Summary Chapter 14 - Business Management 114

Chapter 14 – Building Customer Relations through Effective
Marketing

Marketing – activity, set of institutions, and processes fro creating,
communicating, delivering or exchanging offerings of value to
customers.

Managing Customer relations
 Relationship Marketing – marketing decisions made to create
long term satisfying relationships with companies
 Customer Relations manager (CRM) – Using customer
information to create marketing strategies to develop and
sustain desirable customer relationships. (Increase long term
profitability by keeping customer loyalty)
 Customer lifetime value – used for CRM as it determines
customers worth to business over entire lifetime

Utility: Value of added marketing
 Utility – ability of good to satisfy a person
 Types of utility
1. Form Utility – Created by converting raw materials into
finished products. Finished product must suit customer
need e.g. size
2. Place Utility – Created by making a product available at
a specific place
3. Time Utility – Created by making a product available at a
specific time
4. Possession Utility – Created by transferring ownership of
a product from owner to buyer

Marketing concept – business philosophy that a firm should provide
goods/services that satisfy customers through a coordinated set of
activities

Classification of Markets
 Consumer Markets – purchasers intends to benefit from
product
 Business to Business Markets or industrial markets are further
classified
1. Producer – products are purchased to manufacture other
products
2. Reseller – Buy goods to sell at a profit
3. Governmental – Buy products to provide citizens with
such products e.g. highways
4. Institutional – Non-profit organizations e.g. church,
hospitals

Developing a marketing Strategy

, *Plan that will enable a organization to make best use of its
resources and advantages in order to meet goals
Consists of
1. Selecting the target market
2. Creating and maintaining the correct market mix (combination
of product, price, distribution and promotion)



Target Market Selection and evaluation
 Undifferentiated approach- assumes all customers in target
market have similar needs thus satisfied by same market mix
e.g. sugar and salt
 Market segmentation approach – market mix focuses on
specific segment of market. E.g. yachts in boat market on
specific people

Marketing Environment
Affects market but cannot be controlled by business
 Economic forces – Customers ability or willingness to buy
 Sociocultural forces – changes in attitudes/beliefs or lifestyles
 Political Forces – influence from elected officials
 Competitive Forces – actions of competitors
 Legal and regulatory forces – laws that protect customers
 Technological forces – can create new marketing opportunities
or cause products to become obsolete.

Types of buying Behavior
Buying behavior – Decisions made buy buyer when buying product
 Consumer buying behavior – purchase products to use in
household
 Affected by
1. Situational influences e.g. surroundings, time
2. Psychological influences e.g. learning, personality
3. Social Influences e.g. Family, peers, culture
 Consider
1. Quality
2. Price
3. Service provided

 Business Buying Behavior
 Bought for resale purposes
 Consider
4. Quality
5. Price
6. Service provided

Decision Process