Introduction to Marketing - Essay Example

? CHAPTER INTRODUCTION 1 Problem Definition Marketing is considered to be one of the pillars of the modern business practices and the theories related to the respective field. Till the middle of the past century, the idea of marketing was limited to the management and accumulation of all the marketing operations in an organization (Felton, 1959). However, the increasing demands of the recent market trends have compelled marketing practices to be focused on the attainment of competitive advantage in the markets. It is due to this transition that marketing has begun to be considered as a strategic management tool to devise and attain long term objectives of the organization. The attainment of goals is possible if the demands of the customers are met and they are ensured that the services and products will be delivered to them in an effective and reliable manner (Kotler et al., 2008). Therefore, it becomes evident for companies to understand their market segments and customers’ demands to ensure that successful businesses are run and they are able to deliver better products and services than their competitors. Fulfillment of customer’s needs is one of the most studied aspects of marketing. Hill et al (2003) explained that customer satisfaction is the degree of fulfillment of the customer’s requirements by an entire product or service from an organization. Customer satisfaction is considered to be the factor that provokes customers to be loyal with their brands and convey a positive image of the company in front of other consumers. Loyal customers can prove to be good publicists for companies. Loyal customers are important assets for any organization since they do not switch brands due to price differences and promotions from the competitors. Customer satisfaction is also known to be a major source for increasing revenues for organizations; therefore, it is aimed to be attained by all organizations to reduce instances of brand shifts and increase market shares. Reicheld & Sasser (1990) studied the service industry and concluded their research with the finding that a 5% increment in the retaining of consumers results in a significant increase of 25% to 125% in the revenues of any company. The concept of retaining customers has resulted in the evolution of relationship marketing. This concept facilitates the attainment of revenues from extended relations with customers and makes the development of customer relations an important strategic aim for the company. However, it also needs to be comprehended that the fulfillment of customer’s requirements is not the sole solution for companies in the modern markets; rather they need to keep them contended and delighted with the products and services. It would not be wrong to state that service quality bears great relevance in attaining contentment and loyalty from the customer’s side. Sportswear selling is a varied and uneven market. Retailing chains in the respective field have recorded a slow but steady rate of growth in the past. Companies are investigating to devise innovative formats and processes to renew their business models and expanding their businesses with greater number of stores. Sports Direct and JD have managed to attain a prominent place in the current market by achieving a commendable market share. Mintel Reports (2009) stated that a promising future can be predicted for the sportswear retailing industry in UK, especially due to the upcoming London Olympics. The marketing strategy that was adopted by Sport Direct involved the implementation of discounts on their retailing items. This strategy helped them to distinguish themselves from the competitors in the market. The quality of their products is comparable to the ones being offered by globally recognized brands like Nike, Adidas and Puma. It is relevant to investigate if marketing strategies, such as lowering the prices of products, plays an important role in the attainment of customer satisfaction. The research shall focus on marketing strategies that attain customer satisfaction for sportswear retailers, like SportsDirect.com and Liverpool One. 1.2 Organizational Background Sports Direct International was founded in 1982. It is known to be the top ranked sports retailer in the respective industry of UK with an approximate turnover of ?1 billion a year (Sports Direct Annual Report, 2008). They have managed to attain the top position by acquiring numerous organizations in the retailing industry. As a result of their enterprising strategies, they own 375 stores in UK and 60 stores globally. The company is known to employ a total of 16,650 individuals in their local and global offices. Their main strategic aim is to provide their customers with effective and quality services and products. A large percentage of their customers are known to shop online through SportsDirect.com. The operations of the company can be classified into two segments; retail and brand. Retail segment involves the operations related to the alignment of all of their retail stores on common platforms and ideologies. Brand segment revolves around the detection, management and improvement of specific types of sports and leisure brands (Reuters, 2010). The organization is responsible for selling, as well as the whole sale distribution of a diverse range of products including, sports products, casual wear, footwear and equipments. These products are either company owned or belong to other licensed companies (Reuters, 2010). Earlier, JJB Sports was considered to be the market leader but their spot was attained in 2006 by the company under discussion. They have been able to attain competitive advantage and greater market share due to the adoption of low prices, while providing commendable quality. Sportsdirect.com is known to sell globally renowned brands like Nike, Adidas, Reebok, Umbro and Fila, as well as their own group trademarks of Everlast, Lonsdale, Dunlop, Slazenger, and Karrimor (Sports Direct Website, 2009). Due to the variety of names under its flag, the organization is able to offer a diverse range of sports attire and other related products. During the economic crises, the company witnessed great increments in their sales since the customers opted to avail discounted prices and deals instead of buying expensive brands. The low-priced range of company owned products greatly benefitted in such times. 1.3 Research Question How does service quality effect customer satisfaction and brand loyalty in the case of Sports Direct? Does the adoption of discounted price strategy by Sports Direct imply that low quality service is expected by the customers? 1.4 Aims and Objectives The research shall focus on the following aim: Identify the level of customer satisfaction in the field of sports retailing, while analyzing the positions of Sports Direct and Liverpool One. The research shall be conducted with the following objectives: To investigate those factors of the service of Sports Direct that result in satisfaction and dissatisfaction of customers. To propose effective measures for the improvement of the service of Sports Direct to enhance customer satisfaction and reduce customer dissatisfaction. To analyze the service standards of Sports Direct to evaluate their level of effectiveness with respect to the fulfillment of the needs of the customers. To devise a relation between the discounted price strategy of Sports Direct with the market segment’s expectation of service quality. Read More