Chapter 10 Class Notes

Contents of Chapter 10 Class Notes


Relationship Marketing Definition:
Organizations efforts to develop a long term, cost effective link with individual customers for mutual benefit.

Handout...Unisys system helps companies

Handout...Using Computers to Divine Who Might Buy a Gas Grill

Indicate the developments and benefits of relationship marketing.

3 key elements link the organization to its customers:

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Evaluating the Markets and Sales Forecasting

Need to measure the sales potential of the chosen markets.

Market Potential--Industry wide, need to specify time frame and level of industry marketing activities.

Sales Potential--Maximum % of Mkt. potential that a single firm within an industry expects to obtain - absolute limit.

Breakdown approach: economic-mkt. potential-sales potential
Buildup approach: # of potential buyers purchases * # buyers in area, same for each area, then add areas to calculate total market potential. Then estimate the proportion for the company.

Sales penetration= Actual sales/Sales potential

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Developing Sales Forecasts

Sales forecast is the amount of a product that a company actually expects to sell during a specific period at a specified level of marketing. Actual instead of potential. Can be short term, medium term or long term.

Methods: Choice depends on costs, type of product, characteristics of market, time span of the forecast, purpose of the forecast, stability of historical data, availability of required information and forecasters expertise and experience.

Marketers will generally use more than one method.


Marketers will look at the sales potential of a customer (LCV) for all its products as opposed to the market of one product with the use of relationship marketing.

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