The influence of the marketing concept on company performance

G THE PENINSULA TECHNIKON BUSINESS FACULTV Mtech Thesis THE INFLUENCE OF THE MARKETING CONCEPT ON COMPANY PERFORMANCE WITH SPECIFIC REFERENCE TO CUSTOMER SERVICES WITHIN THE TRAVEL AGENCY INDUSTRY IN THE WESTERN CAPE MORNAY ROBERTS-LOMBARD CAPE TOWN SEPTEMBER 2001 A MASTERS DEGREE DISSERTATION PRESENTED TO THE DEPARTMENT OF MARKETING OF THE BUSINESS FACULTY AT PENINSULA TECHNIKON In fullIlment of the requirements of the Masters Degree in Technology: Marketing September 2001 by M Roberts-Lombard Supervisor: Mr I.C van der Heever (peninsula Technikon) DECLARATION I, the undersigned, hereby declare that the work contained in this thesis is my own original work and has not previously in its entirety or in part been submitted at any university or technikon for a degree SIGNATURE: DATE: ABSTRACT Companies operating in the sel"Vlce industry must take note of three important marketing tasks The first of these tasks is that companies should realise that they must provide the market with a variety of products Businesses should therefore furnish the market with a diversified product range Secondly, customers expect from the business sector to provide them with a quality service that even exceeds their own expectations Thirdly, to ensure its survival in a competitive environment, the company should improve the productivity of its employees e.g by improving the level of customer service provided to customers Kotler (1997: 488) argues that such an improvement in productivity levels of employees can be achieved through employees working more skilIfully, increasing the quantity of service by surrendering some quality, industrialising the service, inventing new-product solutions, designing more effective services, presenting customers with the incentive to substitute their own labour for company labour, or using technology to save time and money Keeping these facts in mind and taking into consideration that tourists have been arriving in South Africa from all over the world for decades, it is of great importance for visitors to South Africa to receive customer service of the highest quality A tourist travelling in the Republic of South Africa will most probably make use of a local travel agency if they should be in need of any further travel related services A travel agent representing a particular travel agency, will not be engaged in the sale of travel related services only to tourists, but also to any other consumer interested in making use ofthe Travel Agencies' services The Association of Travel Agents' (ASATA) code of conduct stresses that "ach travel agent engaged in the sale of travel-related services direct to consumers shall maintain the highest standard of service possible, complying "vith all statutory requirements, including those applicable to travel agents and with all provisions of this code" (Business Practices Committee Consumer Code For Travel Agencies, 1994: 5) This thesis is an analysis of the "marketing concept", with specific reference to customer service It focuses on the top management in the travel agency industry and will be concerned with the degree to which top management is marketing orientated and the influence their marketing-orientated outlook will have on the performance of the travel agency With marketing being defined as: "the process of planning and executing the conception, pricing, promotion and distnbution of ideas, goods and services to create exchanges that satisfY individual and organisational goals", it must be emphasized that marketing can be seen as, amongst others, the anticipation and satisfaction of customer needs (Boshoff & Terblanche, 2000: 4) This research study would also include a study of the travel agency's level of customer service, which will have a direct reflection on top management's marketing outlook as well as the travel agency's level ofperformance ACKNOWLEDGEMENTS My sincere gratitude to: • The travel agencies in the Western Cape who assisted me with useful remarks which enabled me to complete this thesis; • Mr I C van der Heever, my supervisor, who provided meaningful comments and guidance throughout the various stages of this demanding task; • The people working within a well-known research company in Cape Town for their support and constructive advice on the research project; • Lorenzo Himunchull of Peninsula Technikon's Educational Development Centre whose assistance during the data analysis stage was of great benefit to me; • Dr Edwin Heath of the Department of English, University of Stellenbosch, for the proofreading of my thesis; • Me Sus Niemand for the typing of the thesis and willinguess to assist me in meeting my deadlines; • Mr Andrikns van der Westhuizen, Campus director: Boland College Stellenbosch, for his support, interest and encouragement during my studies; • My father, Japie Roberts and my best friend, Veronica Carstens, for their constant understanding, patience and support; • God, for providing me with strength and courage to persevere All praise to you God, for your constant love, support and protection during every day of my life Dedicated to two very special people: My late mother, Sue Roberts and My late brother, Byron Roberts Thank you for your love, support and for always believing in me M Roberts-Lombard September 2001 CONTENTS PAGE Table of contents: Chapters - i-vi List of figures vu List of tables viii List ofworksheets ix List of exhibits x List of Addendums Xl Text 1-181 Reference list 182 -185 CHAPTERl PROBLEM IDENTIFICATION PAGE 1.1 INTRODUCTION 1.2 BACKGROUND STUDY 1.2.1 BUSINESS DECISION MAKING PlllLOSOPHIES - AN INTRODUCTION 1.2.2 THE MARKETING CONCEPT AND ITS LINK TO CUSTOMER SERVlCE 1.2.3 RELATIONSHIP MARKETING - AN INTRODUCTION 11 1.3 FORMULATION OF THE RESEARCH PROBLEM 12 1.3.1 SUB-PROBLEMS 12 1.4 HYPOTHESIS 13 1.5 DELIMITATION OF THE RESEARCH 13 1.6 RESEARCH METHOD 13 1.6.1 PRIMARY DATA 13 1.6.2 SECONDARY DATA 14 1.7 SIGNIFICANCE OF THE RESEARCH 14 1.8 OBJECTIVES OF THE RESEARCH 15 1.8.1 PRIMARY OBJECTIVES 15 1.8.2 SECONDARY OBJECTIVES 16 ii 1.9 RESEARCHER'S QUALIFICATIONS 16 1.10 INTENDED PROGRAM OF STUDY 16 1.10.1 OUTLINE OF CHAPTERS 16 1.10.2 TIME FRAME 17 1.10.3 BUDGET 17 1.11 GLOSSARY OF TERMS 17 1.12 SUMMARY 18 CHAPTER DEFINITION AND mSTORICAL DEVELOPMENT OF THE MARKETING CONCEPT 2.1 INTRODUCTION 20 2.2 AN INTRODUCTORY FOCUS ON THE MARKETING CONCEPT 21 2.2.1 THREE FUNDAMENTAL INGREDIENTS TO THE MARKETING -22 CONCEPT 2.3 mSTORICAL OVERVIEW OF THE DEVELOPMENT OF THE MARKETING CONCEPT 29 2.4 THE EVOLUTION OF THE MARKETING CONCEPT: A BACKGROUND STUDY 2.4.1 EVOLUTIONARY PERIODS IN THE DEVELOPMENT OF THE MARKETING CONCEPT 32 ill 2.5 THE CONCEPTUAL CONSTRUCTION AND ACCEPTANCE OF THE MARKETING CONCEPT 39 2.5.1 TIIE MARKETING CONCEPT HAD COME OF AGE 2.5.2 TIIE ADOPTION OF A MARKETING - ORIENTATED PIDLOSOPHY 39 41 2.5.3 TIIE FACTORS THAT INFLUENCE TIIE ACCEPTANCE OF TIIE 42 MARKETING CONCEPT 2.6 PRACTICAL APPLICATION OF THE MARKETING CONCEPT 43 THE ORIGIN AND ADOPTION OF TIIE MARKETING CONCEPT 44 2.6.2 A SOUTH AFRICAN APPLICATION OF THE MARKETING CONCEPT: TIIE SURE TRAVEL TRAVEL AGENCY GROUP 45 2.6.1 2.6.3 TIIE DEVELOPMENT OF THE MARKETING CONCEPT AND ITS FOCUS ON CUSTOMER SERVICE 46 THE MARKETING CONCEPT - A PHILOSOPHY OF MANAGEMENT 47 2.8 OPTIMISATION OF THE MARKETING CONCEPT 51 2.8.1 MARKETING CONCEPT RELATED RESEARCH 51 2.7 2.8.2 A DETAILED CRITIQUE OF THE MARKETING CONCEPT 2.9 2.10 52 THE ADVANTAGES AND DISADVANTAGES OF THE MARKETING CONCEPT 53 SUMMARY 54 CHAPTER CUSTOMER SERVICE IN PERSPECTIVE 3.1 INTRODUCTION 57 ADDENDUM A QUESTIONNAIRE ON CUSTOMER SERVICE WITHIN THE TRAVEL AGENCY INDUSTRY • ADDENDUNIA OUESTI01'vNAIRE ON CUST01"fER SERVICE WITHIN THE TRAVEL AGENCYINDUSTRY The objectives ofthe questi9nnaire are to: • • • determine whether rrnmagement in the travel agency industry in the Western Cape are aware ofand understand the meaning ofthe term marketing concept, determine the level ofcustomer service delivered by travel agency's and to isolate marketing orientation traits ofmanagers in the industry All infGrmation provided on the questionnaire will be treated with confidentiality After completion ofthe questionnaire, please send it back (envelope with stilllp included) to the foHowing address: !Yfr !Yl Roberts La Via 10 Constantiastreet Twin Palms STRAL'ffi 7140 Alternatively, fux it to me to the foHowing number: (021) 853 1640 SECTION A Name oftravel agency: ._-_._._ - _-_ Please indicate the correct option by making an X in the appropriate How long have you been manager ofmis travel agency? Ca) (b) Cc) Less than two years Between - years More than years Have "you attended anv seminars overthe lasr hvo vears? Ca) (b) Yes No B lfyes, indicate the subject ofthe seminar bloc.~ • Home language (a) (b) (c) Afiikaans English Other If other, please specify SECTIONB Please indicate the correct option by making an X in the appropriate block (More than one option may be chosen) Do you consider your travel agency to focus on the: (a) (b) Cc) (d) Leisure market Corporate market Tour market All ofthe above ~ Does your travel agency consist ofa: (a) (b) (c) Leisure division Corporate division Tours division (~ Mmketingm~~on (e) Other Ifather, please specify Which afthe following marketing principles are important to your travel agency? (a) (b) (c) (d) (e) (t) Service deliverance Customer care Handling ofcustomer complaints Personal attention Relationship marketing Other Ifother, please specify SECfIONC Question Please indicate your choic: by making an X in the appropriate block I STATEMENT I TRUE I FALSE I , 8.1 Profit is important when you make decisions about any aspectof the travel agency's activities 82 When the goals for each division are set, they are in line with overall company profit goals 83 The manager ofthe travel agency partake in every import.ant business decision 8.4 The travel agency's organisational structure allows for the very best co-ordination between all the divisions 8.5 Divisions within the travel agency must co-ordinate their activities towards achieving companv goals 8.6 Every division ofthe travel agency must be concerned with the product needs ofthe travel agency's customers 8.7 Every division ofthe travel agency must be concerned with the service needs ofthe travel agencv's customers 8.8 If the price is right, the customer will buy the product 8.9 In the managers' planning, he/she must rely on feedback about customers' needs 8.10 In the managers' policy making, he/she must rely on feedback on how to satisfY the needs of customers 8.11 The manager ofthe travel agency is responsible for ensuring that customer orientation is accepted as a way ofIife by all staffin all divisions within the travel agency 8.12 The travel agency must be organised in such a way that diffi:rent divisions co-operate to satisfy the needs of customers 8.13 lfthe sales furce is good enough, the customer will accept the products the travel agency decides to offer to them 8.14 ltis not necessary for an experienced manager in the travel agency industry to market research to know what the needs ofcustomers are 8.15 The sales force ofthe travel agency must participate in marketing decision making 8.16 There is a diffi:rence between the duties perfurmed by the sales and marketing staffin vour travel agenCY _ 8.17 When experienced managers are dra\\