1. The Importance of Marketing Economic Benefits Ch 1.2

2. Marketing's’ Impact Marketing has a huge impact on your life and the lives of other consumers Marketing has a huge impact on your life and the lives of other consumers It is even more dramatic with regards to our economy and our standard of living It is even more dramatic with regards to our economy and our standard of living

3. Competition Marketing provides the means for competition Marketing provides the means for competition In a competitive marketplace, businesses try and create new or improved products at lower prices than their competitors In a competitive marketplace, businesses try and create new or improved products at lower prices than their competitors This forces them to be efficient and responsive to consumers This forces them to be efficient and responsive to consumers They look for ways to add value to a consumer’s shopping experience They look for ways to add value to a consumer’s shopping experience

4. Economic Benefits of Marketing New and Improved products / Marketing generates competition which in turn fosters New and Improved products / Businesses look for new ways to satisfy customers wants and needs New and Improved products / Marketing generates competition which in turn fosters New and Improved products / Businesses look for new ways to satisfy customers wants and needs This creates a larger variety of goods and services This creates a larger variety of goods and services Ex. Personal Computers Ex. Personal Computers

5. Lower Prices Marketing increases demand, and this helps lower prices Marketing increases demand, and this helps lower prices High demand allows manufacturers to produce products in larger quantities High demand allows manufacturers to produce products in larger quantities Reducing the unit cost of each product Reducing the unit cost of each product Fixed costs (rent) remain the same whether the co. produces 10 units or 10,000 units Fixed costs (rent) remain the same whether the co. produces 10 units or 10,000 units Called economies of scale Called economies of scale

6. Lower Prices Also when products become popular, more competitors enter the marketplace Also when products become popular, more competitors enter the marketplace To remain competitive, marketers find ways to lower their prices To remain competitive, marketers find ways to lower their prices Ex. DVD players Ex. DVD players

7. Added Value and Utility Functions of Marketing add value to a product Functions of Marketing add value to a product In economic terms these are called Economic Utilities In economic terms these are called Economic Utilities There are 5 Economic Utilities There are 5 Economic Utilities Form, Place, Time, Possession, and Information Form, Place, Time, Possession, and Information

8. Form Utility Form involves changing raw materials or putting part together to make them more useful Form involves changing raw materials or putting part together to make them more useful Manufacturing of products involves taking things of little value and putting them together create more value Manufacturing of products involves taking things of little value and putting them together create more value Ex. The raw materials in a coat, little value by themselves Ex. The raw materials in a coat, little value by themselves Although form utility is not directly related to marketing, much of what goes into creating new products, such as marketing research and design, makes it an integral part of the marketing process Although form utility is not directly related to marketing, much of what goes into creating new products, such as marketing research and design, makes it an integral part of the marketing process

9. Place Utility Place involves having a product where customer can buy it Place involves having a product where customer can buy it We study shopping habits and decide where the most convenient and efficient place to put products We study shopping habits and decide where the most convenient and efficient place to put products Ex. Check out lane Ex. Check out lane

10. Possession Utility How do you come into possession of the items you want? How do you come into possession of the items you want? You buy them for a price You buy them for a price The exchange of a product for money is possession totality The exchange of a product for money is possession totality Ex. Cash, checks, debit or credit cards, installment or layaway plans (delayed possession in return for gradual payment) Ex. Cash, checks, debit or credit cards, installment or layaway plans (delayed possession in return for gradual payment) Value is added as more options to possess the item are offered Value is added as more options to possess the item are offered

11. Information Utility Communication with the consumer Communication with the consumer Sales people provide this by explaining features and benefits Sales people provide this by explaining features and benefits Packaging and labeling inform consumers about qualities and used of a product Packaging and labeling inform consumers about qualities and used of a product Advertising inform consumers by giving them price and locations where the products can be purchased Advertising inform consumers by giving them price and locations where the products can be purchased Also Websites, and manuals, Also Websites, and manuals,