Relationship Marketing and Market Definition

Study Notes

Aims to create, maintain, and enhance strong value-added relationships with customers and stakeholders.
Focused on long-term customer loyalty rather than short-term sales.

A market consists of actual and potential buyers of a product or service.
Buyers share needs or wants that can be satisfied through exchange.
Market size is influenced by common needs, available resources, and willingness to engage in exchange.
Originally referred to a physical location for exchanges, now encompasses various product classes (e.g., clothing market, electronics market).

Merchandising Function: Comprises product planning, development, standardization, buying, and assembling.
- Product Planning and Development: Involves idea generation, screening, and prototype development, factoring in consumer purchasing power and market segmentation.
- Standardization and Grading: Involves setting standards for products to ensure quality (e.g., beverage sizes like Sprite and Coke).
- Buying and Assembling: Marketing institutions like wholesalers and retailers purchase goods to resell at lower prices.
- Selling: Involves selling goods through various promotional strategies to attract target customers.
Physical Distribution: Includes storage and transportation of goods.
- Storage: Holding inventory to meet future demands.
- Transportation: Movement of goods from manufacturers to consumers.
Auxiliary Functions: Support marketing activities.
- Marketing Finance: Involves extending credit to customers and obtaining capital from various sources.
- Risk-Bearing: Addresses uncertainties and potential losses in business operations.
- Market Information: Collecting and analyzing market data regarding consumer behavior and competition.

Stimulates aggregate demand, enlarging market size and driving economic growth.
Encourages individuals to work harder for additional income to purchase goods and services, which in turn monetizes the economy.
Aids in discovering entrepreneurial talent, acting as a multiplier for managers and entrepreneurs.
Sustains and improves employment levels by managing inventory and production needs.
Reduces inventory losses through better inspection and management practices.
Provides reliable records to enhance production planning and financial reporting.

Marketing is centered on satisfying needs and wants through exchange.
Exchange involves obtaining a desired object by offering something of value in return.
Allows for specialization and increased productivity within society.
Five Conditions for Exchange:
- At least two parties involved.
- Each party possesses something of value for the other.
- Parties can communicate and deliver their offers.
- Each party has the freedom to accept or reject offers.
- Each party finds it desirable to engage with the other.
Successful exchanges result in mutual benefits, creating value akin to that generated through production.