Download Anonymous Student #2

Anonymous Student #2
Paper #1 (Chapter 1)
MKT 201 - WEB
9/5/2010 - FALL 2010
1. According to your textbook, What is "Marketing?"
The understanding of marketing has evolved over the years from focusing on the more concrete ideas of
product, price, place and promotion to include instead the more active components of creating,
communicating, delivering and exchanging. For instance, rather than looking simply at goods and
services, marketing now looks at the process of creating offerings of value including the collaborating
with customers and suppliers. Whereas promotion looked almost solely at advertising, we now have a
broader look at all communication involved with the customer. The place component highlighted making
the product available to the customer to purchase, while the new delivering aspect expands on this to
consider doing to in such as way as to optimize the value of the offerings being delivered. Finally, the
previous component looking at price only took into account the monetary amount paid for the product,
while the revised look at exchanging includes the trading of value for offerings, which can be in other
ways than the traditional monetary exchange.
2. What is the rationale for your textbook authors to use the term "offering" instead of products and
services? Explain why this might be a good idea.
The term offering is often used instead of the word product or service because of service-dominated
logic which is "the approach to business that recognizes that customers want value no matter how it is
delivered" (Principles of Marketing, p. 17). It is this importance of value that leads to the new, more
functional definition of marketing discussed under the previous question; that is, creating,
communicating, delivering and exchanging. All of these focus on the value of the offering, which is
determined by the customer depending on if the buyer's needs are met by the offering purchased. An
offering, then, includes the physical product, the intangible service and the price or exchange asked of
the customer. Offering is thus a much more functional and apt term because products or services looks
only at one aspect of the actually three-part offer.
3. Chapter 1 discusses a mathematical formula: Value = Benefits Received - [Price + Hassle]. Explain in
your own words, how this formula works and why it is important.
As mentioned previously, value is determined by the customer depending on if the buyer's needs are
met by the benefits purchased. To break this down further, the customer has needs that they want to
fulfill, so they decide to purchase a company's offering, receiving the benefits of that purchase (Benefits
Received). First, however, the customer must consider the price they must pay for said benefits and if it
is worth the cost in their unique situation. If the price is too high for them, they may decide the offering
is not worth it, or else look elsewhere for a competing offering. If the price is acceptable, the customer
will next consider the hassle of the offering's exchange. The hassle is "the time and effort the consumer
puts into the shopping process" (p. 6). For instance, the consumer may want the offering and like the
price, but if the exchange requires the customer to drive two hours to another town with a trailer for
transport of a product, then the value may still not be worth it. Due to all of these factors, it can be said
that Value = Benefits Received - [Price + Hassle]. This equation is important because benefits received
must always be perceived by the consumers as outweighing both the price and the hassle of the
exchange combined. Offering value to consumers later translates into more value and profit for the
company in return.
4. Explain, in your own words, why many companies use "Marketing Plans."
The four components of marketing that we have discussed―creating, communicating, delivering and
exchanging―are implemented via a marketing plan. A marketing plan is essentially a strategy for
success. First, a corporate strategy is formed, based around a core mission statement. Once a corporate
strategy is formed, strategists combine this with their studies of their applicable markets to create a
marketing plan. This plan is a roadmap for the business, guided by the mission statement which is the
compass by which all business actions are directed. The challenge to a successful marketing plan, then,
is understanding the market, which means understanding the customers―who are they and what do
they like? For a business to truly understand their customers, they must study three aspects: customers
wants and needs, how the customer can and is willing to take part in the exchange of an offering, and
how the customers' value an offering via the personal value equation discussed in the previous question.
With this data, a business knows the ideal offerings to create. This marketing plan is also used in
communicating the offering to the market to make customers aware of its value. Delivery of value is also
based on the marketing plan, as are the exchange options. Finally, after this, feedback from customers
helps to evaluate company performance and adjust market plans to better serve customers even still and
achieve greater success for the company.
4. The textbook argues that Marketing is important for Society, Business and Personally. Explain
several ways that Marketing is important to Society, business and our personal lives.
It is easy to understand how marketing can have an important and positive impact on society, business
and our personal lives after just a brief discussion. The goal of marketing is to deliver value to
consumers, which not only benefits their personal lives, but in turn benefits the company by creating a
reliable customer base, sales increases and profit. Consequently, this also benefits company employees
and their families. Marketing also helps society as a whole, not only by improving individual lives in these
ways, but also by facilitating and encouraging trade, which improves people's lives. Additionally, as the
book summarizes, "because better marketing means more successful companies, jobs are created. This
generates wealth for people, who are then able to make purchases, which, in turn, creates more jobs" (p.
12). Finally, marketing also benefits society and individuals in the broad all-inclusive scheme of things;
when you consider all of the companies communicating valuable and competing offerings to consumers,
they are able to have more choices, be more informed of those choices and thus have greater freedom
by having more options. Having more options and resources enables them to be better equipped in their
pursuit of happiness. "From an economic perspective, more choices and smarter consumers are
indicative of a higher quality of life" (p. 12).
How big of an impact does marketing have on overall GDP? (-2)
Overall Score: 68/70
Instructor Comments: You're off to a great start. Keep it up.