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Chapter 1: Marketing’s Value to Consumers, Firms, and Society

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production
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actually making goods or performing services
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customer satisfaction
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the extent to which a firm fulfills a consumer’s needs, desires, and expectations
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innovation
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the development and spread of new ideas, goods, and services; encouraged by marketing
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marketing
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the performance of activities that seek to accomplish an organization’s objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client
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micro view of marketing
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a set of activities performed by organizations
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marketing should begin with
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potential customer needs
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conditions necessary for marketing
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two or more parties must be willing to exchange something for something else
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pure subsistence economy
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each family unit produces everything it consumes; doesn’t involve marketing
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marketing exchange is often part of an ____________ relationship
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ongoing
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macro-marketing
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a social process that directs an economy’s flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society
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emphasis of macro-marketing
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how the whole marketing system works
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exchange between producers and consumers is hampered by
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spatial separation, separation in time, separation of info and values, separation of ownership, discrepancies of quantity, discrepancies of assortment
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economies of sale
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as a company produces larger numbers of a particular product, the cost of each unit of the product goes down
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universal functions of marketing
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buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market info
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buying function
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looking for and evaluating goods and services
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selling function
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promoting the product; includes personal selling, advertising, customer service, direct/mass selling methods; most visible
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transporting function
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movement of goods from one place to another
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storing function
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holding goods until customers need them
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standardization and grading
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sorting products according to size and quantity; reduces need for inspection and sampling
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financing
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provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products
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risk taking
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bearing the uncertainties that are part of the marketing process
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market information function
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the collection, analysis, and distribution of all the info needed to plan, carry out, and control marketing activities
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intermediary
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someone who specializes in trade rather than production; 2 basic types = retailers and wholesalers
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collaborators
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firms that provide one or more of the marketing functions other than buying or selling
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E-commerce
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exchanges between indivs or organizations — and activities that facilitate those exchanges — based on applications of information technology
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T/F: from a micro viewpoint, every firm must perform all the functions
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F
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economic system
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the way an economy organizes to use scare resources to produce goods and services and distribute them for consumption by various people and groups in the society; must develop some method/institutions to decide what/how much is to be produced and distributed by whom, when to whom, and why
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2 basic kinds of economic systems
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command and market-directed
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command economy
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gov officials decide what and how much is to be produced and distributed by whom, when, to whom, and why; aka “planned”; very limited for producers, prices, assortment
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market-directed economy
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the indiv decisions of the many producers and consumers make the macro-level decisions for the whole economy
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prices in marketplace
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rough measure of how society values particular goods and services; cost of labor and materials also reflects this
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consumers in market-directed economy
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enjoy great freedom of choice, just like producers
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gov in market-directed economy
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supervises the system, sets import/export rules, protects property, ensures contracts and indiv well-being, confirms quality
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5 stages in marketing evolution
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simple trade era, production era, sales era, marketing department era, marketing company era
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simple trade era
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a time when families traded or sold their surplus output to local distributors
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production era
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a time when a company focuses on production of a few specific products — perhaps because few of these products are available in the market; “if we can make it, it will sell”
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sales era
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a time when a company emphasizes selling because of increased competition
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marketing department era
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a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm’s activities
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marketing company era
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a time when, in addition to short-run marketing planning, marketing people develop long-range plans and the whole company effort is guided by the marketing concept
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marketing concept
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the idea that an organization should aim all its efforts at satisfying its customers — at a profit; provides a guiding focus that all departments adopt
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production orientation
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making whatever products are easy to produce and then trying to sell them; lack of a central focus, narrow thinking
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marketing orientation
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trying to carry out the marketing concept
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3 basic ideas of marketing concept
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customer satisfaction, total company effort, profit
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profit
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difference between a firm’s revenue and its total costs; bottom line measure of the firm’s success and ability to survive
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triple bottom line
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measures an organization’s economic, social, and environmental outcomes
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T/F: a manager who adopts the marketing concept sees customer satisfaction as the path to profits
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T
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customer value
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the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits
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low cost and high benefits –>
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perceived superior value
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building relationships w customers requires everyone in a firm work together to provide customer value _______ each purchase
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before and after
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any time the customer value is reduced, the relationship is _____
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weakened
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_____ customers are likely to buy other products offered by the firm
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satisfied
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micro-macro dilemma
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what is good for some producers and consumers may not be good for society as a whole
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social responsibility
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a firm’s obligations to improve its positive effects on society and reduce its negative effects
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Do all marketers act in a socially responsible manner?
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No: some advance their own short-term interests at expense of customers
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Can a manager be truly consumer-oriented and at the same time intentionally unethical?
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No, and sometimes, problems and criticism may arise because a manager didn’t fully consider the ethical implications of a decision
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marketing ethics
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the moral standards that guide marketing decisions and actions
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code of ethics
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state the ethical standards that everyone in the firm should follow in dealing with customers and other people
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marketing is most ____ to the public
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visible