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Question: Academic Marketing Essay
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Marketing Essay Assignment
Academic Essay
Introduction
The marketing concept is about satisfying needs and wants: “Organisations that best satisfy the needs of their customers are best placed to satisfy their own needs” (Fanning, 2015, p. 12). There are three marketing objectives that are common to all organisations:
- Financial objectives;
- Strategic objects; and
- Communication objectives (Fanning, 2015, p. 9).
Fanning (2015) describes three mega-marketing concepts within the marketing concept theory: the buyer decision process, the circle of satisfaction, and the total product concept. The circle of satisfaction describes eight sub-concepts that lead to organisational satisfaction. This paper describes three of these sub-concepts in depth: Product qualities, value, and loyal behaviour.
The contemporary definition of marketing is “an iterative process where an organisation works with & adapts to the market & then through the process of communicating, creating, distributing, promoting, and pricing products endeavours to facilitate profitable exchange relationships with customers, channel partners, & society” (Fanning, 2015, p. 13).
Fanning’s handout, Marketing unpacked (2015), has been used as a basis for the concepts discussed herein, with discussions and conclusions supported by several blogs, journals, books, and academic articles.
Discussion
The circle of satisfaction is the link that holds together the buyer decision process and the total product concept (Fanning, 2015, p. 45). The circle describes eight sub-concepts that lead to organisational satisfaction (see figure 1).
An overview of the circle: People search for potential products and services to meet their wants and needs. This search will include criteria around what value the product or services must have to the person searching. During the transaction and once it is made, the customer assesses their satisfaction, and so will the organisation. If the transaction between the two parties recurs and is deemed to be satisfactory, a cumulative satisfaction is developed and satisfaction increases to the point of trust. Trust means that the parties involved expect a favourable outcome each time a transaction is made. This can lead to loyal behaviour and a different type of relationship can occur – one where the customer may expect a different outcome from the transaction, such as loyalty points and discounts. Loyal behaviour from customers can lead to organisational competitive advantage – customers will stick with their brand and will not go elsewhere. This can lead to increased profitability and a satisfactory outcome for the organisation (Fanning, 2015).
At any stage within the circle of satisfaction, a customer (potential or otherwise) may not be satisfied with their experience. There are many points of customer contact that can cause potential failure to satisfy needs and wants and maybe even cause dissatisfaction (Robinson, 2009). Satisfied and dissatisfied people will share their experiences and this can have a positive or negative effect on business outcomes (Fanning, 2015).
Social media has an impact on how fast and far word-of-mouth travels. Companies have had to adjust the way complaints are managed as result in order to prevent or reduce damage to their brand and to attempt to repair and reconcile with the complainant in order to keep them as a customer (Evans, 2014).
Qualities make and break the brand
W. Edwards Deming (1982) described the consumer as the most important part of production (p. 5) and determined that quality begins at the top of business hierarchy, with the intent to achieve the level of quality expected by consumers. Products are not the only items against which quality is assessed; service quality predicts how satisfied a customer will be with their experience (Setó-Pamies, 2012). Indeed, TIO (2014) reports the number one complaint against telecommunications companies relates to customer service, not the product.
Quality is often defined by the individual (Garvin, 1987) and is likely to impact the monetary value they place on a purchase (Fanning, 2015, p. 106). Garvin (1987) describes eight quality characteristics:-
- Performance
- Features
- Reliability
- Conformance
- Durability
- Serviceability
- Aesthetics
- Perceived quality
He states that companies cannot achieve all characteristics simultaneously, and that the improvement of a single characteristic could be to the detriment of another (Garvin, 1987). This was experienced by The Coca-Cola Company who, on April 23, 1985, relaunched their Coke drink with a changed formula which launched a public outcry (Conversations Staff, 2012). It resulted in the company reversing its decision and quickly relaunching Coke (July 1985) in its original formula (Conversations Staff, 2012). The Coca-Cola Company learned many things at that time, the first being that it wasn’t the quality of their product that needed to be improved.
Some companies have built their brands around perceptions of being top quality. Toyota, Sony, and Volkswagen are examples of brand names that are publicly synonymous with quality. All three of these examples are from countries that are also synonymous with quality; Toyota and Sony are from Japan – considered to be the birthplace of total quality management (Mandal, 2009), and Volkswagen is from Germany; a country world-renowned for engineering excellence. This is important to note, because wen these brands make a quality mistake, they do not simply disappoint their consumers, but the reputation of their country as well (Chambers, 2015).
Expectations of quality should not be underestimated. Search qualities are estimated prior to a purchase being made (Fanning, 2015, p. 48) they are some of the first consumer considerations within the buyer decision process. Suspects and prospects are unlikely to become customers if their product searches predict qualities that are undesirable or are less than adequate.
Value justifies the relationship
The definition of the word value can include principles beliefs and standards; monetary value (value for money); and having value (a desirability or worth) (Fanning, 2015).
Product marketing requires that a profitable exchange relationship exists with customers, channel partners and society (Fanning, 2015, p. 13). Profits are not solely financial in nature. The value of a relationship between B2B, B2C, and business to society are considered part of the sustainability of relationships formed (Fanning, 2015, p. 14). Some relationships are short-lived, perhaps a one-off encounter with no further need for contact (a tourist buying a drink from a stall at the side of the road), other relationships can be strategic in nature and sufficiently valuable to sustain over a long period (an organisation partnering with another organisation to strengthen the brand or buying/selling power).
Perception of value varies from one person to another and is dependent on needs (Chapman, 2014). Maslow’s hierarchy of needs originally cited five stages of need and determined that each stage must be fulfilled before the next need could be met.
Herzberg disagreed with this assertion and argued that people want to be satisfied at several stages at once (Lian Chan & Baum, 2007). Society is made up of a mixture of people with differing needs and wants; it is important for organisations to communicate to those in the market who are most likely to need and want what they are offering in order to attract and retain the customers most likely to recognise the value offered (Fanning, 2015).
People need different things for different reasons and are willing to go to great lengths and pay differing prices to get the value they want. A good example is the new Apple product release strategies that see faithful consumers lining up outside Apple stores for many hours (often overnight) in order to be the first to purchase the new product. Oftentimes, the brand faithful are early adopters and are subject to price skimming, however, they see value in the transaction because their needs are psychogenic or perhaps even hedonic in nature (Collins, 2012).
The value of a product changes throughout its lifecycle and will attract different stage adopters (Rogers, 2003). Rogers asserts that a crucial communication gatekeeping decision is to diffuse an innovation to potential adopters. Some organisations, however, have a strict consumer image in mind and as part of its strategy will not communicate with potential adopters outside of its market (Lutz, 2013). Lutz reported Abercrombie & Fitch did not want unattractive, overweight, women wearing their clothing, believing the value of the brand would diminish to their core customers if they were to sell to less attractive people.
This suggests that Abercrombie & Fitch is ignoring the requirement for society to profit from the organisation; society’s perceptions of beauty are changing and consumers increasingly demand fair treatment for all without discrimination (Lutz, 2013).
Brand loyalty works both ways
When employees are not treated well it shows in their provision of service (Heskett, Jones, Loveman, W. Earl Sasser, & Schlesinger, 2008). Heskett, Jones, Loveman, Sasser, and Schlesinger state that corporate culture should be centred on customers and employees (2008). Morgan (2015) agrees and determines that investment in employee experience provides business benefits on Wall Street.
Employee/company loyalty is a symbiotic relationship (Phillips, 2003). When some or all employees are not loyal to the company image it can have a massive impact on brand quality perception. Volkswagen (VW) is a recent example. A USA university study has uncovered a lie that has been knowingly told by VW, on a global scale, regarding the emissions of its diesel vehicles (WVU, 2015). The VW brand is built on a history of product quality and service excellence, and has developed loyal customers through company fleet vehicles and individual purchasers. It is likely that the company will have to make a financial payout to all consumers affected, as well as fines within every country that sets a standard for emissions in vehicles (Farrell, 2015). Loyal partners are already assessing their on-going relationship with VW and the impact a future relationship may have on their brand (Farrell, 2015). VW will no doubt be counting the cost of the lie against any profits made from it and any future profits lost because of it.
Communication objectives are important in attracting, retaining, and enhancing the relationship with customers (Fanning, 2015). Loyalty requires trust which is borne of a relationship with an organisation. It could be said that frequency of purchase is a measure of loyalty, but only if there are comparative alternatives available (Fanning, 2015). Once a trust is broken, customers are less likely to remain loyal to a company and are more likely to become dissatisfied and tell their social circle not to purchase from the company (Fanning, 2015).
When loyalty works best, there is a symbiotic relationship between consumer and seller, with the consumer advocating a brand (Williams, 2015). Williams argues that loyalty can be increased by providing opportunities for customer advocacy (2015).
Satisfaction does not necessarily lead to loyalty (Robinson, 2009) however dissatisfied customers are not likely to be loyal if there are competing alternatives.
Conclusions
The circle of satisfaction describes the many stages a relationship can go through between a company and its suppliers, customers, and society as a whole. Marketing requires that this link between the buyer decision process and the total product concept is given the planning and attention it needs. It is, as with all things marketing, an iterative process with multiple entry and exit points to consider.
It chases the consumer tales that are told during each stage of the buyer decision process and the long term and cumulative experiences of internal business processes and product evaluations.
Satisfaction is the measure of all marketing efforts and is the evaluation of the consumer process.
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Solution:
Introduction
Marketing is defined as the action of moving an organization’s product from the concept stage to the consumer through promotion strategies including but not limited to advertising and market research (Pride and Ferrel, 2016). There are five main objectives for marketing:
- To increase market share
- To determine customer needs and satisfy them
- To increase a product’s demand
- To create goodwill and improve an organization’s public image
- To generate profits (Hoffman and Bateson, 2010)
Marketing is one of the main building blocks of a business alongside finance and operations. Sales, the strength of a brand and eventually the level of demand among others is directly affected by the effectiveness of marketing. In the past marketing was pegged to four main Ps; promotion, pricing, place and product. Philip Kotler coined the term mega marketing asserting that marketing contained a lot more concepts than the four Ps and advocating especially for the consideration of extra Ps including public relations and power.
The following essay however looks into one of the deeper concepts of mega marketing; the total product concept. This concept was introduced in 1980 by Theodore Levitt. The total product concept as the name suggests, involves the analysis of a market and product in order to make sales more effective (Srinivasan et al., 2012). This concept outlines four main dimensions that should be applied by organizations in order to better understand the market and the product. The four dimensions are the expected, the generic, the potential product and the augmented. The purpose of the essay is to analyse the total product concept as a viable marketing strategy by outlining its dimensions and determining how they apply in a business context. A product usually has many features that must be exploited to provide value for customers and consequently maximize profits. Most basically marketers must ensure that the product they promote satisfies the wants and needs of the organization’s customers. This is based on the understanding that consumers buy solutions to problems in the form of products. The following is an analysis of the total product concept in this regard (Srinivasan et al., 2012).
The Total Product Concept
Product is one of the Ps of the marketing mix and usually makes up the main agenda of marketing. It embodies the whole solution to consumer needs that the organization comes up with and it therefore makes sense to analyse the product as the foundational basis of marketing. The following is the breakdown of the total product concept according to the four dimensions that govern it according to its founder Theodore Levitt.
The Core Product
The core product is the most important and basic level of the total product concept. At this stage the marketer simply examines and looks into the needs and wants of the organization’s customers. This determines what the products main attributes will be. The designer should list all the needs they want the product to meet and ensure that these are in tandem with the consumers’ wants and needs. For instance, a mobile phone can perform the basic functions of making phone calls and receiving phone calls, but the consumer may want other functions such as the ability to make video calls, a camera, a calculator and the ability to access the internet. The core product would be the ability to communicate and would remain standard throughout the marketing process. The core product is determined by the dominant factor or benefit that a consumer expects when they purchase a product (Noseworthy, Cotte and Lee, 2011). The core product determines how successful the marketing of the product will be as it outlines the benefits that the consumer gets. In order for the product to stay ahead of competition the core product must meet the needs of the consumer holistically and in essence in a much better dimension that substitute products. The core product remains the same in spite of other changes that may be made to the consumer.
The Expected
The expected product as the name suggests simply refers to what the customer expects when they purchase a product. These are the attributes that fulfil the customer’s most basic need from the consumer’s point of view (Kuratko, 2016). For instance, when a customer purchases a mobile phone, they expect the phone should have the capacity to store contacts, autocorrect messages and notify the owner of any missed calls among other expectations. These expectations are sort of an enabling extension of the core product and even though they are not mentioned in the core product needs, they are expected to be incorporated as support functions. They are basic expectations that sort of go without saying depending on the nature of the product. Marketers must pay attention to expected attributes as these often determine the perception of quality even though they are not the core function. For instance, a mobile phone with very little capacity for storing many contacts may be perceived as lacking in quality compared to one with a huge capacity for contacts storage. An MP3 player with clearer sound will be considered better quality than one with unclear sound. Many product providers have in the past used these to differentiate their products through branding and marketing. For instance a camera with more mega pixels that a competitor’s camera will likely have this quality printed on its packaging.
The Augmented Product
The augmented product entails additional attributes that may not necessarily be core attributes catering to the needs of the consumer but which offer additional benefits for the purchaser (Dinnie, 2015). For instance, a mobile phone’s basic functions are making and receiving calls, and basically allowing communication. However, a mobile phone may have a torch, a camera, a calculator, games, mp3 player and recorder as additional benefits. In fact, these are sometimes used to differentiate different products in terms of quality and price. The more benefits a product has at the least changes in price, the more attractive the product is to the consumer. This way, producers can differentiate their products from competitors too. In some cases, the augmented product may entail additional services that are not necessarily part of the product such as a warranty, after sales services, home delivery and free assembly. The augmented product is used as a differentiation technique; much like packaging and it gives the manufacturer or supplier competitive edge especially in cases where they are all selling similar products. Eventually augmentation turns into expectation as consumers begin to expect these additional benefits the more producers offer them. For instance, the warranty in most cases especially when it comes to electronics has become an expected product where once it was considered an additional benefit.
The Potential Product
The potential product is what the product can eventually become after improvements have been made on the original creation. At this level in most cases, possibilities are endless. This stage involves sometimes incorporating augmented products into the product as a permanent component (Boone and Kurtz, 2013). Using the mobile phone as an example, the possibilities have proved endless. Once upon a time, the mobile phone was a bulky gadget that made and received calls. Over time, it has been made smaller and many of the augmented benefits such calculators, FM radio, and ability to connect to the internet is now expected benefits. The mobile phone bears so many possibilities for improvement and features keep improving from time to time. Today, mobile phones can be used to make conference calls, store eBooks and play music among so many other functions. The potential product represents the innovative stage of product analysis and in many cases the future of the organization in terms of product quality and relevance.
The total product concept does not cover the entire marketing concept but it certainly makes up a very integral part of the marketing process. It is important to realize that at the end of the day, the only important link between an organization and its consumers is their ability to effectively meet a certain need. The total product concept makes it a priority for the organization to ensure that they are promoting quality and not just quantity (Armstrong et al., 2014). While it is easy to create demand through advertising and offering promotional discounts, loyalty is only attained through offering quality products to consumers. They may respond to advertisement and promotion but long term success in marketing is determined by the product’s quality. If marketers are keen on ensuring that they effectively apply the total product concept, then they can attract return business and gradually build a loyal customer base and grow the organization’s brand.
To better understand how this is achieved, producers need to understand the concept of trust and loyalty and the role these play in ensuring return business. Trust basically refers to a consumer’s expectation that their interaction with an organization will be favourable. Loyalty on the other hand refers to the consumer’s choice to stick to the organization’s brand for the long haul. Loyalty directly develops from trust, and trust develops from an organization’s ability to meet the consumer’s expectations all the time without fail (Skalen and Hackley, 2011). Market research is an integral part of the total product concept as it determines the level of understanding that manufacturers and marketers have in regards to the needs of the organization. Knowledge is power, and as such, consumer intelligence is a huge part of successfully applying the total product concept. This is especially the case because needs, preferences and trends change all the time depending on any number of factors. Consumers may not want the same core functions in a product that they wanted a year ago. Using mobile phones as an example again, today’s business world requires mobile phones that can perform business functions such as send and receive emails, and support basic computer functions such as Microsoft excel and Microsoft word among others. This was once an augmented benefit but is fast becoming a need in some circles. The manufacturer can only know this is they research accordingly.
Conclusion
The total product concept as seen above entails the analysis of the market and product in regard to its ability to effectively satisfy the needs of the consumer. The total product concept is broken down into four main dimensions; the core product, the expected product, the augmented product and the potential product. The core product fulfils the needs of the consumer at the most basic level. The expected product refers to the consumers’ expectations when they purchase a product. The augmented product is simply a combination of the additional benefits that an organization adds to the product to differentiate it from competitor products. In many cases, especially if all producers begin to offer the same additional benefits, augmentation eventually turns into expectation. The potential product represents the product’s future improvements in response to new wants and needs and in some cases in order to stay ahead of competition. This concept thrives on thorough market research because in order to pattern a product after certain need satisfactory attributes, the producer must be aware of what the consumer needs and how they would rather this need was met. In addition to market research, the marketer must understand that the product forms an integral part of the marketing mix and determines whether or not consumers trust the organization and their level of loyalty in future. The total product concept can therefore be viewed as a determinant of an organization’s ability to build a loyal customer base and grow their market share, which would consequently grow their profits.
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