Professional Documents
Culture Documents
INTRODUCTION
C
ustomer-orientation (CO) focuses on creating superior customer value
based on knowledge derived from customer and competitor analysis
(Day 1994; Kohli and Jaworski, 1990). It is positively related with
core business competency including brand image, technology and its
monitoring and new product service development, financial management,
human resource management, organizational communication etc. (Sin et
al., 2000; Stump, Athaide and Joshi, 2002). A firm can achieve distinct
market advantages by renewing its emphasis on customer value-creation
strategies by delivering superior quality products and services, improving
market intelligence generation, designing customized product and price.
Price-quality product strategies can significantly improve firm performance
but may have only a temporary effect on market share compared to long-
term impact on sale generated by distribution, advertising and promotion
(Srinivasan and Bass, 2000 Dobni and Luffman, 2003; Franses et al.,
2000).
OBJECTIVES
Customer demand for the new product depends ,in part, on whether
customers know the new product and find it valuable (Aldrich & Fiol,
1994). Given that people are typically uncertainty averse (Kahneman &
Tversky, 1979), an entrepreneur needs to resolve some of the uncertainty
surrounding market demand by possessing knowledge about variables such
as demographic profile, buying motive, buying habits etc. before integrating
enabling technologies, managerial capability, and stakeholder support
necessary for full-scale exploitation of production facilities. Thus,
Objective 1: To assess the extent of interlinkage of respondents demographic
profile with the marketing mix of SSIs.
Customers are value maximisers (Kotler, 2001) and their satisfaction leads
to repeat sale, reduces the product obsolescence, encourages rational
business, build corporate image, ensures viability and thereby helps in
accelerating and sustaining firms survival (Lanning, 1998; Porter 1985).
Strong companies develop superior capabilities in managing core business
processes such as new product realization, inventory management, customer
acquisition and retention, regular remittance, customer service, separate
research and development cell (Kotler 2001; Madasamy and Xavier 2002).
Objective 2: To measure customer satisfaction with regard to marketing-
mix of SSIs.
Theoretical perspectives substantiated by empirical evidence suggests
production orientation based transaction cost economies (Coase, 1937),
pass a portion of the profit margin advantage on to customers in the form of
lower prices. A portion is also typically retained by the firm, which results
in economic rents and superior performance. The broad based exploratory
studies (Gronross, 1982; Parasuraman, Zeithaml and Berry, 1985) have
suggested that service quality stems from a comparison of what customers
feel a seller should offer (i.e. their expectations) with the sellers actual
service performance. Recent studies have established positive relationship
between service quality improvement and customer behavioural intentions
(Parasuraman et al., 1985, 2002).
Objective 3: To assess the impact of price and quality on the demand for
SSI products.
As markets are becoming fiercely contested, the marketers are forced to
deploy innovative promotion mix to maintain and expand sales. In view of
sky rocketing promotional budgets, top U.S.A advertisers have shifted the
strategic focus of campaigns from long term image building to short-term
performance (Advertising Age, 1987). This shift of focus by the marketers
is labeled as feeding the discount promotion monster (Rapp and Collins
1990) and includes a variety of tools such as sampling, price package,
refunds, value packs, contests, premium, tie-ins and coupons based on
psychographic, demographic, behavioural traits and choice strategy of
customer (Blattberg and Scott, 1990).
Objective 4: To examine the correlates of socio-economic status of
respondents and promotional mix of SSIs.
Physical distribution is becoming customer oriented and aimed at bringing
instantly, costless, seamlessly and frictionless products to consumers
(Hvolby et al. 2001; Bowersox and Closs, 1996; Cooper et al., 1997).
Though constraint by absence of framework to establish a alliance among
supply chain partners, lack of trust inside and outside a company, lack of
tools to measure the effectiveness of a supply chain alliance etc. (Lambert
and Cooper 2000, Stern et al. 1996 Lancioni et al. 2000, Porter 2001),
consumer socio-demographic is vital in its design and flow.
Objective 5 : To investigate the effects of socio-demographic of respondents
on the physical distribution network of SSIs.
equal to one were extracted from the responses given by customers each in
product and promotion-mix, four factors in price-mix and six factors in
distribution-mix (Kakati and Dhar, 2002). Rest of the factors missed
minimum Eigen value fixed for the analysis. Variables with extremely low
communalities were deleted explaining loadings of less than (FL < 0.5)
and other with greater communalities were accepted indicating their strong
interconnectedness with other variables.
Table 1: Summary of Results Showing Factor Loadings and Variance
Explained From Scale Purification (Using Rotated Compound Method)
M arketing- F a c t o r -w ise dim e n s i o n Factor %
m ix variables loading V ariance
explained
Product First factor 23.65%
Products of SSI are worth buying. .85
P e r f o r m a n ce o f S S I p r o d u c t s i s g o o d . .79
SSI units are quite satisfactory. .75
On the whole SSI products are good. .60 18.57%
Second factor
S S I p r o d u c t s h a v e e s t a b l i s h e d t h e i r o w n i m a g e a n d identity. .76
Packing material used by SSI units is good. .73
Third factor
S S I p r o d u c t s a r e a ttractive. .74 14.7%
SSI units do not cause pollution problem .58
SSI products are of good quality in comparison even
w ith the national brands. .56
Total variance explained 56.92%
Price First fa c t o r 21.14%
Prices charged relate with the value delivered. .80
Price of SSI products match with their quality. .71
On the whole the aforesaid pricing issues in SSI products are well
m anaged. .69
SSI products are reasonably priced. .64
Second factor 15.58%
Retail price of SSI product is a l w a y s f i x e d . .83
Prices are not frequently changed. .67
Third factor 11.04%
SSI units offer seasonal and quantity discounts on their products. .76 10.87%
Fourth factor
SSI products are stable in price. .82 58.64%
Total variance explained
Promotion First factor 21.44%
SSI units participate effectively in exhibitions. .78
Needed advertisement of SSI products is available. .63
Information about SSI products and the company is accessible to you. .62 16.34%
Second factor
Personal selling e fforts of the salesm e n a r e q u i t e e f f e c t i v e . .82
Sales schemes announced by SSI units are quite motivating. .66 16.25%
Third factor
On the whole you get sufficient and satisfactory information before
purchase. .81
SSI products enjoy positive words of mouth. .64 54.03%
T o t a l v a r i a n c e e x plained
D istribution First factor 15.96%
The staff working with the dealers is customer friendly. .90
Stores provide better services. .82
Dealers behave nicely with the customers. .70
Second factor 15.83%
N ew and improved products of SSI are available at various sales outlets. .82
Products are available at the right time at the right place for the least cost. .88
Third factor 12.83%
Dealers happily pass on additional incentives offered by the SSI units. .79
Proper after sale se rvices are provided by SSI units. .74
Fourth factor 10.17%
Authorised dealers extend all possible services. .65
Fifth factor 9.26%
Products are also available with the wholesalers. .86
Sixth factor 9.08%
Products of SSI are difficult to locate at the market place .85
T o t a l v a r i a n c e e x p l a i n ed 73.14%
Number of iterations = 50
After the varimax rotation, three factors accounted for 56.92 percent of the
total variance in the product-mix, four factors accounted for 58.64 percent
of the total variance in the price-mix, six factors of distribution-mix
accounted for highest variance of 73.14 percent whereas lowest variance
emerged at 54.03 percent with respect to promotion-mix (Table 1). Hence,
the average variance extracted ranged from 54 to 73 percent. The vast
majority of the loadings were in the range of (FL = 0.60) and up and no
item has loadings of less than (FL < 0.50). Other statistical tools viz.,
correlation, averages and chi-square test also provided sound basis for the
selection of sixteen factors.
RELIABILITY AND VALIDITY
To check the reliability of the study and ensuring internal consistency of all
the scale items, split half procedure of Cronbachs Alpha coefficient was
calculated. The total scale reliability was found to be (0.81). The reliability
coefficients obtained from two equal halves were found to be greater and
nearest to (0.50). The first half with reliability coefficient (0.87) met the
criteria as recommended by Nunnally and Bernstein (1994) but the value of
second half (0.48) was found to be less reliable necessitating further
improvement in scale items.
Product = 3.86
Upto 35 Price = 3.86
years (22) Promotion = 3.59
3.82 3.84
Distribution = 4.04
/
Literate 3.84
Product = 3.92
(61) \ Above 35
Price = 3.92
years (39) 4.06
Promotion = 3.86
3.97
Male / Distribution = 4.17
(62) 3.98
\ / Product = 4
Upto 35 Price = 4
Illiterates 4.50 years (1) 4.50
Promotion = 4
(1) \ Distribution = 4
4.00
Sample Above 35 --
--
respondents 3.95 years (-)
(100) --
Product = 4
Upto 35 Price = 4
/ years (12) 3.87 Promotion = 3.83
Distribution = 4
3.96
Literates 3.94
Female (35) \ Above 35
(38) Product = 3.83
years (23) 3.98 Price = 4.13
/
3.93 Promotion = 4
\ Distribution = 4
3.99
Illiterates
(3) Upto 35
/ ---
years (-) --
3.83
\
--
Product = 3.33
Above 35 Price = 4
years (3) 3.83 Promotion = 4
Distribution =4
3.83
Mean scores for all the four variables of marketing-mix were equal and
above average (4.00) as revealed by illiterate males falling up to age group
of 35 years. Promotion optimality was lowly scored at mean value (3.83),
whereas, highest and equal scores went to product adequacy (4.00), price
reasonability (4.00) and place effectiveness (4.00) as judged by literate
females numbering 12 falling up to the age group of 35 years. Literate
females numbering 23 falling above the age group of 35 years placed
price reasonability high at mean score (4.13), place effectiveness and
promotion optimality moderate at mean score (4.00) each and lowest
Journal of Services Research, Volume 6, Number 2 (October 2006 - March 2007)
189 Andotra, Pooja
mean value (3.83) went to the various aspects of product adequacy. Illiterate
females numbering 3 falling above the age level of 35 years provided
highest and equal scores (4.00 each) to price, promotion and place and the
lowest mean value went to the various aspects of product adequacy (3.33).
Thus, the forgoing tables suggest that the status of customer-orientation
has differed significantly according to professional, educational and income
levels of respondents. Overall mean customer orientation among both male
and female customers of SSIs arrived at 3.98 and 3.93 respectively. Males
accorded highest scores to place effectiveness (4.12) followed by product
adequacy (3.9), price reasonability (3.9) and promotional optimality
(3.77). Females accorded highest score to price reasonability (4.08)
followed by place effectiveness (4), promotion optimality (3.95) and
product adequacy (3.84).
Marketing-mix and Extent of Customer- Orientation
The significance of association between socio-economic profile of
consumers and marketing-mix variables measured with the help of statistical
technique of chi-square is given in the table 5. Since the calculated value
of chi-square is less than the table value at 5% level of significance thereby
indicating insignificant association between age, education and profession
and 4Ps of marketing-mix variables of SSIs.
Table 6 depicts thirty-three dimensions of customer-orientation segregated
into two orientation regions. The mean responses reflect high level of customer
orientation with regard to performance (3.99) and attractiveness (4.01) and
image, identity (3.51) and packing (3.94) under product category; reasonable
(3.79) and fixed prices (3.21) and infrequent change in prices (3.29) under
pricing domain; timely information on new and improved products (3.85)
under promotion mix and availability of products with wholesalers (3.79),
efficient and adequate customer services (3.99), convenience in locating
products (4.08) and cooperative and friendly dealers (4.08) in the domain
of distribution mix. These customers expressed least customer orientation
(co) in terms of inconvenient purchase schemes (1.84), infrequent and
ineffective (1.59) promotional communication, lack of sufficient and
informative advertisements (1.59) and personal selling efforts (2.42), and
lack of positive word of mouth (2.99) in the marketing -mix of SSI products.
Thus, there is a need to maintain the present level of effectiveness with
regard to product sale services which have generated above average score
and also more attention has to be given to those which obtained below
average mean values on 5-point Likert scale.
F3 = SSI products are of good quality in comparison F1 = Products of SSI are worth buying (4.02).
even with the national brands (2.71). F2 = Performance of SSI products is good (3.99).
F5= SSI units are quite satisfactory (3.91).
F4 = SSI units do not cause pollution problem F6 = SSI products are attractive (4.01).
(2.16). F7 = SSI products have established their own
image and identity (3.51).
F11 = SSI products are stable in price (2.5). F8 = Packing material used by SSI units is good
(3.94).
F13 = SSI units offer seasonal and quantity F9 = On the whole SSI products are good (3.98).
discounts on their products (2.55). F10 = SSI products are reasonably priced (3.79).
F12 = Price of SSI products match with their
F18 = SSI units participate effectively in quality (3.69).
exhibitions (1.53). F14 = Prices are not frequently changed (3.29).
F15 = Retail price of SSI product is always fixed
F19 = Information about SSI products and the (3.21).
company is accessible to you (1.59). F16 = Prices charged relate with the value delivered
(3.91).
F20 = Needed advertisement of SSI products is F17 = On the whole the aforesaid pricing issues in
available (1.59). SSI products are well managed (3.95).
F24 = On the whole you get sufficient and
F21 = Personal selling efforts of the salesmen are satisfactory information before purchase
quite effective (2.42). (3.85).
F25 = New and improved products of SSIs are
F22 = Sales schemes announced by SSI units are available at various sales outlets (3.96).
quite motivating (1.84). F26 = Stores provide better services (3.99).
F27 = Authorised dealers extend all possible
F23 = SSI products enjoy positive words of mouth services (3.86).
(2.99). F28 = Products are also available with the
wholesalers (3.73).
F29 = Products of SSI are difficult to locate at the
market place (3.13).
F30 = Dealers happily pass on additional incentives
offered by the SSI units (3.17).
F31 = Products are available at the right time at the
right place for the least cost (4.08).
F32 = Dealers behave nicely with the customers
(4.08).
F33 = The staff working with the dealers is customer
friendly (4.04).
1. Price is less
Male 5 Upto school Rusk, Bread, Cement, Surya, Realfood, Jumbo,
level Vanaspati ghee, Cattle Shahzada, Amar
feed
Male 3 College Bread, Desi ghee, Realfood, Sifti, Shahzada,
Vanaspati ghee, Cattle Amar, Jumbo
feed, Cement
Male 1 University Cattle feed, Mustard oil, Amar, Swad, Realfood, Jumbo
Bread, Cement
Female 2 Illiterate Desi ghee, Bread, Rusk, Sifti, Realfood, Surya, Jumbo,
Cement, Fan Air pilot
Female 2 School level Desi ghee, Bread, Rusk, Sifti, Realfood, Surya, Air
Fan, Cement pilot, Jumbo
Sub-total 13
2. Quality is better
2. Quality is better
Male 16 Upto school Cattle feed, Rusk, Cement, Amar and Ujala, Surya, RCI &
level Iron plate, Water tank, Jumbo, MFK, Style, Godrej &
Plywood, Basmati Rice Hindustan, OK & Shree, Ratna
One female consumer educated upto college level and included in the
category of feature-conscious consumers purchased Sifti desi ghee, Swad
mustard oil, Surya rusk and Amar cattle feed brands.
Customer satisfaction is a consequence of service quality having
differential effect over it being a better predictor of behaviour intentions in
the short-term (Dabholkar, 1995; Spreng and Mackoy, 1996). Further, Taylor
and Baker (1994) examined it as a moderating variables in the relationship
between service quality and repurchase intentions which are precisely
determined by perceived value and perceived quality since quality, value,
satisfaction directly affects customer loyalty, positive words of mouth,
price premiums and repurchase intentions (Athanassopoulos, Bernhardt
et al., 2000).
Promotion mix
statements
1. Availability of new and improved product
information at retail outlets. .146 .049 -.028 -.021
2. Effective participation of SSIs in exhibitions. -.142 -.010 .056 -.035
3. Accessibility of SSI product and company
information. -.218 -.108 .200 -.111
4. Availability of needed SSI product
advertisement. -.187 -.013 .193 -.092
5. Effective personal selling efforts of salesmen. .088 .170 .009 .040
6. Motivating sales schemes announced by SSI
units -.082 .021 .156 .033
7. Non-descriptive product labeling. .235 .004 -.212 .069
8. Positive words of mouth for SSI products. .170 .032 .073 .056
9. Availability of satisfactory SSI information
before purchase. -.007 -.110 -.138 .178
10. Reliability of SSI wrapers and labels. -.197 -.241 .027 .087
REFERENCES
Advertising Age (1987) Short-term focus hurts reputation of brands-A survey, 14.Dec,
p.8.
Aldrich, H.E., & Fiol, C.M. (1994) Fools rush in? The institutional context of industry
creation, Academy of Management Review, 19:4, 645-670.
Athanassopoulos, A.D. (2000) Customer satisfaction cues to support market segmentation
and explain switching behaviour, Journal of Business Research, 47:3, 191-207.
Baumgartner, H. and Steenkamp, J.B.E.M. (1996) Exploratory consumer behaviour:
Conceptualization and measurement, International Journal of Research in
Marketing, 13: 2, 121-137.
Bernhardt, K.L., Donthu, N. and Kennett, P.A. (2000) A longitudinal analysis of
satisfaction and profitability, Journal of Business Research, 47:2, 161-171.
Blattberg, R.C. and Scott A.N. (1990) Sales Promotion:Concepts,Methods and Strategies,
Prentice Hall, New Jersey.
Bolton, R.N. and Lemon, K.N. (1999) A dynamic model of customer usage as an
antecedent and consequence of satisfaction, Journal of Marketing Research, 36:2,
May, 171-186.
Boxersox, D.J. and Closs, D.J. (1996) Logistical Management: The Integrated Supply
Chain Process, New York: Macmillan.
Bronnenberg, B.J. and Wathieu, L. (1996) Asymmetric promotion effects and brand
positioning, Marketing Science, 15:4, 379-394.
Brucks, M. and Zeithaml, V. (1991) Price and Brand Name as Indicators of Quality
Dimensions: MSI Report, Cambridge, MA, 91-130.
Bucklin, R.E., Russell, G.J. and Srinivasan, V. (1998) A relationship between market
share elasticities and brand switching probabilities, Journal of Marketing Research,
35: February, 99-113.
Capraro, A.J., Broniarczyk, S. and Srivastava, R.K. (2003) Factor influencing the
likelihood of customer defection: The role of consumer knowledge, Journal of the
Academy of Marketing Science, 31:2, 164-75.
Coase, R.C. (1937) The nature of the firm, Economica, 4:16, 386-405.
Cooper, M.C., Lambert D.M. and Pagh, J.D. (1997) Supply chain management: More
than a new name for logistics, International Journal of Logistics Management,
8:1, 1-14.
Dabholkar, P.A. (1995) A Contingency framework for predicting causality between
customer satisfaction and service quality in Frank, R.K. and Sujan, M. (eds.),
Advances in Consumer Research, Provo, UT, Association for Consumer Research,
22, 101-108.
Day, G.S. (1994) The capabilities of market-driven organizations, Journal of Marketing,
58:4, 37-52.
Dobni, C.B. and Luffman, G.L. (2003) Determining the Scope and impact of market
orientation profiles on strategy implementation and performance, Strategic
Management Journal, 24, 577-585.
Dodds, W.B., Monroe, K.B. and Grewal, D. (1991) Effects of Price, Brand and Store
Information on Buyers Product Evaluations, Journal of Marketing Research,
28:August, 307-319.
Kotler, Philips (2001) Marketing Management :The Millenium Edition, New Delhi, Prentice
Hall of India Limited.
Krishnamurthi, L., Mazumdar, L.T. and Raj, S.P. (1992) Asymmetric response to price
in consumer brand choice and purchase quantity decisions, Journal of Consumer
Research, 19:3, 387-400.
Lambert, D.M. and M.C. Cooper, M.C. (2000) Issues in supply chain management,
Industrial Marketing Management, 29:1, 6583.
Lancioni, R.M. Smith and T. Oliva (2000) The role of the internet in supply chain
management, Industrial Marketing Management, 29:1, 45-56.
M.J. Lanning (1998) Delivering Profitable Value Oxford, U.K. Capstone.
Madasamy, V. and Xavier, J.A. (2002) Production and marketing of KVI products in
Virudhunagar district of Tamil Nadu, Indian Journal of Marketing, 12, 23-24.
Mela, C.F., Gupta, S. and Lehmann, D.R. (1997) The Long-term Impact of Promotion
and Advertising on Consumer Brand Choice, Journal of Marketing Research, 34:2,
248-261.
Nunnally, J.C. and Bernstein, I.H. (1994) Psychometric Theory (3rd Edn), New York.,
McGraw-Hill.
Parasuraman, A., V.A. Zeithamal and L. Berry (1985) A conceptual model of service
quality and its implications for future research, Journal of Marketing, 49:4, 41-50.
Payne, J.W., Bettman, J.R. and Johnson, E.J. (1992) Behavioural Decision Research: A
Constructive Processing Perspective, Annual Review of Psychology, 43, 87-131.
Porter, M.E. (1985) Competitive Advantage: Creating and Sustaining Superior
Performance, New York, Free Press.
Porter, M.E. (2001) Strategy and the Internet, Harvard Business Review, 79:3, 62-78.
Rapp, S. and Collins, T. (1990) Great Marketing Turnaround, New Jersey, Prentice Hall.
Robinson, J.P., Shaver, P.R. and Wrightsman, L.S. (1991) Criteria for Scale Selection
and Evaluation in Measures of Personality and Social Psychological Attitudes, in
Robinson, J.P., Shaver, P.R. and Wrightsman, L.S. (eds.), San Diego, Academic
Press.
Roest, H. and Pieters, R.K (1997) The nomological net of perceived service quality,
The International Journal of Service Industry Management, 8: 4, 336-351.
Rust, R.T. and Oliver, R.L. (1994) Service Quality: Insights and Managerial Implications
from the Frontier in Rust, Roland T. and Oliver, Richard L. (eds.), Service Quality:
New Directions in Theory and Practice, New York: Sage Publications.
Schwartz, S.H. (1992) Universals in the Content and Structure of Values: Theoretical
Advances and Empirical Tests in 20 Countries in Zanna, M. (edn.), Advances in
Experimental Social Psychology, Orlando, FL: Academic Press.
Shapiro, C. (1982) Consumer information, product quality and seller reputation, Bell
Journal of Economics, 13:1, 45-65.
Sin, L.Y.M., Tse, A.C.B., Yau, O.H.M., Lee, J. S. Y., Chow, R. and Lau, L.B.Y. (2000)
Market orientation and business performance: An empirical study in mainland China
Journal of Global Marketing, 14:3, 5-29.
Smith, A.K., Bolton, R.N. and Wagner, J. (1999) A model of customer satisfaction with
service encounters involving failure and recovery, Journal of Marketing Research,
36, 356-372.