Download Chapter 21 – Nature and Scope of Marketing – Short Answer

Chapter 21 – Nature and Scope of Marketing – Short Answer
Name:_______________________
1. Why is not always easy to match production and consumption?
Pg 545
» Individual business people make decisions about what to
produce and individual consumers choose what to buy
AND they may not be the same
» Product must follow consumption – don’t know how
many or how badly consumers want it
2. What is the goal of marketing activities? Pg 545
» Match production and consumption
» To package, develop brand names and price product
efficiently
3. What is marketing? Pg 545
» Process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy individual and
organizational objectives.
» Activities that get product from producers to consumers
» Concept of marketing - keeping the needs of the
consumer uppermost in mind during the design,
production, and distribution of a product
4. What is the difference between retailers and wholesalers?
» Wholesales buys directly from a business/industry and
then re-sells to others – usually retailers, but could be to
consumers (cheaper prices)
» Retailers sell directly to consumers (higher price than
wholesale)
5. Summarize: Cost of marketing section – pg 548
» Marketing and completing the 8 activities is costly
because it requires workers, equipment, and much
money. Cost of products are high b/c marketing costs
have to be covered within the price of the product
» NOT good if profit of product is less than the marketing
costs
» Good/successful marketing = big profits
6. Define: production oriented, sales oriented, and customer
oriented
» production oriented: businesses in which decisions
about what and how to produce receive the most
attention.
» sales oriented: businesses that emphasize widespread
distribution and promotion in order to sell the products
produced.
» customer oriented: businesses that direct the activities
of the company toward satisfying customers.
7. What does “market” mean? Pg 549
Types of buyers a business wishes to attract and where
those buyers are located.
8. Read Whom to Serve on pg 549 and Where to Serve on pg 550.
9. What are the four element of marketing, pg 551
Product
Price
Distribution or Place
Promotion
10. What is the marketing mix? the blend of all decisions
related to the four elements of marketing—product, price,
distribution, and promotion.
11. What are some of the decisions needed regarding product
planning?
» Amount to produce
» Quality preferred
» # of different models
» Brand name to use
» Product guarantees
» Images communicated to customers
» Physical features of product
12. What would be the most important issue when setting the price
of an item?
Does it cover the costs of production, if not, would lose
money to make it and to attempt to sell it.
13. What does the distribution part of marketing mean for the
product?
Product must be in the place where people want it/need it.
Surf boards, fur coats, lobster traps, ferry service
14. What are the major methods of promotion?
Advertising (radio, TV, billboard, planes) and Personal
selling (door to door/demo)
15. Briefly list the four stages of a product life cycle and describe
them.
» introduction stage: the stage of the product life cycle
when a brand-new product enters the market.
» growth stage: the stage of the product life cycle when
several brands of the new product are available.
» maturity stage: the stage of the product life cycle when
the product has many competing brands with very
similar features.
» decline stage: the stage of the product life cycle when a
new product is introduced that is much better or easier to
use, and customers begin to switch from the old product
to the new product.
16. What is the difference between industrial goods and consumer
goods?
» industrial goods: product designed for use by another
business or to incorporate into a product: steel, ore, iron,
wheat, oats, cocoa bean, salt, lumber
» consumer goods: products designed for personal or
home use.
17. List the four categories of consumer goods and briefly
describe the type of good and give an example that is NOT from
the book.
» convenience goods: inexpensive items that consumers
purchase regularly without a great deal of thought.
» shopping goods: products that consumers purchase less
frequently than convenience goods, usually have a
higher price, and require some buying thought.
» specialty goods: products that customers insist upon
having and are willing to search for until they find them.
» unsought goods: products for which customers do not
shop because they do not have a strong need for them
Review Facts
1. Individual business people make decisions about what
they will produce, and individual consumers make decisions
about what they want to purchase.
2. The goal of effective marketing is to create and maintain
satisfying exchange relationships between buyers and sellers.
7. Whom to serve and where to offer its products and
services.
11. Problems such as goods damaged in shipping, lost
orders, and incorrect items shipped will result in dissatisfied
customers as well as a loss of sales and profits for the
company.
13. In the introduction stage, a company just introduces the
product, so there is little or no competition. In the growth
stage, competition increases as many competitors enter the
market. Competition is greatest in the maturity stage. In the
decline stage, customers switch to new products, and
competitors leave the market as it becomes less profitable.
14. The classification depends on who uses the product. If
both consumers and businesses use a product, then it is both
a consumer good and an industrial good.
Discuss Ideas
6. Answers will vary. The choices may be based on factors
such as weather, the geographic features (ocean, mountains),
the social and cultural factors related to a specific location,
and so forth. Examples of products might include
snowmobiles, yachts, ferry services, air conditioners, and
mountain-climbing equipment.
8. Packaging can protect the product from damage, make the
product easier to use, provide useful information to the
customer, and aid in storage of the product.
9. Each element can increase or decrease prices. For
example, adding product variety or features adds to the cost.
More careful product handling or greater customer service
increases the price, as does additional promotion. The
marketing manager must carefully plan each mix element to
meet customer needs as well as possible without increasing
the cost so much that the customer cannot afford the product.