11

Accountancy Business and

Management (ABM)
PRINCIPLES OF MARKETING
Quarter 3 – Week 5 Module
Relationship Marketing and
Customer Value

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ABM 11 – Principles of Marketing
Alternative Delivery Mode
Quarter 3 – Week 5 Module: Relationship Marketing and Customer Value
First Edition, 2020

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 What I Need to Know

This module was designed and written with you in mind. It is here to help you master
the Relationship Marketing and Customer Value. The scope of this module permits it
to be used in many different learning situations. The language used recognizes the
diverse vocabulary level of students. The lessons are arranged to follow the standard
sequence of the course. But the order in which you read them can be changed to
correspond with the textbook you are now using.

Content Standard
The value of customer relations and customer service.

Performance Standard
Develop a program for customer service.

Most Essential Learning Competencies

Define “relationship marketing,” and explain the value of customers.

After going through this module, you are expected to:

1. Understand consumers behavior
2. Perceive and influence consumer decisions

What I Know

Activity 1.

Quick recap from previous lessons: Module 3 & 4

1. What is the importance of relationship marketing?

Relationship marketing is important for its ability to stay in close contact with
customers. By understanding how customers use a brand's products and services
and observing additional unmet needs, brands can create new features and
offerings to meet those needs, further strengthening the relationship.
Relationship marketing helps retain customers over the long term, which results in
customer loyalty rather than customers purchase once or infrequently.

2. How does relationship marketing contribute to customer value and satisfaction?

Relationship marketing is a strategy that emphasizes customer retention,
satisfaction, and lifetime customer value. Benefits include increased word-of-
mouth, repeat business, and a willingness on the customer's part to provide
valuable feedback to the company.
A good relationship marketing strategy is rooted in building customer loyalty and
lasting, long-term engagement with your customer base.

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 Lesson
Relationship Marketing and
5 Customer Value

What’s In

Activity 2. Answer the questions asked.

Why is it important to Describe important

understand consumer influences on the consumer-
behavior? making process.

What’s New
To satisfy the direct demand, businesses must be aware of consumers’ needs and how
they choose products to satisfy those needs such as (1) the importance of the purchase
to the consumer, (2) the willingness of the consumer to shop and compare products
before making the purchase.

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 What Is It
UNDERSTANDING CONSUMER BEHAVIOR
In order to apply the marketing concept effectively, marketers study consumer
behavior. There are two basic type of consumers – final consumers who make purchase
for their own consumption and business consumers who make purchases for their
business or to resell the customers. Both final consumers and business consumer make
purchases to satisfy their wants and needs. By understanding the reasons consumers
buy and the needs and wants they are attempting to satisfy, marketers can make sure
their products and services match what consumers are looking for.

The marketing concept states that marketers must be responsive to their

customers. Successful businesses are those that continually consider the consumers’
wants and needs as they plan and implement their marketing strategies.

You cannot implement the marketing concept without understanding customers.

The study of consumers and how they make decisions is called consumer behavior,
which includes factors that influence how people purchase and use products and
services.

There are several ways to analyze customer needs and to use the information to
make wise marketing decision. There are two types of consumers of interest to
marketers – final consumers and business consumers.

FINAL CONSUMERS
Final consumers buy products or services for personal use. The traditional view
of a consumer is someone who enters a retail store, purchase a product, takes it home,
and uses it. Today the shopping experiences of final consumers may be quite different.
Consumers purchase a mix of products and services and gather information and make
purchases in many different ways, including the Internet. When you go to a local store
to purchase a notebook for your marketing class, you are a final consumer. Family
members taking a trip to a regional shopping center are final consumers.

BUSINESS CONSUMERS
A second category of consumers does not make purchase for personal use.
Business consumers buy goods and services to produce and market other goods and
services or for resale. An example of a business consumer is the manufacture of the
notebook you purchased. The manufacture buys paper, glue, ink, wire, and other
materials to produce the notebook. It will also purchase the raw materials and other
products it needs to produce other products it will sell or will use to package, store,
ship, and promote its products. In each case, when the manufacturer purchase
materials to produce products it will see to its customers, it is a business consumer.
Businesses also buy products and services that are used in their daily operations. Even
though it consumes the products and services as a part of its operations, it is still a
business consumer.

INFLUENCING CONSUMER DECISIONS

In order to remain profitable, businesses must provide customers with products
and services that meet their wants and needs. Knowing what influences a customer’s
buying decision is a key part of implementing the marketing concept. By understanding
what motivates and influences customer purchases, businesses are able to provide the
products and services at the right place and time.

Many internal and external factors influence purchase decisions. Two very
important factors are individual characteristics and the cultural and social
environment.

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INDIVIDUAL CHARACTERISTICS

Each consumer is different from all others. Even though a person is a member
of a family, community, and other important personal, social, and career groups and
organization, a person’s identity is a major influence on decisions and actions. Personal
identity is the characteristics and character that make a person unique. Important
factors that make up personal identity are personality, gender, ethnicity, and age.

• Personality. The first individual characteristics that influences buying behavior

is personality, an enduring pattern of emotions and behaviors that define an
individual. How do you express your personality in the products and services you
choose? Personalities influence buying decisions because everyone has
individual preference based on attitude, self-concept, and lifestyle choices.

• Gender. An individual’s gender influences many decisions and actions. While

gender roles and influences are changing over time and may be strongly
influenced by family and culture, marketers identify differences in the products
and service choices of each gender.

• Ethnicity. A set of characteristics uniting a group based on ancestry, country of

origin, language, and traditions is known as ethnicity. The impact of ethnicity
on a person’s attitudes and actions varies based on individual identity and the
views and values of others.

• Age. A person’s age has a major influence on consumer behavior. The age of a
person generally indicates the types of products and services he/she will be
interested in and the brands and features that are important.

CULTURAL AND SOCIAL ENVIRONMENT

Culture is the history, beliefs, customs, and traditions of a group. A person’s
culture may place a high value on families, so a great deal of time is spent on family
activities, and family members exert a strong influence on individual choices and
decisions.

TYPES OF DECISION MAKING

Consumers spend varying amounts of time and consider different factors when
making decisions.

• Routine Decision Making. It is used for purchases that are made frequently and
do not require much thought. For routine purchases, the consumer is familiar
with the products available, often chooses the same brand repeatedly, or can an
easy substitution if the usual choice is no available.

• Limited Decision Making. It takes more time than routine decision making. Often,
limited decision making is associated with a product that is more expensive or is
purchased less frequently. When you go to the mall to buy a pair of jeans, you
might try on several styles, compare prices, and consider the color and feel of the
fabrics of a few selections before you make a decision. This is an example of
limited decision making.

• Extensive Decision Making. This is for expensive purchases, like an automobile,

a house, or a family vacation. Consumers do not make the decision lightly. They
spend time and effort evaluating alternatives and arriving at a decision. They
want to carefully review their needs and match them with the best choice
possible. Differences among choices may not be evident or may involve a number

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 of factors that consumers need to analyze carefully in order for them to be
comfortable with the decisions.

What’s More
Read this.

The consumer decision-making process

consists of five steps, which are need
recognition, information search,
evaluations of alternatives, purchase and
post-purchase behavior. These steps can
be a guide for marketers to understand
and communicate effectively to
consumers. One note is that consumers
do not always move in the exact order
through the process; it can depend on the
type of product, the buying stage of the
consumer and even financial status.

What Have I Learned

Activity 3.

Studying consumer behavior is important because this way marketers can

understand what influences consumers’ buying decisions. By understanding how
consumers decide on a product they can fill in the gap in the market and identify the
products that are needed and the products that are obsolete.

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 What I Can Do
Activity 4. Working in Teams

1. Identify ten products and services that members believe are typically used by
Final Consumers. Now review each product and service on the list and discuss
whether it could be used by a business consumer. As a team, identify
similarities and difference in how the products and services would be marketed
to each of the groups.

2. Find a product that the team agrees would typically be purchased using each
of the three types of decision making. Now compare where each product is
usually purchased, what factors are most important in deciding what to
purchase, and what information consumers need to order to decide what
product or brand to purchase.

Assessment
Activity 5.
MULTIPLE CHOICE: Read the statement carefully and choose the correct answer:
1. Which of the statements are TRUE:

a. The marketing concept states that c. Successful businesses are those

marketers must be responsive to that continually consider the
their customers. consumers’ wants and needs

b. In order to apply the marketing d. All of the above

concept effectively, marketers study
consumer behavior.

2. The study of consumers and how they make decisions is called:

a. Consumer Behavior c. Final Consumer

b. Business Consumer d. Decision Making

3. When you go to a local store to purchase a notebook for your marketing class, you
are considered:

a. Decision Maker c. Final Consumer

b. Consumer Behavior d. Business Consumer

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4. This consumer buy goods and services to produce and market other goods and
services or for resale.

a. Final Consumer c. Business Consumers

b. Decision Maker d. Consumer Behavior

5. This individual characteristics influence buying decisions because everyone has

individual preferences based on attitude.

a. Gender c. Ethnicity
b. Age d. Personality

6. This trait generally indicates the types of products and services he/she interested in.

a. Ethnicity c. Age
b. Personality d. Gender

7. While ________ roles and influences are changing over time and may be strongly
influenced by family and culture.

a. Gender c. Ethnicity
b. Personality d. Age

8. This decision making is not strictly for more expensive items.

a. Routine Decision Making c. Limited Decision Making

b. Extensive Decision Making d. None of the above

9. Businesses use this decision making when making regular purchases such as
operating supplies or standardized raw materials that.

a. Extensive Decision Making c. Routine Decision Making

b. Limited Decision Making d. Personal Decision Making

10. Which of the following is not one of the important factors that make up personal
identity?

a. Gender c. Career

b. Age d. Personality

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 Additional Activities
Make a research on the series of steps each time customers make a purchase
decision.

References
Aberte, L. (n.d.) Relationship marketing.
https://searchcustomerexperience.techtarget.com/definition/relationship-
marketing

Burrow, James L. (2017) Foundations of marketing (Philippine Edition), Abiva

Publishing House, Inc., Abiva Bldg., 851 G. Araneta Ave., 1113 Quezon City

Consumer behavior in marketing – patterns, types, segmentation

https://www.omniconvert.com/blog/consumer-behavior-in-marketing-
patterns-types-segmentation/

Understanding consumer behavior. https://www.slideshare.net/ericmoe18/chap-4-

understanding-consumer-behaviour

Understanding the consumer decision-making process: a marketing must

https://study.com/academy/lesson/understanding-the-consumer-decision-
making-process-a-marketing-must.html