. The company can even introduce new, healthy and fresh
food items related to pizza for example they can introduce fresh pizzas. The people are
these days more concerned about their health and pizza hut can meet this need by
introducing fresh and healthy pizzas.

The last SWOT analysis is Threats, the competition in the Pizza industry is increasing, as
customers now prefer and look for availability and affordability. The rising prices of special
ingredients like cheese, used in pizzas. The company faces serious threats from other
international restaurant chains like KFC, McDonalds, Dominos pizza etc. McDonalds even
tried to introduce pizza in its product portfolio called McPizza. Besides these competitors the
local restaurants that provide pizzas offer food item at more affordable prices as well as know
the taste of the local people better. Many of its competitors are trying to capture the market
share of the Pizza hut by introducing similar kind of pizzas and food items.

Question 4
Marketing ethics is the area of applied ethics which deals with the moral principles behind the
operation and regulation of marketing. An ethical dilemmas involves a situation that is morally
problematic and makes a person question what is the 'right' or 'wrong' thing to do. Ethical
dilemmas make individuals think about their obligations, duties or responsibilities. These
dilemmas can be highly complex and difficult to resolve. Easier dilemmas involve a right
versus wrong answer. The vast majority of people will agree, for example, that it is morally
unacceptable to pretend that someone else's work is our own. However, the complex ethical
dilemmas involve a decision between right and right.

Rarely is there the individual who does not encounter an ethical or moral dilemma at some
point in his or her business life. Whether that individual is the owner of a multinational
corporation, a small business entrepreneur, or a new or established employee, everyone is
likely to have to face such an instance eventually. Much like a personal ethical dilemma, an
individual is faced with making a decision based on how it will affect not only himself, but on
how it will effect the organization as a whole. One of the major problems when dealing with
an ethical dilemma in business is that individuals are often swayed by business profits and
the legality of a decision.

The Institute of Business Ethics, whose slogan is "doing business ethically makes for better
business", describes the term business ethics as such. Business ethics is the application of
ethical values to business behavior. It applies to any and all aspects of business conduct,
from boardroom strategies and how companies treat their suppliers to sales techniques and
accounting practices. Ethics goes beyond the legal requirements for a company and is,
therefore, discretionary. Business ethics applies to the conduct of individuals and to the
conduct of the organization as a whole. It is about how a company does its business, how it
behaves intrinsically.

As clear as this definition is, it is certainly open to interpretation. Therefore it must be


understood that the application of business ethics to any situation is entirely subjective.
One can also understand business ethics, and ethics of any kind, as applying a sense of
fairness to a situation. Even with a sense of clarity applied to the use of business ethics,
reaching a just and moral decision can be a complex process for most individuals. The
subject of business ethics has been a source of great debate in recent years as the heads of
major (and minor) corporations are revealed as less than ethical characters both in the way
they do business and in their personal conduct. However, it may be said that any individual
who does not practice business ethics cannot be personally ethical even though the reverse
may not also be true.

Ethics in generally has a long history of applications. Centuries ago a man's ethical practices
defined who he was as an individual. However, as populations grew, the necessity for
incorporating the best business practices into a company became somehow less important
because there was always another customer around the corner and the owner of a business
was rarely the focus of attention in a community the way he or she may have been in the
past. A company's administration took a seat in the background and hired representatives to
deal with any fallout.

Ethics rely on several factors, one of the most important of which is culture. Again, like the
business person of the past, a culture's ethics practices will largely depend upon the value
that is placed on them. Business ethics have the unappealing conflict of often being contrary
to what is legal. Often what is "right" is not necessarily what is legal, and a business must
consider this conflict when making ethical judgments. Although there are many in the
business world who believes that a business has no room for ethics if it is to function
competitively, the numbers of corporate whistleblowers indicate that there is still room for
ethics in business.

Western societies place a great deal of emphasis on success. However, in business, there
are often conflicts between ethical behavior and business success. This disparity is often
multiplied for the small business owner. To compete with larger businesses, it may be
tempting to abandon ethics just to make an adequate profit. Additionally, the small business
person is relatively autonomous in his or her decision making; he or she does not have to
answer to a large employee base or a corporate governing board. It is also interesting to note
that the small business leader often has his or her decisions impact a greater number of
individuals than does the employee of the small business.
For instance, a small business owner may have his or her decision affect his or her customer
base as well as his or her employee base. The employee will likely find that his or her
decision will only directly impact his or her immediate circle of coworkers. However, the
pressure to succeed is both an internal and an external pressure and often leads individuals
to make ethical decisions that are based more on those pressures than their own moral
judgment. As consumers grow wary of those that they do business with, one must
understand that there is just cause for such wariness. The cynical American consumer has
learned, often the hard way, that there is little room in business for ethics. In a society where
the customer used to be king, the consumer has more often than not experienced several
distasteful experiences with business both large and small.

Some experts argue that any focus on profitability is bound to test the limits of ethical
practices. They assert that to assume that the primary function of a business is to serve its
client base in an ethical manner is idealistic and that the nature of a free economy dictates
that ethics must take a back seat to increasing profits. Although it is rarely the conscious
intent of a business to harm the public interest, reality dictates that the businesses ability to
increase profits will determine its success. Publicly owned companies experience extra
pressure in this arena. It is difficult to draw investors to a company based on its ethics.
Investors are looking for a return on their investment and ethical performance does not equal
dollars. There are economists that assert that, in any competitive economy, ethics are
impossible to uphold; that a company can legitimately bypass ethics with the excuse that
unethical practices are the only way to make a profit.

Unlike the larger corporations, the small business leader is in a unique position to shape the
ethical practices of his or her business. Small businesses have a smaller employee base to
police when applying ethical policies than do larger businesses. It is important to understand
that, similar to the ethical dilemmas of the large corporations, although an individual surely
knows the difference between the correct ethical decision and the wrong road, the choice to
throw ethics to the wind is often made because the unethical choice is more profitable. This
may, however, happen much less often in smaller organizations because the individual or
individuals who are harmed by the unethical decision and someone is always harmed, and is
more visible to the small business. Major corporations and their decision making machines
are often far removed from the individuals that their immoral and/or unethical decisions
effect. This may make the wrong decision much easier to make.

The unique position that the small business owner is in regarding the formation of an ethics
policy yields a great responsibility. A proactive business leader formulates a statement of
organizational values that employees of the company are expected to embrace - at least
while performing duties in the service of the company. An organizational ethics policy is an
announcement to the employees, the customer base and the community as a whole that the
business is prepared to conduct itself and its practices on an ethical level. Such statements
invite the respect of all parties involved in doing business with such an entity. However, it is
imperative that the small business owner not make the same mistake that larger
organizations often do; the ethical policies that a business develops must not be in conflict
with the organizational goals. It is unethical in itself to develop an ethical policy that an
employee cannot possibly follow and maintain his or her employment. When faced with the
decision between an ethical decision and his or her job, an employee will almost always
choose the job.

Therefore the policy must be in reasonable alignment with the organizational goals of the
business. It is equally important, and maybe more so, that the small business leader lead by
example. Employees, especially in a smaller organization, are less likely to conduct
themselves ethically if they receive implicit permission not to. The end result of such a
practice is that the small business owner can be assured that he or she is conducting
business in a manner that encourages the trust of his or her customers as well as his or her
employees. And since consumers have become very wary of doing business with an entity
they feel they cannot trust, the small business can enjoy the profits of a loyal customer base.
The small business owner has an advantage over the larger corporations in that it can elicit
the trust of the consumer by applying ethical business practices that give the customer the
feel of an equal business relationship rather than one where the consumer buys based on
need alone. There are many that believe that such practices are capable of drawing business
away from the large corporate entities and back into a customer-focused business format.

Question 5
The marketing mix is the set of controllable, tactical marketing tools that the firm blends to
produce the response it wants in the target market. The marketing mix consists of everything
the firm can do to influence the demand for its product. The many possibilities can be
collected into four groups of variables known as the “four Ps”: product, price, place and
promotion.

The product is the physical product or service offered to the consumer. In the case of
physical products, it also refers to any services or conveniences that are part of the offering.
Product decisions include aspects such as function, appearance, packaging, service,
warranty, etc.

Pricing decisions should take into account profit margins and the probable pricing response
of competitors. Pricing includes not only the list price, but also discounts, financing, and other
options such as leasing.

Place (or placement) decisions are those associated with channels of distribution that serve
as the means for getting the product to the target customers. The distribution system
performs transactional, logistical, and facilitating functions. Distribution decisions include
market coverage, channel member selection, logistics, and levels of service.
Promotion decisions are those related to communicating and selling to potential consumers.
Since these costs can be large in proportion to the product price, a break-even analysis
should be performed when making promotion decisions. It is useful to know the value of a
customer in order to determine whether additional customers are worth the cost of acquiring
them. Promotion decisions involve advertising, public relations, media types, etc.

The firm is considering the four Cs rather than the 4Ps. Firstly is consumer wants and need
to versus products. You can't develop products and then try to sell them to a mass market.
You have to study consumer wants and needs and then attract consumers one by one with
something each one wants. Author of the movie Field of Dreams, J.P. Cancilla may have
exclusive rights to the phrase "build it and they will come". In most cases, you have to find
out what people want and then "build" it for them, their way.
Secondly is cost to satisfy versus price. You have to realize that price - measured in dollars -
is one part of the cost to satisfy. If you sell hamburgers, for example, you have to consider
the cost of driving to your restaurant, the cost of conscience of eating meat, etc. One of the
most difficult places to be in the business world is the retailer selling at the lowest price. If
you rely strictly on price to compete you are vulnerable to competition - in the long term.

Thirdly is convenience to buy versus price. You must think of convenience to buy instead of
place. You have to know how each subset of the market prefers to buy - on the Internet, from
a catalogue, on the phone, using credit cards, etc. Lands’ End clothing, Amazon Books and
Dell Computers are just a few businesses that do very well over the Internet.

Lastly is communication versus promotion. You have to consider the communication instead
of promotion. Promotion is manipulative (ouch!) - it’s from the seller. Communication requires
a give and take between the buyer and seller (that's nicer). Be creative and you can make
any advertising "interactive". Use phone numbers, your web site address, etc. to help here.
And listen to your customers when they are "with" you. Developing a brand takes into
account these considerations. Developing a brand is developing a promise. When you take
into consideration the "4 C’s" noted above you begin the process of developing a brand!
Custom Fit Communications follows the "4 C's" approach when developing strategy for our
clients.

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