1. Agenda
Chapter 1.2 Notes
Mini Activity – Functions of Marketing

2. The Importance of Marketing
Chapter 1, Section 1.2

3. Key Term
Utility

4. Think Critically…
Take 2-3 minutes to brainstorm why prices drop when products become more popular…
We will discuss shortly!

5. Why Marketing is Important…
Micro-level: It can positively affect your life
Macro-level: It provides the means for competition to take place in the marketplace, thus helping the economy as a whole

6. Economic Benefits of Marketing
New and Improved Products:
In a competitive marketplace, businesses try to create new or improved products at lower prices than their competition.
Example: Pepsi vs. Coke
Diet Pepsi Max has about one-third more caffeine than Diet Mountain Dew
Diet Coke Plus is supposed to be “good” for you, supplementing the drink w/ vitamins

7. Economic Benefits of Marketing, cont.
Lower Prices:
Marketing activities increase demand and this helps to lower prices
When demand is high, manufacturers can produce products in larger quantities
Unit costs are reduced

8. Economic Benefits of Marketing, cont.
Added Value and Utility:
Competition forces companies to be efficient and responsive to consumers
Competition also forces companies to TRY TO ADD VALUE to a consumer’s shopping experience
Example: U.S. Bank offers online banking, a 24- hour customer service hotline, and free check cards

9. Economic Benefits of Marketing, cont.
Utility
Definition: Added value in economic terms
Utilities are the attributes of a product or service that make it capable of satisfying a consumers’ wants and needs
Five economic utilities involved with all products
Form
Place
Time
Possession
Information

10. Form Utility
Changing raw materials or putting parts together to make them more useful. (i.e., making or producing things)
Example:
zipper
spool of thread
three yards of cloth
Some Value
Example:
creating a jacket from these materials
MORE Value!

11. Place Utility Involves having a product where customers can buy it.
Businesses study consumer shopping habits to determine the most convenient and efficient locations to buy products.
Examples:
Catalogs
Retail Stores (Brick & Mortar)
Internet (Click & Order)
Case Study Example: Macy’s
They have retail stores, catalogs, and a pretty awesome website!!

12. Mini-Project
Visit my website and refresh what you need for your “Marketing Functions – Mini-Project”
This is due next class – Tuesday, Aug. 28th

13. Agenda Review Finish Chapter 1.2 Notes Utility Activity
Professional Development (if time)
**Note: Quiz on Thursday!! Remember, it’s Open Note!!
**1st Test: Tuesday, Sept. 3rd

14. Review What are three economic benefits of utility?
New and improved products
Lower prices
Think iPhone
Added value
Paying bills online at U.S. Bank

15. What is utility?
Added value in economic terms

16. What is form utility?
Changing raw materials or putting parts together to make them more useful. (i.e., making or producing things)
Example: Baskin Robbins turning milk, sugar, cream, and some flavoring into ice cream

17. What is place utility?
Involves having a product where customers can buy it.
Businesses study consumer behavior in order to create the most convenient and efficient shopping experience possible.

18. Three (3) slides Review Activity
Now on to the NEW stuff!...
Three (3) slides
Review
Activity

19. Time Utility
Having a product available at a certain time of year or a convenient time of day
Examples:
Gold’s Gym staying open 24 hours
Starbucks offering the pumpkin spice latte from September thru February

20. Possession Utility The exchange of a product for money
There are many variations today:
Cash
Personal checks
Credit and Debit cards
Layaway and Installment Plans (delayed possession for gradual payment)
Each option adds value, as it gives the customer greater flexibility (i.e., greater opportunity to BUY)

21. Information Utility Involves communication with the consumer Examples:
Salespeople provide information by offering features and benefits of products
Advertising communicates messages about specials, how much a product costs, and sometimes where to buy the product
Packaging and labeling inform consumers about qualities and uses of a product
Websites provide detailed information about their companies and their products

22. Review Questions…
Which utility is added by drive-through windows at Starbucks?
How does marketing help to lower prices?

23. Activity: - Here’s where the rubber meets the road…
Activity: - Here’s where the rubber meets the road… 1) You are responsible for creating a PPT that shows how businesses utilize each utility in “real life” A) Example: Baskin Robbins turning milk, sugar, cream, and some flavoring into ice cream B) Print it out on 5 slides per page and three-hole punch to put it in your binder!!