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CHAPTER -1 INTRODUCTION

IntroductionThe most basic concept underlying marketing is that of human needs. The task of any business is to deliver customer value at a profit. In a hypercompetitive economy with increasingly rational buyers faced with abundant choice, a company can win only by fine tuning the value delivery process and choosing, providing, and communicating superior value. Consumers need and wants are fulfilled through a marketing offer-some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Marketing offers are not limited to physical products. They also included services, activities or benefit offered for sale that are essentially intangible and do not result in the ownership of anything.Services have been studied extensively since 1980s. The idea of linking service value and customer satisfaction has existed for a long time. Customer satisfaction has been studied and recognized as an important factor in the management literature for the past few decades. Studies indicate that there are links among customer satisfaction, customer loyalty, and profitability. During recent years, there have been studies that have established mechanisms that attempt to link customer satisfaction and customer loyalty. Many studies additionally attempt to establish connections between service quality, customer satisfaction, customer loyalty, and profitability. Many organizations spend millions of dollars annually on marketing research because it can be used for various purposes. Marketing researcher can help an organization improve the quality of its customer service, identify new service opportunities and gain a competitive edge over competitors. Service organization can use different approaches to conduct market research. Customer Satisfaction In general, satisfaction is a persons feeling of pleasure of disappointment resulting from comparing a products perceived performance (or outcome) in relation to his or her expectation. Whether the buyer is satisfied after purchase depends on the offers performance in relation to the buyer expectations. If the performance falls short of expectations, the customer is dissatisfied. If the performance matches the expectations, the customer is satisfied. If the performance exceeds the expectations, the customer is highly satisfied or delighted.Developing a customer satisfaction program is not just about carrying out a survey. Surveys provide the reading that shows where attention is required but in many respects, this is the easy part. Very often, major long lasting improvements need a fundamental transformation in the company, probably involving training of the staff, possibly involving cultural change, the result should be financially beneficially with less customer churn, higher market shares premium prices, stronger brands and reputation, and happier staff. However, there is a price to pay for these improvements. Costs will be incurred in the market research survey. Time will be spent working out an action plan. Training may well be required to improve the customer service. The implications of customer satisfaction surveys go far beyond the survey itself and will only be successful if fully supported by the echelons of senior management. Customer satisfaction surveys are often just that surveys of customers without consideration of the views of lost or potential customers. Lapsed customers may have stories to tell about service issues while potential customers are a good source of benchmark data on the competition. If a survey is to embrace non-customers, the compilation of the sample frame is even more difficult. The quality of these sample frames influences the result more than any other factor since they are usually outside the researchers control. The questionnaire design and interpretation are within the control of the researchers and these are subject where they will have considerable experience. Although the customer-centered from seeks to create high customer satisfaction, that is not its ultimate goal. If the company increases customer satisfaction by lowering its price or increasing its services, the result may be lower profits. The company might be able to increase its profitability by mean other than increased satisfaction ( for example, by improving manufacturing processes or investing more in R & D). Spending more to increase customer satisfaction might divert funds from increasing the satisfaction of other partner. Ultimately, the company must operate on the philosophy that it is trying to deliver a high level of customer satisfaction subject to delivering acceptable levels of satisfaction to the other stakeholders, given its total resources. Marketers must be careful to set the right level of expectations. If they set expectations too low, they may satisfy those who buy but fail to attract enough buyers. If they raise expectations too high, buyers will be disappointed. Customer value and customer satisfaction are key building blocks for developing and customer relationship. Many marketers go beyond merely meeting the expectations of customers they aim to delight the customers Customer satisfaction is doing what our customer expects- in a sense, being adequate. Most organization provides adequate service. The do precisely what they say they are going to do not less and, usually, no more. In most of the cases, customer doesnt talk about bad products or services. Instead, they tell anyone who will listen about really bad service or really delightful service. Customer delight goes beyond satisfaction. It ensures that each contact with our customers reinforces their belief that our organization is truly special. The best at what we do. Companies with satisfied customers have good opportunity to convert them into loyal customers, who purchase from those firms over an extended period. Understanding Customer Requirements A major challenge for service providers lies in assessing customer expectations, which are known to change constantly. Customer satisfaction is dependent on the extent to which the service provider is able to meet customer expectation. The satisfaction levels of customers change when either of the two takes place there is change in customer expectations or in the performance of the service provider. Performance of the service provider is within his own control. Therefore, service providers should watch out for changes in the satisfaction levels of customers and respond to the changes accordingly. If there is an increase in customer satisfaction, Companies should make efforts to find out what it is that they are doing right and continue to do it. Conversely , if there is decrease in customer satisfaction, companies should try to identify the faults in the system and rectify them. Customer satisfaction also depends on their perception of a service providers performance. How service providers perceive their own performance may differ from how customers perceive it. Customer dissatisfaction occurs when there is a difference between what the customer desires and the service provider delivers.Customer Expectations Customer expectations play a key role in companys success and have a deeper meaning in service marketing than being more requirements of a customer. They may also involve customers predictions of what will happen in a service encounter or what the customers desire to happen. Customer expectations are based on customers experience with the product or service feedback received from friends, colleagues, and relatives; or may be based on their present needs. At the same time, service organizations cannot offer a completely standardized service as some customer prefer a customized service offering to suit their needs? Types of Service Expectations To deliver quality service, it is essential to understand customer expectations. To assess the quality of service, customer compares their expectations with their perception of service providers performance. If service providers want to gain customers loyalty, they should constantly meet customers expectations by performing consistently. Wrong interpretation of customers expectations will cost the service provider heavily. Therefore, service providers should take due care to minimize lapses in meeting customer expectations. Customer expectations of service can be two types: desired and adequate Desired Service: It is defined as the service that a customer desires and hopes to receive. In other words, the desired service expectations of a customer are a combination of what he/ she feels that a service provider can offer and should offer. Customers are delighted when service performance exceeds their desired service expectation. Desired service expectations of a customer increase when the customer is experienced and has good knowledge of what to expect in the service. However, it is always happen that the desired service expectations of a customer are met or exceeded by the service delivered by service provider. Often, customer has to compromise on their service expectations and accept an adequate level of service, which is slightly lower than the desired level. Adequate service: Adequate service is a minimal level of service that a customer is willing to accept from a service provider and is based on the customer perception of what level of service acceptable to him. Customers are dissatisfied if the service provided by a service provider does not meet the adequate service level expectationsPredicted Service: It is the service level between the desired and adequate service level of a customer and lies in the zone of tolerance. Zone of tolerance: It is the gap between a customers desired service expectations and the adequate service received. This zone varies for each customer and for the same