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Chapter Thirteen
Building Customer
Relationships
Through Effective
Marketing
Learning Objectives
1. Understand the meaning of marketing and
explain how it creates utility for purchasers of
products.
2. Trace the development of the marketing concept
and understand how it is implemented.
3. Understand what markets are and how they are
classified.
4. Identify the four elements of the marketing mix
and be aware of their importance in developing a
marketing strategy.
5. Explain how the marketing environment affects
strategic market planning.
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Learning Objectives (cont’d)
6. Understand the major components of a
marketing plan.
7. Describe how market measurement and sales
forecasting are used.
8. Distinguish between a marketing information
system and marketing research.
9. Identify the major steps in the consumer buying
decision process and the sets of factors that may
influence this process.
10. Describe three ways of measuring consumer
income.
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Marketing
• The process of planning and executing
the conception, pricing, promotion, and
distribution of ideas, goods, and
services to create exchanges that
satisfy individual and organizational
objectives
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Exchange Between Buyer and Seller
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 12th ed. Copyright © 2003 by Houghton Mifflin Company,
Adapted with permission.
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Utility: The Value Added by Marketing
• 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 the buyer
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Types of Utility
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The Marketing Concept
• To achieve success, a business must
– Talk to its potential customers to assess their needs
– Develop a good or service to satisfy those needs
– Continue to seek ways to provide customer satisfaction
• A business philosophy that involves the entire
organization in the process of satisfying
customers’ needs while achieving the
organization’s goals
• Relationship marketing
– Developing mutually beneficial long-term partnerships
with customers to enhance customer satisfaction and
to stimulate long-term customer loyalty
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Implementing the Marketing Concept
• Obtain information about present and
potential customers
– Their needs; how well those needs are
being satisfied; how products might be
improved; customer opinions about the firm
• Pinpoint specific needs and potential
customers toward which to direct
marketing activities and resources
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Implementing the Marketing Concept (cont’d)
• Mobilize marketing resources to
– Provide a product that will satisfy
customers
– Price the product at an acceptable and
profitable level
– Promote the product to potential customers
– Ensure distribution for product availability
when and where wanted
• Obtain information on the effectiveness
of the marketing effort and modify
efforts as necessary
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Markets and Their Classification
• Market
– 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-today operations
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Developing Marketing Strategies
• Marketing strategy
– A plan that will enable an organization to
make the best use of its resources and
advantages to meet its objectives
– Consists of
• 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)
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Developing Marketing Strategies (cont’d)
• Target market selection and evaluation
– 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
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General Approaches for Selecting Target
Markets
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 12th ed. Copyright © 2003 by Houghton Mifflin Company,
Adapted with permission.
Copyright © Houghton Mifflin Company. All rights reserved.
13 - 18
General Approaches for Selecting Target
Markets (cont’d)
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 12th ed. Copyright © 2003 by Houghton Mifflin Company,
Adapted with permission.
Copyright © Houghton Mifflin Company. All rights reserved.
13 - 19
General Approaches for Selecting Target
Markets (cont’)
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 12th ed. Copyright ©
2003 by Houghton Mifflin Company, Adapted with permission.
Copyright © Houghton Mifflin Company. All rights reserved.
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Class Exercise
• Identify one or several characteristics or
variables that could be used to segment the
markets for each of these products.
–
–
–
–
–
–
–
–
–
–
Recreational vehicles (RVs)
Baby food
Rolls Royce automobiles
Snow tires
Hotel rooms
Magazines
Soft drinks
Movies
Shoes
Bicycles
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Class Exercise (cont’d)
• Identify one or several characteristics or
variables that could be used to segment the
markets for each of these products.
–
–
–
–
Air passenger service
Cameras
Swimsuits
Restaurants
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The Marketing Mix and the Marketing
Environment
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 12th ed. Copyright ©
2003 by Houghton Mifflin Company, Adapted with permission.
Copyright © Houghton Mifflin Company. All rights reserved.
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Chapter Quiz
1. By selling Christmas trees from late November
through December, Home Improvement is providing
__________ utility.
a)
b)
c)
d)
e)
form
possession
place
time
marketing
2. Markets are classified as either
a)
b)
c)
d)
e)
producer or consumer.
institutional or reseller.
governmental or institutional.
reseller or consumer.
consumer or business-to-business
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Chapter Quiz
3. The elements of the marketing mix are
a)
b)
c)
d)
e)
product, price, merchandising, and promotion.
markets, goods, pricing, and transportation.
product, buyers, sellers, and price.
product, price, distribution, and promotion.
product, markets, buyers, and sellers.
4. The effects of economic conditions on consumers’
ability and willingness to buy would best be called
__________ forces.
a)
b)
c)
d)
e)
technological
Sociocultural
competitive
economic
legal and regulatory
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Chapter Quiz (cont’d)
5. The first stage in the development of a marketing
plan is to
a)
b)
c)
d)
e)
formulate a detailed marketing objective.
select a target market.
assess the marketing environment.
develop a new product.
monitor and evaluate the marketing program.
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Answers to Chapter Quiz
1. By selling Christmas trees from late November
through December, Home Improvement is providing
__________ utility.
a)
b)
c)
d)
e)
form
possession
place
time
marketing
2. Markets are classified as either
a)
b)
c)
d)
e)
producer or consumer.
institutional or reseller.
governmental or institutional.
reseller or consumer.
consumer or business-to-business
Copyright © Houghton Mifflin Company. All rights reserved.
13 - 28
Answers to Chapter Quiz (cont’d)
3. The elements of the marketing mix are
a)
b)
c)
d)
e)
product, price, merchandising, and promotion.
markets, goods, pricing, and transportation.
product, buyers, sellers, and price.
product, price, distribution, and promotion.
product, markets, buyers, and sellers.
4. The effects of economic conditions on consumers’
ability and willingness to buy would best be called
__________ forces.
a)
b)
c)
d)
e)
technological
Sociocultural
competitive
economic
legal and regulatory
Copyright © Houghton Mifflin Company. All rights reserved.
13 - 29
Answers to Chapter Quiz (cont’d)
5. The first stage in the development of a marketing
plan is to
a)
b)
c)
d)
e)
formulate a detailed marketing objective.
select a target market.
assess the marketing environment.
develop a new product.
monitor and evaluate the marketing program.
Copyright © Houghton Mifflin Company. All rights reserved.
13 - 30