Chapter 11 (BUILDING CUSTOMER RELATIONSHIPS THROUGH EFFECTIVE MARKETING)

Question 1

Managing customer relations

Answer 1

1. Relationship marketing:
   Establishing long-term, mutually satisfying buyer-seller relationships.
2. Customer relationship management (CRM):
   Using information about customers to create marketing strategies that develop and sustain desirable customer relationships.
3. 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

Definition: The ability of a good or service to satisfy a human need.
1. Form utility: Created by converting production inputs into finished products.
2. Place utility: Created by making a product available at a location where customers wish to purchase it.
3. Time utility: Created by making a product available when customers wish to purchase it.
4. Possession utility: Created by transferring title (OR ownership) of a product to a buyer.

Question 3

Types of markets

Answer 3

Definition: A group of individuals or organisations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase such products
1. 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
2. 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

Question 4

Business-to-business markets

Answer 4

1. Producer markets
   Individuals and business organisations that buy products to use in the manufacture of other products.
2. Reseller markets
   Intermediaries such as wholesalers and retailers that buy finished products and sell them for a profit.
3. Governmental markets
   Buy goods and services to maintain operations and provide citizens with products such as highways, education, utilities, and defence.
4. Institutional markets
   Churches, not-for-profit private schools and hospitals, civic clubs, charitable organisations.

Question 5

Marketing stratagies

Answer 5

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

Question 6

Marketing strategies consists of

Answer 6

1. The selection and analysis of a target market
2. 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 7

Target market selection and evaluation

Answer 7

1. Target market
   A group of individuals, organisations, or both, for which a firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group.
2. Market segment
   A group of individuals or organisations within a market that shares one or more common characteristics.
3. 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.

Question 8

Approaches to selecting target market

Answer 8

1. undifferentiated market strategy
   single marketing mix
   single target market
2. Concentrated market segmentation approach
   Single marketing mix
   multiple target markets
3. Differentiated market segmentation approach
   Multiple marketing mixes
   Multiple target markets

Question 9

Common bases for market segmentation

Answer 9

1. Demographic
2. Psypographic
3. Geographic
4. behaviouristic