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Chapter 1: Marketing’s Role in the Global Economy

Chapter 1: Marketing’s Role in the Global Economy. Chapter 1 Objectives . When you finish this chapter, you should. 1. Know what marketing is and why you should learn about it. 2. Understand the difference between micro-marketing and macro-marketing.

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Chapter 1: Marketing’s Role in the Global Economy

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  1. Chapter 1: Marketing’s Role in the Global Economy

  2. Chapter 1 Objectives When you finish this chapter, 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. 7. Understand the important new terms. 1-2

  3. Micro-marketing Macro-marketing The performance of activities that seek to accomplish an organization’s objectives by anticipating customer needs and directing the flow of need-satisfying goods and services. A social process that directs an economy’s flow of goods and services to effectively match supply and demand and to meet society’s objectives. Marketing Defined 1-3

  4. Implications of the Definition of Micro-Marketing Applies to profit and nonprofit organizations. NOT just persuading customers to buy. Begins with customer needs and focuses on customer satisfaction. Marketing activities --but it is a philosophy that guides the whole business. Seeks to builds a relationship with the customer. 1-4

  5. Marketing Is Important! • Marketing impacts all of us in our lives as consumers • Gives us choices • Stimulates innovation and economic growth • There are many good job opportunities in marketing • Regardless of what career path you take, no firm (or non-profit organization) survives for long if it can’t satisfy some group of customers. 1-5

  6. From Production Time Form Utility Value that comes from satisfying human needs Place Task Possession From Marketing Utility and Marketing Exhibit 1-1 1-6

  7. Pots Hats Baskets Hoes Knives Ten exchanges required without central market Exchange and Marketing In very basic economic systems, each seller must meet directly with each buyer in order to exchange something of value. As needs increase, the number of exchanges can soon become unmanageable for one person. Exhibit 1-2A 1-7

  8. Pots Central market middleman Hats Baskets Knives Hoes Exchange and Marketing In a centralized market, a buyer can go to one location to find many different products from many different sellers. By reducing the time both buyers and sellers must spend to complete an exchange, prices can be lowered. Five exchanges required with central market Exhibit 1-2B 1-8

  9. Pots Pots Central market middleman Hats Baskets Hats Baskets Knives Hoes Hoes Knives Ten exchanges required without central market Five exchanges required with central market Exchange and Marketing Exhibit 1-2 1-9

  10. Self-supporting agriculture Preindustrial or commercial Stage 1 Primary manufacturing Stage 2 Nondurable consumer products Stage 3 Capital equipment and durable consumer products Stage 4 Exporting manufactured products Stage 5 Stage 6 Marketing in Economic Development 1-10

  11. Production Sector Specialization and division of labor = heterogeneous supply capabilities Spatial Separation Discrepancies of Quantity Marketing needed to overcome discrepancies and separations Separation in Time Separation of Information Separation in Values Discrepancies of Assortment Separation of Ownership Consumption Sector Heterogeneous demand for form, task, time, place, and possession utility Marketing Facilitates Production and Consumption Exhibit 1-3 1-11

  12. Model of Market-DirectedMacro-Marketing System Many Individual Producers Middlemen intermediaries Facilitators Perform universal marketing functions Monitoring by government(s) and public interest groups To overcome discrepancies and separations To create utility and direct flow of need-satisfying goods and services Many Individual Consumers Exhibit 1-4 1-12

  13. Key Terms Production Customer Satis- faction Utility Form Task Possession Time Place Micro-Marketing Macro-Marketing Economic System Planned Economy Market-Directed Economy Micro-Macro Dilemma Pure Subsistence Economy Market Central Markets Middleman Intermediary Tariffs Quotas Countertrade WTO GATT Economies of Scale Universal Functions of Marketing Buying Selling Transporting Storing Standardization and Grading Financing Risk-Taking Market Information Facilitators Innovation Marketing Ethics 1-13

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