Chapter 11

Question 1

Managing customer relationships

Answer 1

=> Relationship marketing:
Establishing long-term, mutually satisfying buyer-seller relationships.

=> Customer relationship management (CRM):
Using information about customers to create marketing strategies that develop and sustain desirable customer relationships.

=> Customer lifetime value:
A combination of purchase frequency, average value of purchases, and brand-switching patterns over the entire span of a customer’s relationship with a company.

Question 2

Utility

Answer 2

The ability of a good or service to satisfy a human need.

• Form utility: Created by converting production inputs into
  finished products.
• Place utility: Created by making a product available at a location
  where customers wish to purchase it.
• Time utility: Created by making a product available when customers wish to purchase it.
• Possession utility: Created by transferring title (OR ownership) of a product to a buyer.

Types of utility
> Form
> Place
> Time
> Possession

Question 3

Market

Answer 3

A group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase such products

=> Consumer markets
Purchasers and/or households members who intend to consume or benefit from the purchased products and who do not buy products to make a profit

=> Business-to-business (industrial) markets
Producer, reseller, governmental, and institutional customers that purchase specific kinds of products for use in making other products for resale or for day-to-day operations

=> Producer markets
Individuals and business organizations that buy products to use in the manufacture of other products.

=> Reseller markets
Intermediaries such as wholesalers and retailers that buy finished products and sell them for a profit.

=> Governmental markets
Buy goods and services to maintain operations and provide citizens with products such as highways, education, utilities, defence.

=> Institutional markets
Churches, not-for-profit private schools and hospitals, civic clubs, charitable organisations.

Question 4

Market strategy

Answer 4

A plan that will enable an organization to make the best use of its resources and advantages to meet its objectives.

• The selection and analysis of a target market
• The creation and maintenance of an appropriate marketing mix (a combination of product, price, distribution, and promotion developed to satisfy a particular target market).

Question 5

Marketing strategies

Answer 5

=> Target market
A group of individuals, organizations, or both, for which a firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group.

=> Market segment
A group of individuals or organizations within a market that share one or more common characteristics.

=> Market segmentation
The process of dividing a market into segments and directing a marketing mix at a particular segment or segments rather than at the total market.