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CHAPTER
1
The Nature of Marketing
CHAPTER SUMMARY
The function of marketing is to bring buyers and sellers together, and the primary emphasis of
marketing is in the exchange process requiring two or more parties to trade things of value.
Learning Objective 1
Define marketing and discuss marketing in its broadened sense.
Marketing is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that will satisfy individual and
organizational objectives. Effective marketing consists of a consumer-oriented mix of business
activities planned and implemented by a marketer to facilitate an exchange so that both parties profit
in some way. Consumers may exchange money, votes, or something else to obtain the marketer’s
offering.
Learning Objective 2
Identify the elements of the marketing mix.
The marketing mix consists of four major elements: product, place (distribution), promotion, and.
price. These are basic to any organization and are adjusted and combined by the marketing manager
to achieve the organization’s goals.
Learning Objective 3
Understand that marketers must contend with external environmental forces.
The marketing environment consists of uncontrollable forces that influence consumer behavior and
represent both opportunities for, and constraints, to an organization. The marketing manager’s task
is to adjust an organization’s marketing mix to cope with the external environment. This involves
anticipating environmental changes that will affect the organization. Correct environmental
assessment makes marketing decisions more successful.
Learning Objective 4
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Chapter 1 The Nature of Marketing
Explain the marketing concept.
The marketing concept is a philosophy of business and a set of objectives enabling organizations to
offer superior customer value. According to this concept, marketing-oriented organizations can
succeed by focusing on consumers’ wants and needs, long-term profitability, and an integrated
marketing effort. Marketing-oriented organizations embrace the idea that they can satisfy customers
needs better than their competitors. Product orientation and sales orientation are less effective
alternative philosophies.
Learning Objective 5
Recognize the contribution of marketing to a country’s economy and way of life.
Marketing delivers a standard of living to society. The aggregate of all organizations’ marketing
activities, especially their transportation and distribution activities, affects a society’s economic wellbeing. The efficiency of the system for moving goods from producers to consumers is an important
factor determining a country’s quality of life.
Learning Objective 6
Define the societal marketing concept.
The societal marketing concept, which can be in perfect harmony with the marketing concept,
stresses the need for marketers to consider the collective needs of society as well as individual
consumer desires and the organization’s need for profits. It recognizes that every consumer, as a
member of society, has both long-term and short-term needs.
Learning Objective 7
Explain the importance of studying marketing.
Marketing offers many possible career opportunities to students (see Appendix A at the end of the
book). In addition, marketing knowledge and skills can help you to become a more knowledgeable
consumer.
VOCABULARY QUIZ
Chapter 1 The Nature of Marketing
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The purpose of this quiz is to determine how familiar you are with the key concepts in this chapter.
From the list of vocabulary, select the one that most accurately describes the definitions of the
concept or marketing term. Write the letter in the space provided.
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
Exchange process
Societal marketing concept
Marketing mix
Superior customer value
Place (distribution)
Price
Uncontrollable variable
Sales orientation
Cross-functional activity
Retailer
Relationship marketing
Manufacturer
Transaction
AA.
BB.
CC.
DD.
EE.
FF.
GG.
HH.
II.
JJ.
KK.
LL.
Marketing
Market
Four Ps of marketing
Product
Channel of distribution
Promotion
Production orientation
Marketing concept
Marketing orientation
Macromarketing
Wholesaler
Ultimate consumer
_____1.
The amount of money or other consideration--that is, something of value--given in
exchange for a product.
_____2.
Marketing activities aimed at building long-term relationships with the people
(especially customers)and organizations that contribute to the company’s success.
_____3.
An individual who buys or uses a product for personal consumption.
_____4.
The basic elements of the marketing mix: product, place (distribution), price, and
promotion; also called the controllable variables of marketing because they can be
controlled and manipulated by the marketer.
_____5.
A force or influence external to the organization and beyond its control.
_____6.
Organizational philosophy that stresses the importance of considering the collective
needs of society, as well as individual consumer’s desires and organizational profits.
_____7.
A group of potential customers that may want the product offered and that has the
resources, the willingness, and the ability to purchase it.
_____8.
The element of the marketing mix that encompasses all aspects of getting products to
the consumer in the right location at the right time.
_____9.
A good, service, or idea that offers a bundle of tangible and intangible attributes to
satisfy consumers.
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_____10.
Chapter 1 The Nature of Marketing
The element of the marketing mix that includes all forms of marketing
communication.
_____11.
The consumer’s attribution of greater worth or better ability to fulfill a need to a
certain product compared to its competitors.
_____12.
The aggregate of marketing activities in an economy or the marketing system of a
society, rather than the marketing activities in a single firm (micromarketing).
_____13.
Organizational philosophy that emphasizes selling existing products, whether or not
they meet consumer needs, often through aggressive sales techniques and advertising.
_____14.
Product, Place (distribution), Promotion, and Price
_____15.
The interchange of something of value between two or more parties.
_____16.
Organizational philosophy that stresses consumer orientation, long-range profitability,
and the integration of marketing and other organizational functions. The marketing
concept, which focuses on satisfying consumers’ wants and needs, is the foundation
of a marketing orientation.
_____17.
A single exchange agreement; the completion of a one-time sale.
_____18.
The sequence of marketing organizations involved in bringing a product from the
producer to the consumer.
_____19.
Organizational philosophy that emphasizes physical production and technology,
rather than sales or marketing.
_____20.
Organizational philosophy that emphasizes developing exceptional skill in
understanding and satisfying customers so that the organization can offer superior
customer value.
_____21.
An organization that recognizes a consumer need and produces a product from raw
materials, component parts, or labor to satisfy that need.
_____22.
An organization that serves as an intermediary between manufacturer and retailer to
facilitate the transfer of products or the exchange of title to those products.
_____23.
An activity carried out by individuals from various departments within an
organization and from out-side the organization, all of whom have a common
purpose.
_____24.
An organization that sells products it has obtained from a manufacturer or wholesaler
to the ultimate consumer. Retailers neither produce nor consume the product.
_____25.
Chapter 1 The Nature of Marketing
The process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that will satisfy
individual and organizational objectives.
LEARNING OBJECTIVES QUIZ
Learning Objective 1
Define marketing and discuss marketing in its broadened sense.
1.
It is best to begin discussing __________ from a business perspective.
(marketing)
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Chapter 1 The Nature of Marketing
2.
Marketing activities are aimed at bringing _________ and ________ together.
(buyers, sellers)
3.
A major marketing ________ is paying ____________ attention to customers’ ________.
(activity, continuous, needs.)
4.
The marketing process begins with _____________ ____________ even before the product
is manufactured.
(customer analysis)
5.
Broadening the marketing concept to include not-_____-________ organizations places the
primary emphasis on the ______________ process.
6.
Each party must gain ___________. Each party contributes something of ________ because
each expects to be _________ by the exchange.
7.
(for-profit, exchange)
(something, value, satisfied)
Effective marketers view making a sale not as the _______ of the process, but as a start of
the organization’s __________ with a customer.
(end, relationship)
8.
Marketers want customers for _______________.
(life)
9.
Effective marketers work to build _______-_________ relationships with their customers.
(long-term)
10.
A ________________ is a group of ____________ customers for a particular product who
are _____________ and __________ to spend money or exchange other resources to obtain
the product.
(market, potential, willing, able)
Learning Objective 2
Identify the elements of the marketing mix.
11.
Product, place, price and promotion are referred to as the ______ _____ of _________.
(four Ps of marketing)
12.
_______________ may be a tangible good or an intangible idea.
(Products)
13.
Chapter 1 The Nature of Marketing
How goods get to the customer involves _________ or ______________activity.
(place, distribution)
14.
Selecting __________, _______________, and other types of distributors is also a place
__________________.
15.
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(retailers, wholesalers, activity)
A ______________ of distribution is the sequence of marketing
organizations involved in bringing a product from ___________ to _______________.
(channel, producer, consumer)
16.
Marketing specialists, or __________________, are hired because they can more
_____________ or more ______________ perform a certain marketing activity for an
organization in a basic marketing channel. (collaborators, efficiently, effectively)
17.
________________ is the means by which marketers “talk to” existing customers and
potential __________.
(Promotion, buyers)
18.
_______________, personal _________, ___________, and sales promotion are all forms of
promotion.
(Advertising, selling, publicity)
19.
The amount of money given in exchange for something is its ___________.
20.
In _________-________-_________ situations, price may be expressed in terms of
volunteered time or effort, votes, or donations.
(not-for-profit)
21.
According to economists, prices are always __________ ____________.
22.
In selecting a marketing mix, each manager realizes that there is “_____ _______ _____” to
mix ingredients.
(no best way)
(price)
(on trial)
Learning Objective 3
Understand that marketers must contend with external environmental forces.
23.
All organizations operate within an external ______________.
(environment)
24.
Managers contend with and cannot govern _____________ forces called ________________
variables which affect both consumers’ behavior and organizations’ development
of effective marketing mixes.
(external, uncontrollable)
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Chapter 1 The Nature of Marketing
25.
_______________ and other _____________ forces might lead to a decline in homebuilding.
(Inflation, economic)
26.
Changes in _____________ ______________ and lifestyles have lead to a change in eating
habits.
(social values)
27.
To plan marketing mixes compatible with the external __________________, marketing
managers must be able to recognize and _____________ uncontrollable variables.
(environment, analyze)
28.
Determining the correct _________ to __________ and to exit the market may rest on
an analysis of the ________________ environment.
(time, enter, external)
Learning Objective 4
Explain the marketing concept.
29.
Marketing managers operating with a ____________ orientation focus their efforts on
physical production.
(production)
30.
The philosophy of an organization with a ____________ orientation is to change
consumers’ minds to fit the product.
(sales)
31.
Companies that have superior skills in understanding and satisfying customers
are _____________-oriented, or market- _______________.
( marketing-, -driven)
32.
The philosophy known as the ________________ _______________ is central to all
effective marketing, thinking, planning and action.
(marketing concept)
33.
_____________ _______________ is the first aspect of the marketing concept.
(Consumer orientation)
34.
Organizations that have accepted the marketing concept try to create goods and
services with the ___________needs in mind.
35.
(customer’s)
Implicit in the marketing concept is the assumption that the organization wishes to continue
to exist. Therefore, _________-_______ profits are accented in this philosophy.
(long-term)
36.
Marketing personnel cannot be isolated from other company _______________.
Chapter 1 The Nature of Marketing
9
Successful organizations view marketing as an ________________ function, not an isolated
business function, hence the term _____________-______________ activity is essential in
the study of marketing activities.
(activities, integral, cross-functional)
Learning Objective 5
Recognize the contribution of marketing to a country’s economy and way of life.
37.
Marketing must be viewed not only in terms of its __________ in the individual
organization but also in terms of the important role it plays in _________________.
(role, society)
38.
Therefore, marketing should be viewed as the activity that ______________ a standard of
__________ to society.
39.
A society’s well being is dependent on the efficiency of the system for __________ goods
from ____________ to consumers.
40.
(delivers, living)
(moving, producers)
To reach a _________ level of well being, a country must improve its _________________.
(higher, macromarketing)
Learning Objective 6
Define the societal marketing concept.
41.
The societal marketing concept can be in perfect ____________ with the marketing concept.
(harmony)
42.
The marketing concept stresses ___________ consumer needs at a profit.
(satisfying)
43.
Conflicts exist between customers’ expressed ___________ for immediate fulfillment, and
the ______________ interpretation of what is good for society.(preferences, organization’s)
Learning Objective 7
Explain the importance of studying marketing.
44.
One reason for studying marketing is that marketing offers many _________
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Chapter 1 The Nature of Marketing
opportunities, including advertising, sales, product management, retail store management,
and others.
(career)
45.
Knowledge of marketing also will help you to become a more knowledgeable
_________________.
Multiple Choice Quiz
1.
Which group is a target for the marketing of goods?
A.
Buyers
B.
Sellers
C.
Government purchasing agents
D.
All of the above
(consumer)
Chapter 1 The Nature of Marketing
2.
Which of the following is a fundamental aspect of marketing?
A.
Something that is received by each party
B.
Something that is given up by each party
C.
Some communication between the parties
D.
All of the above
3.
The marketing mix as an activity involves:
A.
getting and keeping customers.
B.
products and distributors.
C.
promotion and price.
D.
The 4 Ps of marketing.
4.
Not-for-profit organizations:
A.
attract clients for the government.
B.
attract clients on the basis of high price.
C.
attract clients on the basis of service.
D.
attract clients on the basis of inconvenient location.
5.
Which is NOT a form of promotion?
A.
Personal selling
B.
Notoriety
C.
Advertising
D.
Sales promotion
6.
Michelin is most likely to use which marketing mix to element to introduce a new tire:
A.
Higher quality, better performance, safety for the driver (product development)
B.
“The most expensive tire in the world” (promotion)
C.
Shipped directly to Wal-Mart (channel of distribution)
D.
Appearance on the David Letterman Show (publicity)
7.
Which of the following would be considered an uncontrollable variable?
A.
Location near a shopping mall
B.
Government regulation sought by our industry
C.
Adverse weather
D.
Market share
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Chapter 1 The Nature of Marketing
8.
Production-orientation includes all of the following EXCEPT:
A.
any color as long as its black.
B.
pick from our existing product line.
C.
one size fits all.
D.
substitutions are welcome.
9.
Which of the following does NOT support the marketing concept?
A.
Long-run profitability
B.
Warranties and service contracts eliminated
C.
Integrated marketing and corporate functions
D.
Customer satisfaction is our overall purpose
10.
______________________ is the aggregate of marketing activities within an economy.
A.
Microeconomics
B.
Macroorganism
C.
Macroeconomics
D.
Macrocosm
11.
Which of the following is NOT an example of supporting the societal concept?
A.
Using returnable containers for a discount
B.
Supplying biodegradable plastic bags
C.
Using all natural ingredients
D.
Supporting clear cutting in the rain forests
12.
A product’s package is primarily part of which aspect of the marketing mix?
A.
Place (distribution)
B.
Price
C.
Promotion
D.
Product
Chapter 1 The Nature of Marketing
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13.
Which services are NOT usually available while flying on a cross-country flight?
A.
Telephone service
B.
Movies
C.
Fax & receiving voice mail
D.
Food & beverage
14.
A magazine advertisement that reminds you to “Enjoy Coca-Cola” is part of which aspect of
the marketing mix?
A.
Price
B.
Product
C.
Promotion
D.
Place
15.
Major League Baseball’s market-orientation includes all EXCEPT:
A.
changes in food and beverages at parks.
B.
special fan appreciation nights.
C.
allowing fans to choose the starting pitcher.
D.
luxury corporate boxes.
True/False Quiz
_____1.
All that is necessary to be successful in marketing is a superior product.
_____2.
When a Girl Scout sells cookies door-to-door, this is an example of personal selling
within a promotion strategy.
_____3.
Many successful companies have evolved from production- or sales-orientation
organizations to marketing-oriented firms.
_____4.
When Garth Brooks (singer) gives a free concert in Central Park in New York City,
this is an example of publicity.
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_____5.
Chapter 1 The Nature of Marketing
When eBay allows consumers to bid over the Internet what they are willing to pay for
a product, this is an example of a pricing strategy for these products.
_____6.
The economic environment of the U.S. is an example of a controllable variable.
_____7.
An economic transfer of goods or services in exchange, for a price expressed in
monetary terms, is the marketing exchange most frequently analyzed.
_____8.
The election of public officials represents significant marketing efforts in the area of
ideas and services.
_____9.
Inflation is an example of a controllable variable in the marketing mix.
_____10.
A “total product” includes not only the basic good or service, but all the “extras” that
go with it.
_____11.
Organizations that have a “production-orientation” typically do best in a buyer’s
market.
_____12.
The “marketing orientation” of a company is captured in the slogan: Push! Push!
Sell! Sell!
_____13.
The 4 Ps are product, price, property, and promotion.
_____14.
The marketing concept includes a consumer-orientation, an emphasis on long-run
profits, and a cross-functional perspective.
_____15.
The increased emphasis on the societal concept should increase the success of a
market-oriented company which has strong consumer support.
Critical Thinking and Writing Activities
1. Not-for-profit organizations need to do marketing just as much as (and some people would argue
that they need to do it even more than) for-profit organizations. Take an organization such as
The St. Louis Art Museum. What are the important aspects of the marketing mix for this
museum if it is trying to attract more college students as visitors?
Product:
Place:
Promotion:
Chapter 1 The Nature of Marketing
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Price:
2. The process of marketing requires five fundamental aspects in order for marketing to occur.
Describe these five aspects as they would apply to a college student who was attempting to
purchase a CD over the Internet from Amazon.com.
Two or more parties:
Something that is given up by each party:
Something that is received by each party:
Some communication between the parties:
A mechanism that will perform the exchange:
3. Describe what is meant by “relationship marketing” as it apples to the relationship that you have
with your college or university. What is your college or university attempting to do in terms of
its relationship with you in order to establish and to nurture this type of relationship?
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Chapter 1 The Nature of Marketing
CHAPTER ONE QUIZ ANSWERS:
Vocabulary Quiz
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
F
K
LL
CC
G
B
BB
E
DD
FF
D
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18.
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22.
23.
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C
A
HH
M
EE
GG
II
L
KK
I
J
12.
13.
JJ
H
25.
AA
Chapter 1 The Nature of Marketing
Multiple Choice Quiz
1.
2.
3.
4.
5.
D
D
D
C
B
6.
7.
8.
9.
10.
A
C
D
B
C
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D
D
C
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C
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F
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F
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True/False Quiz
1.
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4.
5.
F
T
T
T
T
Chapter 1 Cross Word Puzzle
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Chapter 1 The Nature of Marketing
Page for Marketing Notes
Chapter 1 The Nature of Marketing
Chapter 1 Cross Word Solution
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Chapter 1 The Nature of Marketing