CHAPTER II LITERATURE REVIEW, THEORETICAL FRAMEWORK, …

CHAPTER II LITERATURE REVIEW, THEORETICAL FRAMEWORK, AND

HYPOTHESIS

2.1 Marketing Definition According to Kotler and keller (2006, p.5), Marketing is identifying and

meeting human and social needs. According to Kotler and Armstrong (2010, p.29), Marketing is the process

the company make value for customers and build strong relationship with the customer to capture value from customer as feedback.

According to Peter and Olson (2010, p.4), Marketing is the appropriate philosophy for conducting business. The marketing suggest an organization should satisfy consumer needs and wants to make profits.

From the description above, can show that's marketing is the company activities in identifying and meeting needs from the customer to make strong relationship in order to get return from the customers.

2.2 Marketing Mix According to Kotler and Armstrong (2010, p.76), Marketing mix is the set of

marketing tools (Product, Price, Place and Promotion) that firms use to produce the response to the target market.

Marketing mix consist of everything the firm can do to influence the demand for the product. Marketing Mix is grouped into four major categories (4P); 1) Product means the goods and services combination the company offers to the target market. 2) Price is the amount of money costumers must pay to obtain the product. 3) Place includes company activities that make the product available to target consumers. 4) Promotion means activities that communicate the merits of the product and persuade target customers to buy it.

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Source: Kotler and Armstrong(2010) Figure 2. 1 4 P's of Marketing Mix

2.3 Product

2.3.1 Product Definition

According to Kotler and Armstrong(2012, p.248), Product is anything

that can be offered to a market attention, acquisition, use, or consumption that

might satisfy a want or need.

According to Kotler and Armstrong(2012, p.250), Product fall into

two board classes based on the types of consumers that use them, there are:

1) Consumer Product: A product bought by final consumers for personal

consumption. There are 4 parts of Consumer Product:

?

Convenience goods: A consumer product that customers

usually buy frequently, immediately, and with minimal

comparison and buying effort.

?

Shopping goods: A consumer product that the customer, in the

process of selecting and purchasing, usually compares on such

attributes as suitability, quality, price, and style.

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?

Specialty goods: A consumer product with unique characteristics or

brand identification for which a significant group of buyers is willing

to make a special purchase effort.

?

Unsought goods: A consumer product that the consumer either does

not know about or knows about but does not normally consider

buying.

2) Industrial Product: A product bought by individuals and organizations for

further processing or for use in conducting a business. According to Kotler

and Armstrong (2003, p.408) There are 5 levels of products:

? Core benefit: the basic benefits of a product offered to consumers.

? Basic product: forms the basis of a product that can be perceived by the

senses.

? Expected product: a series of product attributes and the conditions

expected by the buyer when purchasing a product.

? Augmented product: something that distinguishes between the products

offered by the business entity with products offered by competitors.

? Potential product: all arguments and shape changes experienced by a

product in the future.

According to Kotler and Keller (2006, p.345) products can be classified into 3 groups, there are: 1) Consumable goods are tangible goods that normally consumed in one or a few times of use. 2) Durable goods are tangible goods that normally do not run out after a lot of use 3) Services are activities or benefits offered for sale satisfaction

2.3.2 Product Quality According to Kotler and Armstrong(2012, p.254), Product Quality is

the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

According to Bowo, Hoyyi and Mukid(2013), Product quality is a relative measure of a good or service that can give you an idea of how far the level of excellence of a product is able to meet customer desires.

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The quality of products is the understanding that the products offered by sellers have more selling points that are not owned by a competitor product. Therefore, companies are trying to focus on the quality of the product and compare it with the products offered by competing companies.

2.3.3 Dimension of Product Quality According to Durianto (2004, p.38), the concept of the product, the

manufacturer in the product must think through the stages of dimensions, there are: 1) Performance: This dimension is the most basic and related to the primary function of a product. Consumers will be very disappointed when their expectations are not met on this dimension. 2) Reliability: dimensions of performance and reliability cursory look similar but have obvious differences. Shows the probability of reliability over the product fails to perform its functions. 3) Feature: This dimension can be regarded as a secondary aspect. Like the example of electronic products, features - features offered targeted by manufacturers to innovate in an effort to satisfy customers. 4) Durability: a measure of the product cycle, both technically and time. The product called a durable if it has been widely used or has been used for a long time. The first is there durability both technically and durable in time. He are writing. 5) Conformance: This dimension indicates the extent to which a product can match certain standards or specifications. 6) Design: This dimension offers emotional aspect in influencing consumer satisfaction

2.4 Service

2.4.1 Service Definition According to Lovelock and Wirtz (2011, p.37) Services are economic

activities offered by one party to another. Often time-based, performances bring about desired results to recipients, objects, or other assets for which purchasers have responsibility.

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According to Kotler and Armstrong (2012, p.248), Service is an activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything.

From the definition above, Service is an activities that offered by a person to another person to give a satisfaction toward them. So, service should be defined in their own right, not in relation to goods. 2.4.2 Characteristics of Service

Although services are products in a general sense, they have special characteristic and marketing needs. The biggest differences come from the fact that services are essentially intangible and that they are created through direct interactions with customers.

According to Kotler and Armstrong (2012, p.260), there are 4 characteristics of service: ? Intangibility: Services cannot be seen, tasted, felt, heard, or smelled before they are bought. ? Inseparability: Services are produced and consumed at the same time and cannot be separated from their providers. ? Variability: The quality of services may vary greatly depending on who provides them and when, where, and how. ? Perishability: Services cannot be stored for later sale or use.

Source: Kotler and Armstrong(2012) Figure 2. 2 Characteristics of Service

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