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1. The marketing concept centers on the idea that a business organization exists to meet the wants and needs of its customers while meeting its own objectives. The difference between the marketing concept and the selling concept can be described by five characteristics: the focus of the organization, the organization’s business, the product target, the organization’s primary goal, and the tools used to achieve that goal. Businesses that abide by the selling concept are said to be sales-oriented. The focus of a sales-oriented organization is generally inward and they choose to push the product that they make rather than finding out what the market wants. A market-oriented organization, while following the marketing concept, focuses on external factors such as customer value, customer satisfaction, and building relationships. Customer value attempts to strike a balance between the benefits and sacrifices of a product or service. Such a product or service must be of a quality and price that the consumer is willing to pay. Customer satisfaction is the evaluation by a customer on whether or not a product has met their needs and expectations. Of course, any organization wants positive customer satisfaction. Building relationships involves getting new customers, increasing business with current customers, and maintaining long-term customers. A sales-oriented organization, with their internal focus, often overlooks these external factors at the possible cost of poor value, satisfaction, and strained relationships. The biggest difference between the business of a sales-oriented organization and a market-oriented organization is the definition. An organization that is sales-oriented defines its business in terms of goods and services. A market-oriented organization defines its business by the benefits that its customers seek. These distinctions can make a huge difference in the success of the organization. A market-oriented organization can identify the wanted benefits and then find different ways to provide. An organization that is sales-oriented focuses on specific goods and services and often misses out on opportunities with customers. Following the marketing concept keeps the organization’s focus on the customer, encourages creativity, and helps the organization keep up with changes in customers’ wants and needs. The product target also differs between a sales-oriented organization and a marketoriented organization. A market-oriented organization targets specific customers. By identifying different groups of customers, they can provide specific products to meet those customers’ needs. Sales-oriented organizations tend to target an average, expansive customer base. These organizations fail to recognize that very few customers are actually “average.” By ignoring this fact, they may not be making the products that customers want or need. A market-oriented organization’s primary goal is usually to profit by offering great customer value, positive customer satisfaction, and building and maintaining long-term business relationships. The primary goal of a sales-oriented firm is often to make a profit through sales volume, often at the cost of customer value, customer satisfaction, and long-term business relationships. The tools by which these organizations achieve these goals are similar, but differ in their scope. Sales-oriented organizations primarily use intensive personal selling and advertising. Market-oriented organizations also use these promotional activities; however, they recognize that these are but a part of the toolset. The other three components that are used are product decisions, distribution decisions, and pricing decisions. A market-oriented organization also acknowledges that these decisions should be coordinated throughout the business, not just left to the marketing department. The concept that an organization chooses to follow greatly influences its focus, business, product target, primary goal, and toolset. A sales-oriented organization follows the selling concept which focuses on internal factors in order to generate sales volume. A market-oriented organization follows the marketing concept which focuses on external factors to meet the wants and needs of its customers while meeting its own objectives. 2. The growing availability of information in the last 50 years has resulted in the public being more aware of the practices of businesses. There has also been an increasing movement for social awareness and responsibility. Increasing public pressure for social awareness, along with government legislation and regulation, has pushed business to become more ethical than it has been in the past. The traditional view of a business’s responsibility has been to prosper and survive. Businesses had always operated in ways that maximized profits regardless of safety hazards or ethical implications. American businesses used slavery, child labor, hazardous materials; they also formed monopolies and discriminated with prices and services. In fact, the nature of business has not been very ethical; it has always taken some sort of disaster or public knowledge to stop the business in its tracks. After unethical or dangerous practices were exposed, legislation was the next step in preventing any more occurrences. This has always been the nature of progressive business practices. The societal marketing concept holds that businesses must have a concern for the welfare of society. This concept has taken shape through public movement for social awareness as well as through legislation. Businesses ultimately profit by their customers, and if those customers prefer that organizations become socially conscious, those businesses need to adapt in order to survive. Businesses in the tobacco industry would market their product to both adults and kids through the radio and TV, but once the health implications of cigarettes were made public, legislation stepped in to stop the advertising; i.e. the Public Health Smoking Act of 1970. In more recent years, there has been both public and government pressure against the tobacco industry. If this industry cared about having any sort of social responsibility, they would try to find a new market that didn’t harm customers. In order for an organization to have total social responsibility, it must have four components: economic, legal, ethical, and philanthropic responsibility. Economic responsibility refers back to the traditional view that businesses must prosper and survive. Without economic responsibility, a business fails and thus can’t obtain the other three components. Legal responsibility is a business’s obligation to follow legislation. A business’s ethical responsibility is its duty to do what’s right, just, and fair by society’s standards. Philanthropic responsibility is when a business has a private or public initiative for a public good in order to improve the quality of life for society. Businesses operate in a more ethical way than they did 50 or more years ago because of public pressure for social responsibility, legislation, and regulation. Even though business has progressed, there are still modern examples of large organizations operating in unethical and illegal ways in order to maximize profits. A good example of modern businesses operating unethically would be the housing crisis that started in 2008. One of the leading factors in that crisis was the large amount of subprime loans that were in circulation. The reason for these subprime loans was to extend mortgages to more people, even though those people were more likely to default on their loans. For awhile, the financial sector was making a huge profit by letting basically anyone take out a house loan; however, once housing prices fell, the market came crashing down and many people were out of homes and jobs. This led to the government and the public realizing that a lack of regulation in the financial sector resulted in the crisis. So, even today in the more ethically conscious business environment, the same trend for progressive business practices holds true. A business operates in unethical or dangerous ways that leads to public knowledge. A general outcry results in legislation and regulation to prevent the occurrence of those practices in the future. Businesses find other ways to make money and the cycle starts again. 3. (20 points) 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. Marketing is vital to business in order for businesses to understand the needs and wants of the consumer. It allows the business to please current customers and plan future ideas in order to gain new customers. It allows the business to determine prices that are comparable to the competition, and determine distribution and pricing of the produced items. Marketing is especially important in the business world because all aspects of a business must be at least familiar with the marketing ideas being proposed in his/her workplace. Marketing is important for the society in the fact that there are many people in need of products. These products range from food to automobile equipment and much more, and without marketing prices of these items would be outrageous. Companies develop newer and better products at almost a constant rate in order to increase consumer purchases. Without marketing we wouldn’t be able to drive to our nearest supermarket or Wal-mart and get products that are vital to everyday life. Last, marketing in our personal lives because it offers many career opportunities. This type of business can allow a person much growth personally as well as being able to climb the corporate ladder. Not to mention, the more we understand about marketing making educated decisions about products becomes much easier. Not only are we gaining perspective what marketing actually is, we are also learning what to look for in a good product.