1 · web viewchannel of distribution f. price ff. promotion g. uncontrollable variable gg....

C H A P T E R 1

The Nature of Marketing

CHAPTER SUMMARYThe function of marketing is to bring buyers and sellers together, and the primary emphasis of marketing is in the exchange process requiring two or more parties to trade things of value.

Learning Objective 1Define marketing and discuss marketing in its broadened sense.Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that will satisfy individual and organizational objectives. Effective marketing consists of a consumer-oriented mix of business activities planned and implemented by a marketer to facilitate an exchange so that both parties profit in some way. Consumers may exchange money, votes, or something else to obtain the marketer’s offering.

Learning Objective 2Identify the elements of the marketing mix.The marketing mix consists of four major elements: product, place (distribution), promotion, and. price. These are basic to any organization and are adjusted and combined by the marketing manager to achieve the organization’s goals.

Learning Objective 3Understand that marketers must contend with external environmental forces.The marketing environment consists of uncontrollable forces that influence consumer behavior and represent both opportunities for, and constraints, to an organization. The marketing manager’s task is to adjust an organization’s marketing mix to cope with the external environment. This involves anticipating environmental changes that will affect the organization. Correct environmental assessment makes marketing decisions more successful.

Learning Objective 4Explain the marketing concept.

Chapter 1 The Nature of MarketingThe marketing concept is a philosophy of business and a set of objectives enabling organizations to offer superior customer value. According to this concept, marketing-oriented organizations can succeed by focusing on consumers’ wants and needs, long-term profitability, and an integrated marketing effort. Marketing-oriented organizations embrace the idea that they can satisfy customers needs better than their competitors. Product orientation and sales orientation are less effective alternative philosophies.

Learning Objective 5Recognize the contribution of marketing to a country’s economy and way of life.Marketing delivers a standard of living to society. The aggregate of all organizations’ marketing activities, especially their transportation and distribution activities, affects a society’s economic well-being. The efficiency of the system for moving goods from producers to consumers is an important factor determining a country’s quality of life.

Learning Objective 6Define the societal marketing concept.The societal marketing concept, which can be in perfect harmony with the marketing concept, stresses the need for marketers to consider the collective needs of society as well as individual consumer desires and the organization’s need for profits. It recognizes that every consumer, as a member of society, has both long-term and short-term needs.

Learning Objective 7Explain the importance of studying marketing.Marketing offers many possible career opportunities to students (see Appendix A at the end of the book). In addition, marketing knowledge and skills can help you to become a more knowledgeable consumer.

VOCABULARY QUIZ

The purpose of this quiz is to determine how familiar you are with the key concepts in this chapter. From the list of vocabulary, select the one that most accurately describes the definitions of the concept or marketing term. Write the letter in the space provided.

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Chapter 1 The Nature of Marketing

A. Exchange process AA. MarketingB. Societal marketing concept BB. MarketC. Marketing mix CC. Four Ps of marketingD. Superior customer value DD. ProductE. Place (distribution) EE. Channel of distributionF. Price FF. PromotionG. Uncontrollable variable GG. Production orientationH. Sales orientation HH. Marketing conceptI. Cross-functional activity II. Marketing orientationJ. Retailer JJ. MacromarketingK. Relationship marketing KK. WholesalerL. Manufacturer LL. Ultimate consumerM. Transaction

_____1. The amount of money or other consideration--that is, something of value--given in exchange for a product.

_____2. Marketing activities aimed at building long-term relationships with the people (especially customers)and organizations that contribute to the company’s success.

_____3. An individual who buys or uses a product for personal consumption.

_____4. The basic elements of the marketing mix: product, place (distribution), price, and promotion; also called the controllable variables of marketing because they can be controlled and manipulated by the marketer.

_____5. A force or influence external to the organization and beyond its control.

_____6. Organizational philosophy that stresses the importance of considering the collective needs of society, as well as individual consumer’s desires and organizational profits.

_____7. A group of potential customers that may want the product offered and that has the resources, the willingness, and the ability to purchase it.

_____8. The element of the marketing mix that encompasses all aspects of getting products to the consumer in the right location at the right time.

_____9. A good, service, or idea that offers a bundle of tangible and intangible attributes to satisfy consumers.

_____10. The element of the marketing mix that includes all forms of marketing communication.

_____11. The consumer’s attribution of greater worth or better ability to fulfill a need to a

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Chapter 1 The Nature of Marketingcertain product compared to its competitors.

_____12. The aggregate of marketing activities in an economy or the marketing system of a society, rather than the marketing activities in a single firm (micromarketing).

_____13. Organizational philosophy that emphasizes selling existing products, whether or not they meet consumer needs, often through aggressive sales techniques and advertising.

_____14. Product, Place (distribution), Promotion, and Price

_____15. The interchange of something of value between two or more parties.

_____16. Organizational philosophy that stresses consumer orientation, long-range profitability, and the integration of marketing and other organizational functions. The marketing concept, which focuses on satisfying consumers’ wants and needs, is the foundation of a marketing orientation.

_____17. A single exchange agreement; the completion of a one-time sale.

_____18. The sequence of marketing organizations involved in bringing a product from the producer to the consumer.

_____19. Organizational philosophy that emphasizes physical production and technology, rather than sales or marketing.

_____20. Organizational philosophy that emphasizes developing exceptional skill in understanding and satisfying customers so that the organization can offer superior customer value.

_____21. An organization that recognizes a consumer need and produces a product from raw materials, component parts, or labor to satisfy that need.

_____22. An organization that serves as an intermediary between manufacturer and retailer to facilitate the transfer of products or the exchange of title to those products.

_____23. An activity carried out by individuals from various departments within an organization and from out-side the organization, all of whom have a common purpose.

_____24. An organization that sells products it has obtained from a manufacturer or wholesaler to the ultimate consumer. Retailers neither produce nor consume the product.

_____25. The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that will satisfy individual and organizational objectives.

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LEARNING OBJECTIVES QUIZ

Learning Objective 1Define marketing and discuss marketing in its broadened sense.

1. It is best to begin discussing __________ from a business perspective. (marketing)

2. Marketing activities are aimed at bringing _________ and ________ together.(buyers, sellers)

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Chapter 1 The Nature of Marketing3. A major marketing ________ is paying ____________ attention to customers’ ________.

(activity, continuous, needs.)

4. The marketing process begins with _____________ ____________ even before the product is manufactured. (customer analysis)

5. Broadening the marketing concept to include not-_____-________ organizations places the primary emphasis on the ______________ process. (for-profit, exchange)

6. Each party must gain ___________. Each party contributes something of ________ because

each expects to be _________ by the exchange. (something, value, satisfied)

7. Effective marketers view making a sale not as the _______ of the process, but as a start of

the organization’s __________ with a customer. (end, relationship)

8. Marketers want customers for _______________. (life)

9. Effective marketers work to build _______-_________ relationships with their customers.(long-term)

10. A ________________ is a group of ____________ customers for a particular product who

are _____________ and __________ to spend money or exchange other resources to obtain the product. (market, potential, willing, able)

Learning Objective 2Identify the elements of the marketing mix.

11. Product, place, price and promotion are referred to as the ______ _____ of _________.(four Ps of marketing)

12. _______________ may be a tangible good or an intangible idea. (Products)

13. How goods get to the customer involves _________ or ______________activity. (place, distribution)

14. Selecting __________, _______________, and other types of distributors is also a place

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Chapter 1 The Nature of Marketing__________________. (retailers, wholesalers, activity)

15. A ______________ of distribution is the sequence of marketing

organizations involved in bringing a product from ___________ to _______________.(channel, producer, consumer)

16. Marketing specialists, or __________________, are hired because they can more

_____________ or more ______________ perform a certain marketing activity for an organization in a basic marketing channel. (collaborators, efficiently, effectively)

17. ________________ is the means by which marketers “talk to” existing customers and

potential __________. (Promotion, buyers)

18. _______________, personal _________, ___________, and sales promotion are all forms of promotion. (Advertising, selling, publicity)

19. The amount of money given in exchange for something is its ___________. (price)

20. In _________-________-_________ situations, price may be expressed in terms of volunteered time or effort, votes, or donations. (not-for-profit)

21. According to economists, prices are always __________ ____________. (on trial)

22. In selecting a marketing mix, each manager realizes that there is “_____ _______ _____” to mix ingredients. (no best way)

Learning Objective 3Understand that marketers must contend with external environmental forces.

23. All organizations operate within an external ______________. (environment)

24. Managers contend with and cannot govern _____________ forces called ________________

variables which affect both consumers’ behavior and organizations’ developmentof effective marketing mixes. (external, uncontrollable)

25. _______________ and other _____________ forces might lead to a decline in homebuilding.(Inflation, economic)

26. Changes in _____________ ______________ and lifestyles have lead to a change in eating habits. (social values)

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27. To plan marketing mixes compatible with the external __________________, marketing

managers must be able to recognize and _____________ uncontrollable variables.(environment, analyze)

28. Determining the correct _________ to __________ and to exit the market may rest on

an analysis of the ________________ environment. (time, enter, external)

Learning Objective 4Explain the marketing concept.

29. Marketing managers operating with a ____________ orientation focus their efforts on physical production. (production)

30. The philosophy of an organization with a ____________ orientation is to change consumers’ minds to fit the product. (sales)

31. Companies that have superior skills in understanding and satisfying customers

are _____________-oriented, or market- _______________. ( marketing-, -driven)

32. The philosophy known as the ________________ _______________ is central to all effective marketing, thinking, planning and action. (marketing concept)

33. _____________ _______________ is the first aspect of the marketing concept.(Consumer orientation)

34. Organizations that have accepted the marketing concept try to create goods and

services with the ___________needs in mind. (customer’s)

35. Implicit in the marketing concept is the assumption that the organization wishes to continue

to exist. Therefore, _________-_______ profits are accented in this philosophy.(long-term)

36. Marketing personnel cannot be isolated from other company _______________.

Successful organizations view marketing as an ________________ function, not an isolated

business function, hence the term _____________-______________ activity is essential in the study of marketing activities. (activities, integral, cross-functional)

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Learning Objective 5Recognize the contribution of marketing to a country’s economy and way of life.

37. Marketing must be viewed not only in terms of its __________ in the individual

organization but also in terms of the important role it plays in _________________.(role, society)

38. Therefore, marketing should be viewed as the activity that ______________ a standard of

__________ to society. (delivers, living)

39. A society’s well being is dependent on the efficiency of the system for __________ goods

from ____________ to consumers. (moving, producers)

40. To reach a _________ level of well being, a country must improve its _________________.(higher, macromarketing)

Learning Objective 6Define the societal marketing concept.

41. The societal marketing concept can be in perfect ____________ with the marketing concept.(harmony)

42. The marketing concept stresses ___________ consumer needs at a profit.(satisfying)

43. Conflicts exist between customers’ expressed ___________ for immediate fulfillment, and

the ______________ interpretation of what is good for society.(preferences, organization’s)

Learning Objective 7Explain the importance of studying marketing.

44. One reason for studying marketing is that marketing offers many _________ opportunities, including advertising, sales, product management, retail store management, and others. (career)

45. Knowledge of marketing also will help you to become a more knowledgeable

_________________. (consumer)

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Multiple Choice Quiz

1. Which group is a target for the marketing of goods?A. BuyersB. SellersC. Government purchasing agentsD. All of the above

2. Which of the following is a fundamental aspect of marketing?A. Something that is received by each partyB. Something that is given up by each partyC. Some communication between the partiesD. All of the above

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3. The marketing mix as an activity involves:A. getting and keeping customers.B. products and distributors.C. promotion and price.D. The 4 Ps of marketing.

4. Not-for-profit organizations:A. attract clients for the government.B. attract clients on the basis of high price.C. attract clients on the basis of service.D. attract clients on the basis of inconvenient location.

5. Which is NOT a form of promotion?A. Personal sellingB. NotorietyC. AdvertisingD. Sales promotion

6. Michelin is most likely to use which marketing mix to element to introduce a new tire:A. Higher quality, better performance, safety for the driver (product development)B. “The most expensive tire in the world” (promotion)C. Shipped directly to Wal-Mart (channel of distribution)D. Appearance on the David Letterman Show (publicity)

7. Which of the following would be considered an uncontrollable variable?A. Location near a shopping mallB. Government regulation sought by our industryC. Adverse weatherD. Market share

8. Production-orientation includes all of the following EXCEPT:A. any color as long as its black.B. pick from our existing product line.C. one size fits all.D. substitutions are welcome.

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9. Which of the following does NOT support the marketing concept?A. Long-run profitabilityB. Warranties and service contracts eliminatedC. Integrated marketing and corporate functionsD. Customer satisfaction is our overall purpose

10. ______________________ is the aggregate of marketing activities within an economy.A. MicroeconomicsB. MacroorganismC. MacroeconomicsD. Macrocosm

11. Which of the following is NOT an example of supporting the societal concept?A. Using returnable containers for a discountB. Supplying biodegradable plastic bagsC. Using all natural ingredientsD. Supporting clear cutting in the rain forests

12. A product’s package is primarily part of which aspect of the marketing mix?A. Place (distribution)B. PriceC. PromotionD. Product

13. Which services are NOT usually available while flying on a cross-country flight?A. Telephone serviceB. MoviesC. Fax & receiving voice mailD. Food & beverage

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14. A magazine advertisement that reminds you to “Enjoy Coca-Cola” is part of which aspect of the marketing mix?A. PriceB. ProductC. PromotionD. Place

15. Major League Baseball’s market-orientation includes all EXCEPT:A. changes in food and beverages at parks.B. special fan appreciation nights.C. allowing fans to choose the starting pitcher.D. luxury corporate boxes.

True/False Quiz

_____1. All that is necessary to be successful in marketing is a superior product.

_____2. When a Girl Scout sells cookies door-to-door, this is an example of personal selling within a promotion strategy.

_____3. Many successful companies have evolved from production- or sales-orientation organizations to marketing-oriented firms.

_____4. When Garth Brooks (singer) gives a free concert in Central Park in New York City, this is an example of publicity.

_____5. When eBay allows consumers to bid over the Internet what they are willing to pay for a product, this is an example of a pricing strategy for these products.

_____6. The economic environment of the U.S. is an example of a controllable variable.

_____7. An economic transfer of goods or services in exchange, for a price expressed in monetary terms, is the marketing exchange most frequently analyzed.

_____8. The election of public officials represents significant marketing efforts in the area of ideas and services.

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_____9. Inflation is an example of a controllable variable in the marketing mix.

_____10. A “total product” includes not only the basic good or service, but all the “extras” that go with it.

_____11. Organizations that have a “production-orientation” typically do best in a buyer’s market.

_____12. The “marketing orientation” of a company is captured in the slogan: Push! Push! Sell! Sell!

_____13. The 4 Ps are product, price, property, and promotion.

_____14. The marketing concept includes a consumer-orientation, an emphasis on long-run profits, and a cross-functional perspective.

_____15. The increased emphasis on the societal concept should increase the success of a market-oriented company which has strong consumer support.

Critical Thinking and Writing Activities1. Not-for-profit organizations need to do marketing just as much as (and some people would argue

that they need to do it even more than) for-profit organizations. Take an organization such as The St. Louis Art Museum. What are the important aspects of the marketing mix for this museum if it is trying to attract more college students as visitors?

Product:

Place:

Promotion:

Price:

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Chapter 1 The Nature of Marketing2. The process of marketing requires five fundamental aspects in order for marketing to occur.

Describe these five aspects as they would apply to a college student who was attempting to purchase a CD over the Internet from Amazon.com.

Two or more parties:

Something that is given up by each party:

Something that is received by each party:

Some communication between the parties:

A mechanism that will perform the exchange:

3. Describe what is meant by “relationship marketing” as it apples to the relationship that you have with your college or university. What is your college or university attempting to do in terms of its relationship with you in order to establish and to nurture this type of relationship?

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CHAPTER ONE QUIZ ANSWERS:

Vocabulary Quiz1. F 14. C2. K 15. A3. LL 16. HH4. CC 17. M5. G 18. EE6. B 19. GG7. BB 20. II8. E 21. L9. DD 22. KK10. FF 23. I11. D 24. J12. JJ 25. AA13. H

Multiple Choice Quiz1. D 6. A 11. D2. D 7. C 12. D3. D 8. D 13. C4. C 9. B 14. C5. B 10. C 15. C

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True/False Quiz1. F 6. F 11. F2. T 7. T 12. F3. T 8. T 13. F4. T 9. F 14. T5. T 10. T 15. T

Chapter 1 Cross Word Puzzle

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Page for Marketing Notes

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Chapter 1 Cross Word Solution

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Chapter 1 The Nature of Marketing20

1 · web viewchannel of distribution f. price ff. promotion g. uncontrollable variable gg....

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