ECONOMICS OF MARKETING Section 1.2

Economic Basics We make financial decisions every day, and depending on those decisions, it can impact businesses greatly Economics- the study of the choices and decisions that affect making, distributing, and using goods and services.

Gross Domestic Product Humans always are measuring and comparting with one another, agree? Countries do the same to see how they stack up against each other and where they are doing good and bad GDP- (Gross domestic product) the value of all goods and services produced within the country

GDP Is GDP growth a good or bad thing…why? What is calculated into the GDP?  Gov’t spending  Consumer spending  Business spending  Exports minus imports

GDP

Profit What’s the meaning of life, maan?

Profit Profit- the money left after all costs and expenses of a business are paid. Are businesses the only ones that care about making a profit?

Competition One of the most important things of all time (in Mr. Hakim’s opinion) Why? Competition- the struggle among companies for customers. Not only in business – think history of the world. What has competition caused mankind to do?

Price Competition Price competition is one of the most basic and easy ideas of business to grasp; yet is one of the most important to a business’s success:  Demand elasticity  Available substitutes When there are many substitutes for a product, demand for the product is elastic = a change in price will make us search for alternatives to that product. Ex - Colgate toothbrushes increase price by $3 each

Price Competition Name some more products that have an elastic demand Name some products that do not have an elastic demand Would North Koreans have the same answers you did?

Price Competition All based on the basic economic principle of supply and demand: If a business lowers their price, demand goes If a business raises their price, demand goes

Price Competition Now think supply: When Supply is and Demand is businesses can charge prices. Example – Phillies ticket prices When Supply is and Demand is business must charge prices. Example – Revs ticket prices

Non-Price Competition Not all organizations use price to compete What are some other areas businesses focus on to gain customers?  Quality  Service  Image  Relationships with customers

Property Ownership and Intellectual Property Rights Copyright- legal protection of a creator’s intellectual property or products Discuss article Robin Thicke/Pharrell - $7.4 million!$7.4 million!  Robin Thicke - Blurred Lines Robin Thicke - Blurred Lines  Marvin Gaye – Got to give it up Marvin Gaye – Got to give it up Ice Ice Baby! Find an interesting copyright case and share with the class

Patents Patents are granted for 20 years to protect owners of patented products. The patented product can’t be used without the owner’s consent Nike Driver patent no. 6,280,348 1,400 golf club patents! 1,000 golf ball patents! Titleist has >100 golf-related patents!

Patents Is it easy and inexpensive to file for a patent? Go to the website, try and figure out an estimate….is it easy? Patent attorneys!

Trademarks Trademarks- Words, names, symbols, sounds or colors that distinguish goods and services Trademarked sounds Trademarked colors What’s the difference between ©, ®, and TM?  Read article on my wikispace

Types of Business Ownership Sole proprietorship- Partnership- Corporation- Subchapter S corporation- Business run by one person Two or more owners has the ability to conduct business and enter into contracts apart from its owner(s) Follows same rules as a corp. but taxed like a partnership

Economic Impact The economic impact of sports and entertainment on an area are huge!