Tài liệu Creat marketing strategies jat industrial equipment and automobile accessories company in the period from 2012 to 2020

Paris Graduate School of Management Thai Nguyen University INTERNATIONAL EXECUTIVE MASTER OF BUSINESS ADMINISTRATION PROGRAM THESIS TITLE CREATE MARKETING STRATEGIES JAT INDUSTRIAL EQUIPMENT AND AUTOMOBILE ACCESSORIES COMPANY IN THE PERIOD FROM 2012 TO 2020 Student name: NGUYEN BUI HA Intake I 11 - 2012 Graduation thesis TABLE OF CONTENT: INTRODUCTION ................................................................................................ 7 1. The necessity of theme research: ..........................................................................7 2. Purpose and applicability of thesis........................................................................7 3. Research method...................................................................................................8 4. Structure and composition of the thesis ................................................................8 CHAPTER I: RATIONALE FOUNDATION TO CONSTRUCTION AND DEVELOPMENT OF BUSINESS STRATEGY ................................................ 9 I. Concept, role and position of Strategic Marketing ................................................9 1. Overview of the business development strategy .................................................9 1.1. The concept of marketing strategy of the business .........................................9 1.1.1. Concept of strategy....................................................................................9 1.2. The role and position of the marketing strategy in a company ....................17 II. Research and market segmentation in Marketing .............................................18 2.1. Common market research ..............................................................................18 2.1.1. Market and the role of market ...................................................................18 2.1.1. Theory of market research.......................................................................18 2.1.2. The process of market research ...............................................................19 2.1.3. Definition of customer satisfaction (Philip Kotler, 2003) .........................19 2.1.4. The relationship between customer satisfaction and service quality ........20 2.1.5. The different levels of demands and mission of Marketing .......................21 III. Marketing strategy development of a business .................................................22 3.1. Position of marketing strategy planning in the strategic management process ....................................................................................................................22 3.2. Marketing strategic planning .........................................................................24 3.2.1 Marketing plan making in business............................................................26 3.2.2. Marketing strategic planning.....................................................................26 3.2.3 Marketing strategy selection………………………………………………………………………….…..26 3,2.4. Marketing process management ..............................................................26 International Executive Master of Business Administration Program 2 Graduation thesis CHAPTER II ...................................................................................................... 30 ANALYZE THE EQUIPMENT & BUSINESS PICTURE AUTOMOBILE OF JAT ACCESSORIES INDUSTRIAL JOINT STOCK COMPANY ......................................................................................................... 30 I. GENERAL INTRODUCTION TO JAT INDUSTRIAL EQUIPMENT & AUTOMOBILE ACCESSORIES JOINT STOCK COMPANY............................30 1. History of foundation and development ...........................................................30 1.1. The process of foundation ............................................................................30 1.2 Function & duty ............................................................................................31 1.3 Mission, vision, business philosophy .............................................................32 1.3.1 Mission .....................................................................................................32 1.3.2 Vision .......................................................................................................33 1.3.3 Business philosophy: ................................................................................33 1.3.4 Organization: ...........................................................................................33 2. Resource factors.................................................................................................35 2.1 Capital resource.............................................................................................35 2.2 Human resource ............................................................................................36 2.3 Technology ....................................................................................................36 2.3.1. Machines & equipment ............................................................................36 2.3.2. Production technology: ...........................................................................37 2.4 Economic relations ........................................................................................37 3. Business picture .................................................................................................38 3.1. Investment state ............................................................................................38 3.2. The objective and the general of the project: ................................................38 3.3. The business picture .....................................................................................39 3.4. Business result:.............................................................................................42 3.5 Financial activities ........................................................................................43 3.5.1 Depreciate fixed assets:............................................................................43 3.5.2 Mean salary: ............................................................................................43 II. ANALYSIS OF EXTERIOR FACTORS AFFECTING ENTERPRISE ..........43 International Executive Master of Business Administration Program 3 Graduation thesis 1. Macroscopic environment .................................................................................43 1.1 Economic environment..................................................................................43 1.2 Political-legal environment...........................................................................46 1.3 Cultural and social environment ...................................................................47 1.4 Technological environment ...........................................................................47 1.5 Natural environment.....................................................................................48 2. Analysis on the industry premises.....................................................................48 2.1 Analysis on the forces from potential competitors.........................................48 2.2 Analysis on the forces from customers ..........................................................49 2.3 Analysis on the forces from supplier .............................................................49 2.4. Forces from substitute products....................................................................50 2.5. Analysis on the forces from competitors in the same industry......................51 3. Opportunities and challenges ............................................................................51 3.1. Opportunities: ...............................................................................................51 3.2. Challenges ....................................................................................................53 4. Analysis of competition, matrix model CPM....................................................54 5. Matrix model EFE .............................................................................................55 III. Analysis of the companies’ internal situation....................................................56 1. Analysis of resources..........................................................................................56 1.1 Labor resource...............................................................................................56 1.2 Analysis of marketing activities .....................................................................56 1.3. Product strategy:...........................................................................................59 1.4. The price strategy: ........................................................................................59 1.5. The product distribution strategy:.................................................................60 1.6. The sales promotion strategy: .......................................................................60 1.7. The customer relationship management strategy – The key element creating the success of the company: ................................................................................60 1.8. The other marketing strategies: ....................................................................61 1.8.1. The human strategy: ................................................................................61 1.8.2. E-channel management policy:................................................................61 International Executive Master of Business Administration Program 4 Graduation thesis 1.8.3.The business intelligence strategy (can be used).......................................61 1.9. About the technology ....................................................................................61 1.10. Analysis of fiscal capability ........................................................................61 1.11. Management Policy ....................................................................................63 1.12. Analysis of production activities .................................................................63 1.13. Analysis of Research and Development Activities ......................................65 1.14. Analysis of Information Management Activities ........................................65 2. Analysis of Support Activities ...........................................................................66 2.1 Analysis of management activities of the supplier .........................................66 2.2 Analysis of management activities of workforce............................................66 2.3 General analysis of management activities....................................................67 3. Analysis of assessment, identification and assessment of valued force and essential capacity....................................................................................................68 4. IFE matrix construction ....................................................................................69 IV. SWOT ANALYSIS .............................................................................................70 CHAPTER III: CONCLUSIONS AND RECOMMENDATIONS ................. 72 I. BUSINESS DEVELOPMENT ORIENTATION FOR 2012-2020 ......................72 1. Marketing plan objectives .................................................................................72 1.1. Scale, market share.......................................................................................72 1.2. Specific objectives .........................................................................................72 II. PROPOSAL FOR BUSINESS STRATEGY ......................................................74 1. TOWS Matrix ....................................................................................................74 2. SPACE matrix....................................................................................................75 3. Proposed strategic options through QSPM matrix ..........................................78 3.1. QSPM for S-O Group ...................................................................................78 3.2. QSPM for S-T group.....................................................................................80 3.3. QSPM for W-O group...................................................................................81 3.4. QSPM matrix for W-T group........................................................................82 III. SUGGEST SOLUTIONS TO DEVELOP STRATEGIES FOR THE COMPANY ...............................................................................................................83 International Executive Master of Business Administration Program 5 Graduation thesis 1. Human resource.................................................................................................83 2. Financial solution...............................................................................................85 3. Suggest marketing strategies for the company: ...............................................85 3.1 Design the marketing system .........................................................................86 C. SPECIFIC MARKETING-MIX POLICY ...................................................88 3.2. The reality of supporting organization for marketing strategy .....................91 3.2.1. Use information systems ..........................................................................91 3.3 Strategic Marketing plan ...............................................................................92 3.3.1 Advertising plan .......................................................................................92 3.4. Measures for promotion and other consumption support ............................93 3.5. Specifying marketing strategy.......................................................................94 4. R&D solution .....................................................................................................95 IV. PROPOSAL FOR GOVERNMENT and enterprise.........................................96 A. For government ...............................................................................................96 LIST OF REFERENCES ..................................................................................... 98 International Executive Master of Business Administration Program 6 Graduation thesis INTRODUCTION 1. The necessity of theme research: Creating business strategies is a permanent activity of a company. It is said that identifying a right strategy will decide the success of that company’s objective and mission. However, it mustn’t be that all Vietnamese companies have good strategies. Every failure of a company is an evidence of a poor strategy. Therefore, creating strategies is always focused on by businesses and keeps its burning nature including businesses with the good development strategies. This becomes more important in the Vietnam’s integration into the global economy. Big chances are more, and then challenges are more. To compete successfully, businesses should identify right ways and good strategies so that they can identify their strong points, weak points, opportunities and their risks. In fact, many businesses do not pay much attention to development strategies, especially medium businesses and small size businesses. Even these businesses do not identify a strategy for their development because the main reason that they are not aware of the role of strategies. Now, Vietnam is developing the branch of automobiles and motorcycle manufacture but that the internal supporting industry is a fledgling one with the slow development speed is the biggest barrier which is holding the development of this branch back. One of the reasons which make Vietnam’s supporting industry underdeveloped is that businesses do not attach special importance to create business and manufacture strategies methodically. This thesis is very necessary to establish a model of company in the field of manufacturing small but sophisticated accessories for motorbikes effectively contributing its part to the development of the automobile and motorcycle industry and supporting industry in Vietnam. 2. Purpose and applicability of thesis  In theory: This thesis includes knowledge of all subjects taught at IEMBA course and applied in the practical manufacture at JAT Industrial Equipment & Automobile Accessories Joint Stock Company effectively. International Executive Master of Business Administration Program 7 Graduation thesis  In practice: Contribute to equalize manufacture of automobile accessories and industrial equipment, JAT created successfully highly applicable business strategies for the period 2012 - 2020. Build JAT Industrial Equipment & Automobile Accessories Joint Stock Company into a model of businesses in the supporting industry: small, sophisticated, effective. Create a breakthrough step in strategy helping the supporting industry of Vietnam to develop next years. 3. Research method Main research method applied to research this thesis is descriptive and statistical method and strategy planning matrix (Internal Factor Evaluation Matrix - IFE, External Factor Evaluation Matrix – EFE, Competitive Profile Matrix, Opportunity, Threats, Strong, Weakness - SWOT,...). Theorical foundation of this method is mentioned in Chapter 1 of this thesis.  Information collection: Secondary information: will be collected from Vietnam Association of Car and Motorcycle including statistics data of Vietnam Honda Company, JAT Industrial Equipment & Automobile Accessories Joint Stock Company and audited financial accounting information. Primary information: Interview directly staffs: business department, production department, deliver questionnaires to customers and suppliers. Analyze data: apply statistic techniques to process, summarize, evaluate, compare, assess and produce results of all researched contents. 4. Structure and composition of the thesis: this thesis consists of 3 as follows: Introduction Chapter I: Aargumentative basis for creating business strategies for businesses. Chapter II: Analyze the business picture of JAT industrial equipment & automobile accessories joint stock Company. Chapter III: Conclusion and suggestion Conclusion List of reference materials Appendix International Executive Master of Business Administration Program 8 Graduation thesis CHAPTER I: RATIONALE FOUNDATION TO CONSTRUCTION AND DEVELOPMENT OF BUSINESS STRATEGY I. CONCEPT, ROLE AND POSITION OF STRATEGIC MARKETING 1. Overview of the business development strategy 1.1. The concept of marketing strategy of the business 1.1.1. Concept of strategy At the moment there are many different definitions of strategy, the underlying cause of this difference is due to the different systematic concepts for the organization in general and the different approaches of the organization's strategy in particular. Ontologically, depending on the perspective of positivism or constructivism, the essence of strategy is determined by the law of nature or the significant impact of subject. In fact, strategy is usually defined towards practices in order to easily facilitate the process of practice within the organization. According to Johnson and Scholes, strategy is defined as follows: “Strategy is the determination of direction and scope of an organization over the long run, in which the organization must gain the advantage through a combination of resources in a challenging environment, to meet the best market demands and satisfy the expectations of the stakeholders of the organization”. According to Michael Porter (1996), "Strategy is the job to create a balance for activities in a company. The success of strategy is mainly based on carrying on the tasks successfully... and combine them together ... the core of the strategy is to "choose what not to do". With this approach, strategy is making a difference in competition, search and do what not to be done. Basically, strategy is to build competitive advantages, which only exists in unique activities. Strategy is constructing an only position and has a function to impact a set of different activities. Known strategy is a plan for a task, mission, or a long-term orientation, that requires longer time to make. Usually it carries a big significance, such like military strategy is to International Executive Master of Business Administration Program 9 Graduation thesis plan the direction for a campaign, or a business strategy is to plan its development in a period of 5 or 10 years... 1.1.2. Concept of Marketing There are many different concepts of Marketing, depending on the actual situation and the different perceptions people have that forms those differences. The differences are not only in the level of details but also in the content that it contains. However it is admitted that marketing is created in order to support efficiently commercial activities, sales and consumption of products. Nowadays, with the help of modern science, management level and the industry, it gives birth to Business Marketing and Modern Marketing. With this new point of view, marketing activities grow both in quality and quantity that explains more correctly the meaning that it carries. We can define marketing as follows: “Marketing is the process of implementing activities to achieve the organization's objectives by anticipating the needs of customers or consumers to control the flow of goods and services to satisfy the needs from manufacturer to the customers or consumers” (according to E.J McCarthy). And in order to apply modern marketing to the commerce of economic organizations, the definition of commercial marketing can be accepted: “Commercial marketing is the process of organizing, managing and controlling activities in order to create possibilities and achieve the most effective consumption of a product of an organization to best satisfy the demand of producers, traders and consumers.” Modern Marketing is no longer confined to commercial areas, it is no longer activities to help sales or consume the available goods. If traditionally, people concept marketing to be looking for the market to sell the existing products, which considers production on top, then followed by the market, in the modern view market is seen as the most important thing in determining reproduction of goods. In the market, buyers (demand) are the determination in the business production process. Modern Marketing starts from the market. It includes all activities such as market research, forecasting the development of the market in the future to the product strategy, International Executive Master of Business Administration Program 10 Graduation thesis sales and after-sales services for the product that the market requires so that the volume of goods produced are to be fully consumed in the market. In summary, in the process of forming a marketing point of view so far, there are all basic concepts for organizations to carry out marketing activities such as:  Marketing as an activity  Incorrect views about marketing a. Marketing is advertising and promote sales Every day we get a lot of advertising in newspapers, television, flyers and a lot of solicitations from sellers in shops, markets and agencies coming to our workplace. Not to mention other promotional activities like sales promotion, event sponsorships, exhibitions, fairs, customer conferences. All the above activities are within the scope of marketing. However if we consider marketing to only those activities, or consider those activities to be the essence of marketing, it is incomplete. The promotional activities are just part of consumption process, and consumption process is just the tip of a marketing iceberg. b. Marketing is product consumption Product consumption is the activity that happens right after production in order to transfer ownership of the products or services to the buyers and collect the money. Consumption is only one of the 4 main activities of the business, while marketing appears in all 4 stages of the business process.  Social orientation of marketing Marketing is a social activity of human being to satisfy demands through trading. According to the American Marketing Association: "Marketing is the implementation of business line aimed at transportation of goods and services from producers to consumers or user." According to Philip Kotler: "Marketing is a form of human activity in order to satisfy their needs and wants through exchange."  Administrative definition of marketing Marketing is the administrative activities to product design, pricing, distribution, promotion and sale to customers in order to satisfy their goals and objectives of the organization. International Executive Master of Business Administration Program 11 Graduation thesis  A general definition of Marketing: Marketing is a social management process, in which the various individuals and groups of people get what they need and want through creating, offering and exchanging products of value with each others. This definition of marketing leads us to the following core concepts: urgent needs, wants, needs, products, benefits, cost, customer satisfaction, exchange, trading, market, marketing and marketers.  Needs Needs of human being are the sense of lacking something that they can feel. People’s needs are diverse and complex. They include basic physiological needs such as foods, clothes, keeping warm, security as well as social needs such as intimacy, trust, relationship and other personal needs of self-esteem and self-achievement. Needs are the fundamental element of human nature, it is not defined by social or marketers.  Wants Human’s wants are a particular type of desire, corresponding to the level of knowledge and personality of an individual. It desires to manifest into specific things that can satisfy personal wants in the way that socio-cultural life of a particular society appears to be used to. When the society develops, needs of its members grow? People expose more to the objects that raise curiosity, interest and desire. The manufacturer always directs their activities toward stimulating the desire to purchase and try to establish the relationship between adaptations of their products with the basic needs of the people.  Demands Human’s needs are the desire to add more solvencies conditions. The desires become demands when they meet purchasing power. Human is not limited by the desire but the ability to satisfy the desire. Many people want the same product, but only a few of them are able to satisfy their desire thanks to their ability to afford. Therefore, in marketing activities, businesses must measure not only how many people want their products, but more importantly how many people are capable and willing to buy them.  Products International Executive Master of Business Administration Program 12 Graduation thesis The basic needs, wants and desires give way to the presence of products. Products are anything that can be brought to the market, catch attention, be received, be consumed or used to satisfy a need or want of a person. The concept of product and demand lead us to the concept of product satisfaction. We can express a certain product and a certain demand into circles and present the satisfactory level of the product by the coverage of the desired circles. The more people the product can satisfy, the easier it can be accepted by the consumers. So it can come to a conclusion, the manufacturers need to identify the groups of customers that they want to sell the products to, and should provide the products that can satisfy the demand of these groups as many as they can.  Benefit Typically, each buyer has an income limit, a certain level of knowledge about the product and purchasing experience. In such conditions, the buyer will have to decide to buy the product, which produced it, how much quantity he needs to maximize an overall satisfaction or the overall benefit as a consumer of that product. Overall benefit of the customer is an entire benefit that he expects in each particular product or service that can include core benefit of the product, benefit from augmented service of that product, quality and customer service of the manufacturer, reputation and image of the business...  Cost Total cost of the customer is an entire cost that the customer has to give up to own the product. It includes time, effort and spirit to search and choose the product. The buyers assess these costs along with the cost of money to get a full idea of the total cost. During the stage of purchasing-selling of the product, the above solution makes it easy for the buyer to buy what they want and the seller can sell the product. However in the consumption process, the seller needs to know if the buyer is satisfied with what they expect from the product.  Customer Satisfaction Customer satisfaction is the stage of perceiving of an individual through the consumption of a product about the level of benefit that product actually brings comparing to the expectation. International Executive Master of Business Administration Program 13 Graduation thesis So, to evaluate the satisfaction level of customers for a product, we compared the results obtained from the product with his or her expectations. 3 levels of satisfaction can exist: customer dissatisfaction if actual results are less than what they expected; customer satisfaction if results provide commensurate with customer expectations and customers are very satisfied if the results exceed expectations. Customer expectations are usually formed from their previous shopping experience, the opinions of friends and colleagues, and the information or promise from suppliers and competitors. Through marketing efforts, the seller can influence or even alter the expectations of the buyer. It should avoid two trends: one is, the seller manifests in the buyer a too high expectations for its products while it does not deserve, so will disappoint buyers; the other one is, the seller makes buyers have lower expectations of the product, it will satisfy the buyer, but will not attract many buyers. In this case, a reasonable marketing solution that successful businesses usually applied is the increasing expectations of customers while ensuring product features match expectations.  Exchange and Transaction Marketing activities take place when people decide to satisfy their desire through the exchange.  Exchange Exchange is the act to collect desired goods from someone by sacrificing something in return. Exchange is one of the 4 ways that people can get what they want (selfproduction, appropriation, begging and exchange. Marketing was born from this approach in order to get the products. Exchange is the core concept of marketing. Exchange is a complex human activity, is the people own behavior, which never have been in the animal world. According to Adam Smith, "People have a natural tendency to exchange things, do transaction, and give away one thing in exchange for another.”  Transaction If the two parties commit an exchange have negotiated and reached an agreement, then we say a transaction (business transactions) have occurred. Transaction is the main unit of exchange. A business transaction is an exchange of values between the two International Executive Master of Business Administration Program 14 Graduation thesis parties. We can say A hand X to B in exchange for receiving Y. C gives D an amount of 3 million Dong and receive a TV. That is a business transaction made by cash. However, there are also business transactions do not require money as one of the commercial value. An exchanging transaction takes place when C gives D a TV and receives a refrigerator in return. Or the exchange transaction can include giving and receiving services instead of products, like when engineer M repairs the motorbike for artist D and in return, D paints a portrait for M. A business transaction involves at least two valuable objects, the conditions of the agreement, an appropriate time, and a suitable place. Usually there is a legal system involved to support and enforce the parties to act according to bound agreements. Transaction differs from transfer. In a transfer, A gives X to B but does not receive anything significant. When A gives B a present, a help or a charitable distribution, it is called a transfer, rather than a business transaction. Marketing research object is limited mainly in the concept of exchange and not transfer. However, the transfer behavior can also be understood through the views of exchange. The transferor gives a product with the hope to gain some of the benefits, such as sympathy, reduced feelings of guilt, or to see a good behavior from the transferee.  Market The concept of exchange inevitably leads to the concept of the market. Market is a set of real or potential buyers for a product. The size of the market depends on the number of individuals in demand and has the products being interested in and willing to exchange these products to have what they want. A market can be formed around a product, a service, or anything else of value. For example, the labor market, including those who want to devote their work in exchange for the amount of money or products. Currency market appears to satisfy the needs of the people so that they can borrow, save and preserve money.  Marketing as a business perspective  Perspective before marketing a. Production-oriented perspective International Executive Master of Business Administration Program 15 Graduation thesis This point of view thinks that the secret of success in business is to produce products cheaper and distribute them widely. b. Product-oriented perspective This is the perspective that the secret of success in business is to produce better products than the competitors. c. Sales oriented perspective This is the perspective that the secret of success in business are sales skills and ability to promote better than the competitors.  Marketing perspective This perspective believes that the secret of success in business is to identify the right target customers and their needs, satisfy these needs more effectively than competitors. This perspective has 4 main foundations:  Identify the right target customers  Identify the right needs of the target customers  Satisfy the needs of the target customers  Achieve the satisfaction of target customers better than the competitors.  Social marketing perspective This perspective thinks that the secret of success in business is to identify the right target customers and their needs, satisfy these needs more effectively than competitors, at the same time not compromising the long-term interests of the customers and society.  The core concept of marketing  Need Need is a sense of lacking something that a person can sense. Example: needs of foods, sleep, study... Need is not created by the society or marketers, it exists as a component of human. The job of a marketer is to identify it and stimulate demand to develop the need. * Maslow’s hierarchy of needs International Executive Master of Business Administration Program 16 Graduation thesis  Want Want is the desire of specific things to satisfy the demand. Human’s wants never stop to develop and is formed by the conditions of economy, politics, society...  Demand Demand is the quantity, type of goods or services that buyers want to buy and is able to pay.  Exchange Exchange is an act of a person or a party to receive something and give back something to the other party something of an equivalent value. Conditions to carry out an exchange:  There must be at least 2 parties  Each party must have something of value for exchanging with the other party  Each party must be able to execute a transaction and exchange goods or other things  Each party must be willing to exchange  The 2 parties must come to an agreement of conditions to exchange 1.2. The role and position of the marketing strategy in a company 1.2.1 The role of marketing Marketing decides and coordinates business production activities of the business with the market. It ensures that the business activities are market driven, know to make International Executive Master of Business Administration Program 17 Graduation thesis market, needs and wants of customers a solid ground for all business decisions. Marketing nowadays plays a central role in translating customer information to new products, new services and then segment these products on the market. 1.2.2 The role and position of modern marketing in business New products and services is the companies’ answer to changing customer preferences and also the dynamics of the competition. Customer needs change, and the companies have to stay innovative in order to satisfy and meet the needs of our customers. So marketing plays a role to: - Identify customer needs, establish and lead the process of innovation. - Collaborate other research and development process to accelerate the implementation of new products, and it is the most important factor affecting the success of a product. - Help businesses spot the new trends, quickly become lever, turn them into opportunities, which aids for a strategic development and sustainable growth of the business. II. RESEARCH AND MARKET SEGMENTATION IN MARKETING 1. Common market research 1.1. Market and the role of market 1.1.1. Theory of market research a. Concept Market research is the process of collecting and processing data to provide market information to support decision-making processes related to marketing activities. The purpose of market research is to reduce the risk for marketing decisions by providing market information and updates based on reliable data and evidence. b. The role of market research Market research helps identify marketing opportunities, such as the unfulfilled needs of customers. It also helps detect threats, such as detecting declining market share and customers no longer loyal to the brand. Marketing manager will use information provided by market research process to make suitable decisions, for example develop International Executive Master of Business Administration Program 18 Graduation thesis new products to meet customer demands or construct a communication channel in a more effective way. Marketing managers sometimes want to test before making a decision; market research will help them do the test, such as survey consumers about a certain product. 1.1.2. The process of market research Identify Object to research Identify information to be collected Research and Design Collect Data Analyze Data and Interpretation Presentation of Result Source: Business Edge 1.1.3. Definition of customer satisfaction (Philip Kotler, 2003) "Satisfaction is the degree of the state of human feeling derived from the comparison of the results obtained with the expectations of the product" (Kotler, 2003). "Satisfaction is the reaction of consumers to the estimation of the difference between the initial expectation and the feeling after using the product" (Tse and Wilton, 1988). “Satisfaction is the response of consumers when expectations are meeting"(Oliver, 1997). Although there are many different definitions of customer satisfaction, we can understand that customer satisfaction is the satisfaction of the consumer in the consumption of products or services for they meet their requirements, including satisfactory level to be above or under expectation. Implicit requirement (features): requirement that customers do not reveal but they take it as default to be available in the product or service. If the feature is not available, customers will be extremely dissatisfied, but if the feature is improved, customers will take it as if it should be so, and the satisfaction is unchanged. Prerequisite requirement (linear): requirement that customers want to have and can be satisfied. The higher the quality level is the more satisfied customers will be. Undisclosed requirement (interest): requirement that customers have not yet expected or thought of, and without it customers will not be miffed, however if it exists it will make customers extremely pleased and it will encourage them to purchase the product or use the service. International Executive Master of Business Administration Program 19 Graduation thesis 1.1.4. The relationship between customer satisfaction and service quality Figure 3.6. Factors that affect customer satisfaction Customer Satisfaction Product  Variety of products;  Price;  Quality and product specifications;  Service quality, aftersale service… Convenience      Location; Shopping condition; Goods return condition; Opening hours; Payment method… Human  Sellers’ skill;  Staff behaviour and attitude… Source: Philip Kotler, 2003 Three main factors of customer satisfaction are product, convenience and human. Service quality is a factor that has an impact on customer satisfaction. This shows that customer satisfaction has a broader meaning than service quality. a) The business market According to neo-classical economics: The market is a meeting place between supply and demand. In a marketer’s point of view: When talking about market, it should mention about stakeholders (those who directly or indirectly are involved in making supply and demand meet). It is important to understand and grasp the market demand.  The business market is a set of products, services or characters that businesses must compete and achieve success through their own activities. b) Market share Market share of a certain product is the ratio of sales of that product in the market comparing to the total revenue of all products in the same category in the same market. For example:  Market penetration rate Existing customers: customers who are using products of a business. International Executive Master of Business Administration Program 20