Value Creating Activities: Activities creating benefits and utilities to the customers

Value Creating Activities

Value creating activities refer to the activities cornering to create benefits and utilities to the customers. Value creating activities in marketing are very important. The major task of marketing is to create value to the customers. It needs to deliver value to the target customers. It should add maximum value to the customers. If a marketing firm creates value, it can run its business successfully. If not it may disappear from the market. In this reality, the marketing firm should perform value creating activities and deliver the maximum value to the customers for their satisfaction. For this, the firm can use value delivery network concept in marketing.

Value Delivery Network

To be successful a firm also needs to look for competitive advantage beyond its own operations, into the value chains of its suppliers, distributors, and customers. Many companies today have partnered with specific suppliers and distributors to create a superior value delivery network which is also known as supply chain. Value delivery network is building mutually beneficial relationship with key stakeholder to capture the value generated by the supply chain. This network is a set of participating companies or stakeholders who agree upon building mutually beneficial relationship among them for capturing the value generated by the supply chain. It involves partnering with key stakeholders to create superior supply chain.

The value delivery network for sugar can be shown in the following figure:

Value Delivery Network for Clothes

The participating firms of this network are fully aware of each other’s needs and priorities and are prepared in advance to deliver products and services at the right time at a low cost.

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Marketing is seen as the task of creating, promoting and delivering goods

Marketing is seen as the task of creating, promoting and delivering goods and services to consumers and business

Marketing is a term of common usage. In general view, it is related to buying and selling goods produced. But marketing is not only concerned with buying and selling of goods and services. It is that commercial process which attends and facilitates the movement of goods and services through the economy to enlarge and satisfy consumer need consistent with the corporation's fundamental objectives. In other words, marketing is an exchange process between producers and consumers, in which the producer matches a marketing offering (the product or service, plus its promotion, distribution, and price) to the wants and needs of the consumer.

Marketing is the business function that identifies customer's needs and wants, determines which target markets the organization can serve best, and designs appropriate products, services, and programs to serve these markets. However, marketing is much more than just an isolated business function. It is a philosophy that guides the entire organization. The goal of marketing

is to create customer satisfaction profitably by building value-laden relationships with important customers.

Definitely, marketing is seen as the task of creating, promotional and delivering goods and services to consumers and business. Following definitions help to explain it. 

According to E. Jeome McCarthy, "Marketing is 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 producer to customer or client."

In the words of Stanton, Etzel and Walker, "Marketing is a total system of business activities designed to plan, price, promote and distribute want-satisfying products to target markets to achieve organizational objectives."

According to American Marketing Association, "Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals."

According to Philip Kotler, "Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others."

The above definitions emphasize that marketing focuses on activities to satisfy customer. Marketing consists of those activities which are associated with product, price, place and promotion. Marketing is an on-going process of discovering and translating consumer needs and wants into products service through planning, producing and creating demand, serving customer and business demand through planned physical distribution system and expanding markets in the face of keen competition under certain commitments.

Now, we can say that marketing is seen as the task of creating, promotional and delivering goods and services to consumers and business because these are the core function of modern marketing. It focuses on consumer and business needs, coordinates all the activities that will influence consumers and business firms and generates profit by satisfying them.

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Customer Satisfaction and Factor Determining Customer Satisfaction

Customer Satisfaction

Customer satisfaction is a post-purchase outcome where a customer compares the expected benefits with the actual benefit received from the use of product. If the performance of the product fails short of expectation; the customer is dissatisfied. If the performance matches the expectation, the customer is highly satisfied or delighted. Thus, customer satisfaction is a function of performance and expectations. It is the customer's perceived performance from the product in relation to the expectations. Customer expectations are formed by post buying experiences, advice from friends and relatives and marketing promotion and promises.

According to Philip Kotler, "Satisfaction is a person's feeling of pleasure or disappointment resulting from comparing a product's perceived performance in relation to his/her expectations."

Customers should be satisfied by the firm's offering: products and services. High customer satisfaction leads to high customer loyalty. It creates emotional bond of customer with the brand.

Factors Determining Customer Satisfaction

High satisfaction level is required to be created by marketing organizations in order to develop customer loyalty and retain the customer for a long period of time. For this, following factors can be used:

1. Complaint and suggestion systems: A customer-centered organization makes it easy for customers to register suggestions and complaints. Some customer-centered companies are: P&G, General Electric, Whirlpool, etc. They establish hot lines with toll-free numbers. Companies are also using websites an e-mail for quick, two way communications.
2. Customer satisfaction survey: Studies show that although customers are dissatisfied with one out of every four purchases, less than 5 percent will complain. Most customers will buy less or switch suppliers. Responsive companies measure customer satisfaction data, it is also useful to ask additional questions to measure repurchase intention and to measure the likelihood or willingness to recommend the company and brand to others.
3. Ghost shopping: Companies can hire people to pose as potential buyers to report on strong and weak points experienced in buying the company's and competitor's products. These mystery shoppers can even test how the company's sales personnel handle various situations. Managers themselves should leave their offices from time to time, enter company and competitor sales situations where they are unknown, and experience firsthand the treatment they receive. A variant of this is for managers to phone their own company with questions and complaints to see how the calls are handled.
4. Lost customer analysis: Companies should contact customers who have stopped buying or who have switched to another supplier to learn why this happened. Not only is it important to conduct exit interviews when customers first stop buying; it is also necessary to monitor the customer loss rate.

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Societal Marketing Concept and Relevancy in Socio-Economic Environment

Societal Marketing Concept

From the early stage of barter system to the present stage of globalization, various concepts of marketing have developed. They are: the production concept, the product concept, the selling concept, the marketing concept and the societal marketing concept.

Among them the societal marketing concept is an emerging concept. It is the newest of the five marketing management philosophies. The societal marketing concept holds that the firm should determine the needs, wants and interest of target markets. It should then deliver superior value to customers in a way that maintains or improves the customer's and the society's well-being. According to Philip Kotler, "The societal marketing concept calls for a customer orientation backed by integrated marketing aimed at generating customer satisfaction and long-run consumer welfare as the key to attaining long-run profitable volume."

The societal marketing concept evolved out of the movement of consumerism and environmentalism. This concept is whether the pure marketing concept is adequate in an age of environmental problems, resource shortages, rapid population growth, worldwide economic problems and neglected social services. It asks if the firm that sense, serves and satisfies individual wants is always doing what's best for consumers and society in the long-run. According to societal marketing concept, the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare. For example, large expensive automobiles may please their owners but increase air pollution, traffic congestion and parking problems; cigarettes and alcohol satisfy individual desires but create health and law and order problems; detergents ease housewives' laundry problems but destroy the quality of water when recycled for the purposes of irrigation and drinking. Such concerns and conflicts led to the societal marketing concept.

Relevancy of Societal Marketing Concept in the Current Socio-Economic Environment of Nepal

Nepal has experienced significant socio-economic changes over the last few decades. The supply-driven marketing where firms could sell whatever they supplied, is increasingly giving way to demand-driven marketing. Now a days, it is realized that customers and their needs are important in marketing. In this context, there is still a debate on the relevancy of the societal marketing concept in current socio-economic environment of Nepal.

On one hand, in the rural areas of the country the main problem is meeting consumers' basic needs. On the other hand, the urban areas have serious problems of environmental degradation, high level of population, severe problem of drinking water, and may other social problems. A large part of the problems in many cities of Nepal is attributable to irresponsible marketing by many firms. For example, the over use of plastic as packing and packaging material and the discharge of industrial waste in rivers has caused major problems in the cities. In this context, the environmental and consumer rights protection groups and various pressure groups should watch the activities of those firms that are seriously threatening the welfare of the Nepalese consumers as well as society in long-run. In this regard, Nepal Government has already enacted consumer protection act and environment protection act. Nepal's membership of World Trade Organization is likely to promote the societal marketing concept in Nepal. Various multinational companies are also helping to enhance societal marketing concept in Nepal.

But establishing the societal marketing concept in Nepalese marketing organizations is an extremely difficult task because it involves considerable planning; considerable persuasions; considerable educations; considerable reorganization and heavy investment.

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