Download What is Marketing?

Basic Marketing
A Global
Managerial
Approach
William D. Perreault Jr.
E. Jerome McCarthy
For use only with Perreault and McCarthy texts. © 2002 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin
Chapter One
Marketing’s Role in
the Global Economy
For use only with Perreault and McCarthy texts.
© 2002 McGraw-Hill Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
When we finish this lecture you should
1. Know what marketing is and why you should learn
about it.
2. Understand the difference between micro-marketing
and macro-marketing.
3. Know why and how macro-marketing systems
develop.
4. Understand why marketing is crucial to economic
development and our global economy.
5. Know why marketing specialists – including
middlemen and facilitators – develop.
6. Know the marketing functions and who performs
them.
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Marketing—What’s It All About?
More than Selling and Advertising
All Those
More than Selling
and Advertising
Bicycles!
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Things a Firm Should Do in Producing a Bike
Analyze Needs
Predict Wants
Estimate Demand
Predict When
Determine Where
Estimate Price
Decide Promotion
Estimate Competition
Provide Service
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Production vs. Marketing
Marketing
Makes sure right goods &
services are produced
Production
• Making Goods
• Performing Services
Creates Customer Satisfaction
© 2001 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Exhibit 1-1
Types of Utility and How They Are Provided
Provided by production with
guidance of marketing
Provided by marketing
Time
Form
Utility
Value that comes
from satisfying
human needs
Task
Place
Possession
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Interactive Exercise: Utility
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Marketing Is Important to You!
Important to every consumer!
Important to your job!
Affects economic growth!
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Marketing Stimulates New Ideas
+
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Affects Economic Growth
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
What is Marketing?
Micro
Macro
• Set of activities
• Performed by
organizations
• Social process
OR
• Matches supply
with demand
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Micro-Marketing
Profit and
Non/Profit
Key
Characteristics
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Non-profit Organization’s Micro-Marketing
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Micro-Marketing
More than
Persuasion
Profit and
Non/Profit
Begins with
Needs
Key
Characteristics
Focus of
Your Text
Doesn’t Go
It Alone
Builds
Relationships
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Building Customer Relationships
+
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Macro-Marketing
Emphasis on
Whole
WholeSystems
System
Every Economy
Needs It
Key
Characteristics
Fairness
Efficiency
Effectiveness
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
How Decisions Are Made in an Economic System
Planned Economic
System
Market-Directed
System
• Adjusts itself
• Government
planners decide
• Can work well if:
• Simple
economy
• Adverse
Conditions
OR
• Price is value
measure
• Freedom of choice
• Macro-micro
dilemma
• Government’s role
limited
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
All Economies Need Macro-Marketing Systems
Marketing Involves Exchange!
Pure Subsistence
Economy
A Central Market
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Exhibit 1-2
Central Markets Help Exchange
Ten exchanges
Only
five exchanges
required
without
are
required
when a
central market
middleman
(intermediary) in a
central market is
used
Pots
Central
Market
Middleman
Hats
Hoes
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Baskets
Knives
Central Market Intermediaries in Cyberspace
+
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The Role of Marketing in Economic Development
Families
Families
produce
produce
produce
forfor for
their
their
own
own
needs
needs
n needs
NoNo
producers
producers
or or
markets
markets
NoNo
buyers
buyers
Marketing breaks the circle of poverty!
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Nations’ Macro-Marketing Systems Are Connected
More Growth =
More Global Trade
Tariffs and Quotas
Control Flows
WTO
Develops
Rules
International
Countertrade
Increased
Global Trade
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Can Mass Production Satisfy a Society’s
Consumption Needs?
Economies of Scale Lower Cost
Cost
$
Output
Marketing Bridges the Gap!
Producers
Marketing
Functions
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Consumers
Overcoming Spatial Separation
+
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The Universal Functions of Marketing
Buying
Market
Information
Selling
Transporting
Marketing
Functions
Risk Taking
Storing
Financing
Standardization
& Grading
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Who Performs Marketing Functions?
Producers
Wholesalers
Transport
Firms
Other
Specialists
Ad Agencies
ISP's
Product
Testing
Firms
Retailers
Research
Firms
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Consumers
How Well Does Our Macro-Marketing System Work?
Connects
Producers to
Consumers
Needed:
Marketing
Ethics
Stimulates
Growth
Key
Considerations
Has Critics
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Encourages
Innovations
Key Terms
 Production
 Economic System
 Customer Satisfaction
 Planned Economy
 Utility
 Market-directed Economy
 Form Utility
 Micro-macro Dilemma
 Task Utility
 Pure Subsistence Economy
 Time Utility
 Market
 Place Utility
 Central Market
 Possession Utility
 Middleman
 Micro-marketing
 Intermediary
 Macro-marketing
 Tariffs
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Key Terms
 Quotas
 Countertrade
 WTO
 Economies of Scale
 Universal Functions
of Marketing
 Standardization and
Grading
 Financing
 Risk-taking
 Market Information
 Facilitators
 Buying
 Innovation
 Selling
 E-commerce
 Transporting
 Marketing Ethics
 Storing
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin