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The Importance of Marketing Chapter 1, Section 1.2 Key Term • Utility Think Critically… • Take 2-3 minutes to brainstorm why prices drop when products become more popular… • We will discuss shortly! Why Marketing is Important… 1. Micro-level: It can ________affect your life 2. Macro-level: It provides the means for __________________to take place in the marketplace, thus helping the economy as a whole Economic Benefits of Marketing • New and _______________Products: • In a competitive marketplace, businesses try to create _________or _______________products at ________________prices than their competition. • Example: Pepsi vs. Coke Economic Benefits of Marketing, cont. • Lower Prices: • Marketing activities ____________demand and this helps to lower prices • When demand is___________, manufacturers can produce products in _________quantities • Unit costs are___________ Economic Benefits of Marketing, cont. • Added _____________and Utility: • _______________________forces companies to be efficient and responsive to consumers • Competition also forces companies to TRY TO ________________________ to a consumer’s shopping experience • Example: U.S. Bank offers online banking, a 24- hour customer service hotline, and free check cards Economic Benefits of Marketing, cont. Utility • Definition: Added ____________in economic terms • Utilities are the _____________of a product or service that make it capable of satisfying a consumers’ wants and needs • Five economic ____________involved with all products • • • • • Form Place Time Possession Information Form Utility •Changing raw materials or putting parts together to make them more__________. (i.e., making or producing things) Example: • _________ • spool of thread • three yards of cloth --------------------------Some Value Example: • creating a jacket from these materials -------------------------MORE Value! Place Utility • Involves having a product _________customers can buy it. • Businesses study consumer shopping ______________to determine the most _____________and efficient _____________________to buy products. • Examples: • ________ • Retail Stores (Brick & Mortar) • Internet (Click & Order) Case Study Example: Blockbuster They have retail stores and now Blockbuster online!! Time Utility • Having a product available at a certain __________of year or a _________time of day Examples: • Gold’s Gym staying open 24 hours • Starbucks offering the pumpkin spice latte from September thru February Possession Utility • The __________of a product for money • There are many variations today: • Cash • Personal checks • _______________ • Layaway and Installment Plans (delayed possession for gradual payment) • Each option adds__________, as it gives the customer greater flexibility (i.e., greater opportunity to BUY) Information Utility • Involves _________with the consumer Examples: • Salespeople provide ________ by offering features and benefits of products • Advertising communicates ________about specials, how much a product___________, and sometimes where to buy it • _________and labeling inform consumers about qualities and uses of a product • Websites provide detailed information about their companies and their products Review Questions… • Which utility is added by drive-through windows at Starbucks? • How does marketing help to lower prices?