SAMAL ISLAND CITY COLLEGE

Datu Taganiog, Brgy Penaplata, Samal Distirct

Island Gardedn City of College
Davao Del Norte, Philippines

BUSINESS MARKETING

Photo source: printingforless

Course Content: The course deals with the principles and practices in marketing goods and
services. It also focuses on the development of integrated marketing programs that will help grow
business.

Prepared by:

Kate Nalla D. Ferolin, CHIA

BSTM- Faculty

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BUSINESS MARKETING
Chapter 2: Customer Relationship: Customer Service

Photo source: TwoTwocreative

Objectives
At the end of this chapter, the students will be able to:

• Define relationship marketing;

• Explain the values of customers;
• Identify and describe relationship development strategies; and
• Illustrate successful customer service strategy in the Philippine Business enterprise.

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I. INTRODUCTION
The first three steps in the marketing process are
understanding the marketplace and customer needs,
designing a customer-driven marketing strategy, and
constructing a marketing program. These all lead up to
the fourth and most important step: the building
profitable customer relationships.

Image taken from: BlinkSigns

II. PRESENTATION AND DISCUSSION

What is Relationship Marketing?

 according to Serrano, it includes activities aimed at developing and managing trusting and
long-term relationships with larger customers. And a strategy designed for customer
loyalty, interaction, and long-term engagement to be fostered. Customer Relationship
focuses more on long-term customer retention than acquiring large numbers of new and
potentially single-transaction customers.

 Relationship Marketing is also designed to develop strong connections with customers by

providing them information directly suited to their needs and interests and by promoting
open communication.
Characteristics of Relationship Marketing:

1. It focuses on the long-term rather than the short-term.

2. It focuses on partners and customers rather than on the
company’s products.
3. It puts more emphasis on customer retention and growth
than on customer acquisition.
4. It relies on cross-functional teams rather than on
departmental-level work.
5. It relies more on listening and learning than on talking.
Relationship Marketing is designed to develop strong
connections with customers by providing them with
information directly suited to their needs and interests by
promoting open communication.
Photo source: cleversolutions
Relationship marketing calls for new practices within the 4p’s:

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 *More products are customized to the customers’
preferences.

*New products are developed and designed cooperatively

with suppliers and distributors.

*The company will set a price based on the relationship

with the customer and the bundle of features and services
ordered by the customer.

*In business-to-business marketing, there is more

negotiation because products are often designed for each
customer.

*RM favors more direct marketing to the customer, thus

reducing the role of middlemen.

*RM favors offering alternatives to customers to choose

the way they want to order, pay for, receive, install, and
even repair the product.

*RM favors more individual communication and dialogue

with customers.

*RM favors more integrated marketing communications to

deliver the same promise and image to the customer.

*RM sets up extranets with large customers to facilitate

information exchange, joint planning, ordering, and
payments

Images taken from: MBAprojects

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BENEFITS OF RELATIONSHIP MARKETING

In the business world, retaining customers has a lesser cost at least

eight times compared to acquiring new ones. Thus, this marketing
capitalizes on the same fact and is beneficial to the company in
several ways

These benefits are:

Understanding customer characteristics

the company can segregate its customers into groups based on their characteristics like
purchasing power, frequency and volume of sale transactions. It also helps the company
get valuable feedback from its customers and understand their needs and expectations.

Delivery and meeting expectations

if the company knows what its customers’ needs are, it will help reduce wastage due to
trial and error methods. It is easier to create a product if the features and specifications of
the product are known.

Repeat Business Sellers

should maintain good attitude to the buyers. By doing this, buyers will feel that they do
not need to switch sellers
.
Prevents negative transition
trust and loyalty go hand in hand and it is super beneficial for all business. It will help
prevent customers from turning to competitors. 5. Word-of-mouth marketing a happy
customer will always promote business by telling ten other people about the amazing
services or performance received from a company.

Increasing customer base

satisfied existing customer is 100% more likely to recommend a product/service to a
prospective customer. Apart from customer, referrals, there are several other ways to
increase customer satisfaction by employing methods of utilizing social networking
websites, blogs, informal surveys, benefits on loyalty cards, timely response to complaints
and requests as a constant reminder of its presence around and retention equity is
improved by enhancing customer satisfaction.

Reduced marketing cost Benefits

also include lesser marketing costs and more value creation. This can be explained by
stating the following statistics: every 5% increase in customer retention can increase a
company’s annual profits from at least 25% to as much as 125%, while simultaneously
leading to a reduction of 10% in marketing costs. An existing customer will spend 33%
more than a new customer to buy a company’s product/service.

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Minimization of customer price sensitivity
a happy customer will be willing to pay more for a product if there is a guaranteed
satisfaction of products and after sales services attached to the price.

Identification with the company

the benefits are reaped both by the company and the customers. It helps customers
identify more with the company. Keeping your communication lines open and keeping in
touch with the customers makes them feel like they are being valued. It will keep
customers coming in and build brand equity for the company in the long run.

Product Market Expansion

the company’s employees must be ready to deliver beyond the company’s boundaries on
customer demand.

Examples of companies using relationship marketing are:

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CUSTOMER VALUE
It is the relationship between benefits and the costs including money, stress, and time to sacrifice
that is necessary to get those benefits. Or simply stated in a mathematical equation:

Benefits – Cost = Customer Value

Customer Value entails extraordinary delivery of four value-points or components known also as
SQIP:

SERVICE the intangible value offered to customers.

QUALITY customer’s perception of how well a company’s products and

services meet expectations.

IMAGE customers’ perception of the company or business they interact

with.

PRICE the price a company can command for its products and services
that its customers are able and willing to pay.

DELIVERING CUSTOMER VALUE

Three ways a company can establish customer value to its customer base:

1. Provide consumer with the best cost.

2. Provide the consumer with the best product.
3. Provide the consumer with the best service.

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 Importance of Customer Value

1. Designing and providing superior customer value are the keys to

successful business strategy in the 21st century.

2. Value reigns supreme in today’s marketplace and market-space.

3. Customers will not pay more than a product is worth and will reward
excellence.

4. A customer-centric culture provides focus and direction for the

organization, ensuring that exceptional value will be offered to
customers.

4. Designing and delivering superior customer value propels

organizations to market leadership positions in today’s highly
competitive global markets – absolute advantage

6. Providing outstanding customer value has become a mandate for

management.

7. In choice-filled arenas, the balance of power has shifted from

companies to value- seeking customers.

8. Managing customer value is even more critical to organizations in

the
new service and information-based economy

9. Firms not providing adequate value to customers will struggle or

disappear – customer value is a key ingredient in building competitive
advantage.

10. Today’s customers are quite smart and sophisticated and are
looking for companies that: a. Create maximum value for them based
on their needs and wants, and b. Demonstrate that they value their
business.

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CREATING MORE CUSTOMER VALUE?

▹Understand what drives value for customers

▹Understand value proposition

▹Identify the customers and segments where the company can create more value relative to
competitors

▹Create a win-win price

▹Focus investments on the most valuable customers

Customer satisfaction

Defined as a measurement that determines how happy customers are with a company's
products, services, and capabilities. It depends on the products perceived performance relative
to a buyer’s expectations.

It is also an information, including surveys and ratings, can help a company determine how to
best improve or changes its products and services.

Customer Relationship Development Strategies

Customer Relationship is a marketing approach that focuses on creating an ongoing and long-
term relationship with customers.

Benefits in developing and implementing customer

relationship 1. Consistent customer experience Customer:

1.Consistent customer experience Customer Lifecycle

Journey
2.Customer feedback
3.Customer Profitability
4.Customer advocate
5. Innovation

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Strategies in Developing Customer Relationship

 Make every customer interaction count

 Follow-through on commitments and claims

about products or services

 Develop Employees

 Offer benefits and product value that responds to

the customer’s desires

 Treat customers as individual who are

respected and valued. Strategies in
Developing Customer Relationship

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 Listen to customers

 Build a strong brand identity

 Surround customers with valuable information by

using emails, websites, content, social media, and
other methods of outreach but do not be invasive.

 The business must have a website.

 Reward loyal customers

 Nothing strengthens a bond more that appreciation

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  Create a blog about the business where discuss is
more casual and inviting

Customer Relationship Levels and Tools

Companies can build customer relationships at many levels, depending on the nature of the target
market.
A company with many low-margin customers may seek to develop basic relationships with them.

For example:
Nike does not phone or call on all of its customers to get
to know them personally. Instead, Nike creates
relationships through brand-building advertising, public
relations and its website (www.nike.com)
Unlike in markets with few customers.

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 For example:
Nike sales representatives work closely with the
Sports Authority, Dick’s Sporting Goods, Foot Locker
and other large retailers. In between this two examples,
other levels of customer relationships are appropriate.

The Changing nature of Customer Relationships

Significant changes are occurring in the ways in which companies are relating to their customers.
Yesterday’s big companies focused on mass marketing to all customers at arm’s length.

Today’s companies are building deeper, more direct and lasting relationships with more carefully
selected customers.

Here are some important trends in the way companies and customers are relating to one another.

Relating with more carefully selected customers

uses selective relationship management to target fewer, more profitable
customers.
Relating for the long term
uses customer relationship management to retain current customers and build
profitable, long-term relationships.
Relating directly
uses direct marketing tools (telephone, mail order, kiosks, Internet) to make
direct connections with customers.

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 Many brands are creating dialogues wit consumers via
their own or existing online social networks to
supplement their marketing campaigns, companies
now routinely post their latest ads and made-for-the-
web videos on video sharing sites. They join social
networks. Or they launch their own blogs, online
communities, or consumer-generated review systems,
all with the aim of engaging costumers on a more
personal, interactive level.

Twitter for example, organizations ranging from

Dell, Dunkin’ Donuts have created Twitter pages
and promotions. They use “tweets” to start
conversations with Twitters more than six million
registered users, address customer service issues,
research customer reactions and drive traffic to
relevant articles, websites, contests, videos and
other brand activities

Similarly, almost every company has something

going on Facebook these days. Starbucks has
more than six million Facebook “fans”; Coca-Cola
has more than five million. Networks like Facebook
can get consumers involved with and talking about
a brand.

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 For Example:

Honda’s “Everybody Knows Somebody Who Loves

Honda “Facebook” page allows visitors to upload photos
of their cars or link up to owners of their favorite old
Hondas worldwide. It asks people to help prove that “we
all really can be connected through Honda love”. The
campaign netted about two million Facebook friends in
less than two months, more than double previous fan
levels.

Consumer-Generated Marketing

It is a growing part of the consumer dialogue, by which consumers themselves are playing a
bigger role in shaping their own brand experiences and those of others.

Some companies are asking their consumers for new

product ideas.
For Example:
Coca-colas Vitamin water brand recently set up a
Facebook app to obtain consumer suggestions for a
new flavor, promising to manufacture and sell the
winner.

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Also, other companies ask consumers for new product ideas.

For Example:

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Partner Relationship Management
Refers to working closely with partners in other company departments and outside the company to
jointly bring greater value to customers.
Partners inside the company
Every function area interacting with customers
• Electronically
• Cross-functional teams

Partners outside the company

This is how marketers connect with their suppliers, channel partners, and competitors by developing
partnerships.

Supply chain
It is a channel that stretches from raw materials to components to final products to final buyers
• Supply management
• Strategic partners
• Strategic alliances

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Customer Service Strategy in the Philippine Business Enterprise

CUSTOMER SERVICE is the act of taking care of the customer’s needs by providing and delivering
professional, helpful, high quality service and assistance before, during, and after the customer’s
requirements are met.

Elements of the Customer Service strategy:

 A vision for customer service

 Assessing customer needs
 Hiring for Service
 Organizational goals for customer service
 Customer Service Training
 Employee Accountability
 Rewarding Good Service

THE SUKI SYSTEM IN THE PHILIPPINES

SUKI SYSTEM
It is an of patronage in which a customer regularly buys their merchandise from a certain client.

SUKI
Refers to a partner system of doing business in the Philippines, wherein a customer buys certain
products from a particular vendor, who in turn offers discounts and other perks for such exclusivity.
Filipinos use the word suki to refer to both buyers and sellers, indicating their equal roles and
obligations in an eponymous relationship.

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 ACTIVITY 1
Name: Date:
Session: Score:

Enumeration (20 points)

A. Important trends in the way companies and customers are relating to one another.
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
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B. Relationship Development Strategies

………………………………………………………………………………………………………………
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C. New Tools for Relating Include:

………………………………………………………………………………………………………………
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………………………………………………………………………………………………………………
………………………………………………………………………………………………………………

D. Social Network (any 1)

………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
………………………………………………………………………………………………………………

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 ACTIVITY 2.
Name: Date:
Session: Score:

I. Explain the Importance of understanding customers and the market place.

………………………………………………………………………………………………………………
………………………………………………………………………………………………………………
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………………………………………………………………………………………………………………
II. Discuss customer relationship management and identify strategies for creating value for
customers and capturing value from customers in return.
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III. Discuss the different relationship marketing strategies. Which do you think is the most effective
to use?
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……………………………………………………………………………………………………………

ACTIVITY 3
Name: Date:
Session: Score:

INSTRUCTION: In the table provided below, give an example of other online social networks that a
company can use in their Marketing campaigns to post latest ads and made-for-the-web videos on
video sharing sites. (2 points per example)

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Chapter 3: Market opportunity analysis and Consumer Analysis

Objectives
At the end of this chapter, the students will be able to:

 Distinguish between strategic and marketing planning in terms of objectives and

processes;
 Analyze the elements of macro- and micro-environment and their influence to marketing
planning.
 Define marketing research; its importance to a business enterprise and identify the steps
in marketing research;
 Identify and segment market for a product or service; and
 Select the appropriate target market segment and it’s positioning.

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 What is market opportunity analysis?

A tool to identify and assess the

attractiveness of business opportunity.
Often clients come to us with what they
think is a great marketing or product idea.
After we do some research we find out that
while it's a great idea, they are late to
the market so they missed the window
of opportunity.

Strategic Marketing

Strategic Marketing
 The way a firm effectively differentiates itself from
its competitors by capitalizing on its strengths (both
current and potential) to provide consistency better
value to customers than its competitors.
 It consists selling your product in such a way that
you achieve your goal.

Examples:
o Social Networks and Viral Marketing.
o Paid Media Advertising.
o Internet Marketing.
o Email Marketing.
o Direct Selling.
o Point-of-Purchase (POP) Marketing.
o Co-Branding, Affinity, and Cause Marketing.
o Conversational Marketing.

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Tactical Marketing

 focuses on the details to achieve that goal. With a strategy in place, the actions
or tactics needed to reach your goal can be set into motion

Examples:

 Writing blogs.
 Engaging clients on social media.
 Attending conferences.
 Requesting testimonials.
 Sending client surveys.

Both tactics and strategies play an important role in marketing your business, and your strategy
will define what tactics you use.

Know your Customers

To create tactics to support your marketing strategies, create detailed profiles of your customers.

geographic
location

other marital
information status

Learn
parental
age
status

educational
gender
level

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 Marketing Channels

Used to implement tactics.

Selecting the right advertising media, public
relations, cause marketing, sports marketing public
relations and distribution channels are critical to
creating effective tactics

THE MARKETING ENVIRONMENT

A company’s marketing environment consists of the actors and forces outside marketing
management’s ability to build and maintain successful relationships with target customers.
The Marketing Environment consist of the three levels of the environment they are:

 Micro (internal) environment that consists of the actors close to the company
that affect its ability to serve its customers such as the company, suppliers,
marketing intermediaries, customer markets, competitors and publics.

 Meso environment- the industry in which a company operates and the industry’s
market

 Macro (national) environment it consists of the larger societal forces that affect
the microenvironment such as demographic, economic, natural, technological,
political, and cultural forces.

MARKETING
INTERMEDIARIES
PUBLICS COMPETITORS

SUPPLIERS PUBLIC

THE COMPANY
MICRO- CUSTOMERS
ENVIRONMENT
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 • THE COMPANY refers to the internal environment of the company.
This includes all departments, such as management, finance,
research and development, purchasing, operations and accounting.

 THE SUPPLIERS it forms an important link in the company’s overall

customer value delivery network.
It provides the resources needed by the company to produce its
goods and services.

 MARKETING INTERMEDIARIES help the company promote, sell,

and distribute its products to final buyers.
They include resellers, physical distribution firms, marketing services
agencies, and financial intermediaries

 COMPETITORS are also a factor in the microenvironment and

include companies with similar offerings for goods and services.
It is an organization or country engaged in commercial or economic
competition with others

 CUSTOMERS are the most important actors in the company’s

microenvironment.

 PUBLICS is any group that has an actual or potential interest in or

impact on an organizations ability to achieve its objectives.

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 Five types of consumer markets:

Consumer Markets- consist of individuals and households that

buy goods and services for personal consumption

Business markets the ones who buy goods and services for
further processing or use in their production processes

Reseller markets are the ones who buy goods and services to
resell at a profit

International markets consist of these buyers in other countries,

including consumers, producers, resellers and governments.

THE MACRO-ENVIRONMENT
Refers to all forces that are part of the larger society and affect the micro-environment.
The micro environment is known as PESTEL, that is: Political. Economical, Social, Technological,
Environmental and Legal

THE DEMOGRAPHIC ENVIRONMENT

The demographic environment includes such

factors as age distributions, births, deaths,
immigration, marital status, sex, education,
religious affiliations, and geographic
dispersion—characteristics that are often used
for segmentation purposes

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The Changing Age Structure of the Population
Gradual shifts in the age distribution of
a population present both challenges and
opportunities for sustainable development. ...
This pair of changes, known together as the
demographic transition, leads initially to rapid
growth and a younger population, driven by
an early reduction in child mortality.

The Three largest groups are:

 Baby Boomers:
Baby boomers were born between 1946
and 1964. They're currently between 57-75
years old (71.6 million in the U.S.)

 Generation X:
Gen X was born between 1965 and 1979/80
and is currently between 41-56 years old (65.2
million people in the U.S.)

 The Millennials
Gen Y or Millennials, were born between 1981
and 1994/6.

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MARKETING RESEARCH

It is a systematic design, collection, analysis, and reporting of data relevant to a specific marketing
situation facing an organization. Companies use marketing research in a wide variety of
situations.

For Example:

The marketing research gives marketers insights into consumer motivations, purchase behavior
and satisfaction. It can help them to assess market potential and market share or measure the
effectiveness of pricing, product, distribution, and promotion activities.

The Four Marketing Research process:

Developing the Implementing the

Defining the Interpreting and
research plan for research plan,
research reporting the
collecting collecting and
objectives findings
information analyzing data

Defining the Problem and Research Objectives

 Marketing managers and researchers must work closely together to define the
problem and agree on research objectives.
 Defining the problem and research objectives is often the hardest step in the
research process. The manager may know that something is wrong, without
knowing the specific causes.

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The Three Objectives of Marketing Research Project:

Exploratory Research
Defined as a research used to investigate a problem
which is not clearly defined. It is conducted to have a
better understanding of the existing problem, but will not
provide conclusive results.

Descriptive Research
A type of research that describes a population, situation,
or phenomenon that is being studied. It focuses on
answering the how, what, when, and where questions If
a research problem, rather than the why.

Causal Research
Causal research, also called explanatory research, is the
investigation of (research into) cause-and-effect
relationships. To determine causality, it is important to
observe variation in the variable assumed to cause the
change in the other variables, and then measure the
changes in the other variables.

For example:

When a company wants to study the behavior of their consumers towards the changing price of
their goods, they use causal research. They might test the behavior of customers depending on
different variables.

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Developing the Research Plan

Once the research problem and objectives have been

defined, researchers must determine the exact information
needed, develop a plan for gathering it efficiently, and present
the plan to management.

Developing the Overall Research Plan

Step 1 - Articulate the research problem and objectives.

Step 2 - Develop the overall research plan.
Step 3 – Collect the data or information.
Step 4 – Analyze the data or information.
Step 5 – Present or disseminate the findings.
Step 6 – Use the findings to make the decision.

Research Instruments

A research instrument can include interviews, tests, surveys, or checklists. The Research
Instrument is usually determined by researcher and is tied to the study methodology. This
document offers some examples of research instruments and study methods.

Two main research instruments: The Questionnaire and Mechanical Instruments

The Questionnaire

A questionnaire is a research instrument that consists of a set of

questions or other types of prompts that aims to collect information
from a respondent. A research questionnaire is typically a mix of
close-ended questions and open-ended questions

Mechanical Instruments

Mechanical devices used in primary research data collection

include Galvanometers, eye cameras, eye gaze recorders,
audiometers, and tachistoscopes that show an image or ad for a
brief flash. data collection techniques designed to capture data
associated with a research activity such as observation or
experiment.

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SEGMENT MARKET

A market segment is a group of people who

share one or more common characteristics,
lumped together for marketing purposes.
Each market segment is unique, and
marketers use various criteria to create a
target market for their product or service

Market segments are known to respond

somewhat predictably to a marketing strategy,
plan, or promotion. ...

For example, common characteristics of

a market segment include interests, lifestyle,
age, gender, etc.
Common examples of market segmentation include geographic, demographic, psychographic,
and behavioral.

One technique used to identify a target market is market segmentation.

The five basic forms of segmentation are:

1. demographic (population
statistics)
2. geographic (location)
3. psychographic (personality or
lifestyle)
4. benefit (product features)
5. volume (amount purchased).

Steps in Market Segmentation

 Identify the target market. The first and

foremost step is to identify the target market
 Identify expectations of Target Audience
 Create Subgroups
 Review the needs of the target audience
 Name your market Segment
 Marketing Strategies
 Review the behavior
 Size of the Target Market

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 Appropriate Target Market Segment and It’s Positioning

In marketing, segmenting, targeting and positioning (STP) is a broad framework that

summarizes and simplifies the process of market segmentation.
Targeting is the process of identifying the most attractive segments from
the segmentation stage, usually the ones most profitable for the business.

Brand positioning is defined as the conceptual place you want to own in the target consumer's
mind — the benefits you want them to think of when they think of your brand. An effective brand
positioning strategy will maximize customer
relevancy and competitive distinctiveness, in
maximizing brand value.

Here are some tips to help

you define your target market:

 Look at your current customer base.

 Check out your competition.
 Analyze your product/service.
 Choose specific demographics to target.
 Consider the psychographics of your target.
 Evaluate your decision.
 Additional resources.

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 ACTIVITY 4

Name: Date:

Session: Score:

MULTIPLE CHOICE
INSTRUCTION: Please choose the correct answer.

1. The "four P's" of a marketing mix are:

a) Product, Price, Profit, Promotion
b) People, Product, Place, Promotion
c) Promotion, Production, Price, Place
d) Product, Price, Place, Promotion
e) Profit, Place, Price, Product

2. The process of classifying people who form a given market into even smaller groups is called:
a) market development
b) mass marketing
c) consumer market
d) macro-marketing
e) market segmentation

3. When Campbell's makes nacho cheese soup for Texas and Cajun gumbo soup for Louisiana,
what kind of segmentation is it practicing?
a) Geographic
b) Psychographic
c) Behavioral
d) Demographic
e) Political

4. ________ consists of evaluating each market segment's attractiveness and selecting one or
more segments to enter.
a) Positioning
b) Mass customization
c) Market targeting
d) Market segmentation
5.________ is defined as the conceptual place you want to own in the target consumer's mind

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 a) Market segment
b) Brand positioning
c) Segment Market
d) Target Market

6.Geographicsegmentation is about:

a) Dividing consumer groups based on lifestyles

b) Dividing markets based on location
c) Understanding the benefit, the product has to offer
d) Dividing consumer groups based on social status

7. ________ is any group that has an actual or potential interest in or impact on an organizations
ability to achieve its objectives.

a) COMPETITORS
b) CUSTOMERS
c) COMPANY
d) COMPETITORS
e) MARKETING INTERMEDIARIES

8. _______ the ones who buy goods and services for further processing or use in their production
processes
a) consumer Markets
b) Business markets
c) Reseller markets
d) International markets

9. It means location

a) demographic
b) geographic
c) psychographic
d) benefit
e) volume
f) place

10. An amount the person purchased

a) Total
b) volume
c) benefit
d) consumer

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BUSINESS MARKETING
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BUSINESS MARKETING