Multimedia Marketing/Marketing.iso/market/chapter1.2p

Text File | 1996-08-21 | 15KB | 329 lines

SECTION 1.2  Macromarketing

INSTRUCTIONS Think of how marketing affects the general public.Then
             look into this section to further develop your thoughts.

EXAMPLE
A large aircraft producer dominates the economy of a large United
States city. To a large extent the city and its residents are
dependent upon the marketing activities of this firm. The company
takes orders from a large number of subcontractors, so many small
and medium sized companies depend on the aircraft producer for their
profits. Competition is very severe in this industry, so the marketing
personnel must be very astute in staying abreast of the major rivals.

If this firm's marketing activities fail and competitors get the
big orders, unemployment surges and city revenues plunge. Not
surprisingly, most of the citizens of the city follow the marketing
efforts of the producer very closely.

DETAILS
Basically, macro marketing refers to the processes where marketers
accomplish or do not accomplish the objectives of society at large.
The goal is to develop and use a marketing system that works
well in satisfying the needs, both material and non-material, of
the population.

In some societies, the macro marketing system does
not work well. Goods are scarce and the few that are available are
of low quality. Food is wasted in obsolete warehouses and inefficient
transportation systems deliver goods to the wrong places. Many
products are produced but never purchased, because consumers do not
like them. Advertisements do not accurately inform consumers about
products. While some of these problems probably exist, at least to
a minor degree in all societies, an effective macro marketing system
can minimize their existence.

From a macro vantage point, marketing adopts the perspective of the
economy at large. It includes all business activities that link
production of goods and services to satisfying needs and wants of
buyers. It also includes the organizations, as they evolve over time
and perform these activities. The process of specialization and
exchange are at the root of marketing.

Marketing has developed because of specialization and exchange.
Specialization and its resulting efficiency can benefit everyone.
For example, large companies manufacture pens in quantity and sell
each at a nominal price. This is much more efficient than if we all
were to try to produce our own pens. We all reap the advantages of
specialization, provided that exchange takes place.

The difficulty is that exchange does not automatically follow
specialization. Because of specialization, consumption and production
are separated. A large manufacturer, for instance, makes transparent
tape in Minnesota, but relies on a host of organizations and users
around the globe to distribute and consume the product. The greater
the specialization the greater is the gap between specialization
and exchange. In turn, exchange will not occur unless the gaps are
successfully bridged.

PROBLEM 1

In modern economies such as the U.S. there is a potential gap in the
macro marketing system because:

A. Specialization may not develop to support exchange.
B. Exchange may not develop to support specialization.
C. Specialization may not develop to support marketing.
D. Exchange may not develop to support pricing.

WORKED

In modern economies such as the U.S. there is a potential gap in the
macro marketing system because exchange may not develop to support
specialization. The economy needs specialization because the costs
of production are much smaller than they would be in a subsistence
economy. But individuals and companies cannot specialize unless
exchange exists, so they can acquire needed goods and services that
are produced by other individuals and companies. Otherwise, those who
produced computers would have nothing but computers at their
disposal--they would lack food, shelter, and other needs that
other companies create.

ANSWER  B

INSTRUCTIONS Think of how marketing affects the general public.Then
             look into this section to further develop your thoughts.

EXAMPLE
A large aircraft producer dominates the economy of a large United
States city. To a large extent the city and its residents are
dependent upon the marketing activities of this firm. The company
takes orders from a large number of subcontractors, so many small
and medium sized companies depend on the aircraft producer for their
profits. Competition is very severe in this industry, so the marketing
personnel must be very astute in staying abreast of the major rivals.

If this firm's marketing activities fail and competitors get the
big orders, unemployment surges and city revenues plunge. Not
surprisingly, most of the citizens of the city follow the marketing
efforts of the producer very closely.

DETAILS
The gaps between producers and consumers have several dimensions, each
of which is related to one of the five components of a product's
total value or "utility" to potential buyers; form, awareness,
place, time, and possession.

Form utility means the physical properties that result from
production. Automobiles that have the desired design and performance
to meet the demands of buyers are likely to sell well.

Awareness utility refers to the degree to which customers learn about
the existence and nature of a product and how it might satisfy
their wants. Auto buyers must become aware of new models before
they will buy them.

Place utility relates to product availability at locations where
customers expect to find them for sale. Automobiles are distributed
around the world and located in various dealerships to result in sales.

Time utility means that product must be stocked at the right times
and places, that customers must be made aware of their presence
when they are available, and the products must be displayed adequately
for sales to result.

Possession utility results from activities designed to facilitate
purchase, such as providing credit and accepting charges, implementing
return policies, providing instructions for use and installation,
and making arrangements to transfer title. A strong warranty, for
instance, increases the value of an automobile.

In order that marketing managers can develop the exchange process
to its fullest potential, they must design a "total product"--the
mix of all utility dimensions--to satisfy customer needs. Production
plays an important role in this process by converting resources into
forms wanted by users, but there are other equally important functions
required to bridge gaps between producers and customers.

PROBLEM 2

An oil field supplies company sponsors advertisements in oil
industry trade publications. These are capable for producing:
A. Form utility.
B. Awareness utility.
C. Place utility.
D. Time utility.

WORKED

An oil field supplies company sponsors advertisements in oil
industry trade publications. These are capable of producing awareness
utility. They will indicate to petroleum explorers and producers what
products--such as drill bits--are available. They also will describe
the supplies and their performance and provide information helping
potential buyers to determine if the supplies will satisfy their
needs. Without awareness utility, the supplies are of no value to
these potential buyers. As far as they are concerned, the supplies
do not exist.
ANSWER B

INSTRUCTIONS Think of how marketing affects the general public.Then
             look into this section to further develop your thoughts.

EXAMPLE
A large aircraft producer dominates the economy of a large United
States city. To a large extent the city and its residents are
dependent upon the marketing activities of this firm. The company
takes orders from a large number of subcontractors, so many small
and medium sized companies depend on the aircraft producer for their
profits. Competition is very severe in this industry, so the marketing
personnel must be very astute in staying abreast of the major rivals.

If this firm's marketing activities fail and competitors get the
big orders, unemployment surges and city revenues plunge. Not
surprisingly, most of the citizens of the city follow the marketing
efforts of the producer very closely.

DETAILS
A system is a set of interdependent components, where a change
in any one of them affects the status of the others as well as the
entire set. A marketing system's components are of two types: the
functions to be performed and the various participants that emerge
over time to perform them.

There are three broad categories of marketing functions needed
to develop exchange. These are merchandising, distribution, and
facilitative.

Merchandising means bringing together (assembling) collections of
goods and services. For example, an income tax preparation firm
buys forms and equipment, rents office space, hires people, and
does other things to be able to offer tax services. The merchandising
functions are buying, standardizing and grading, pricing, and promoting.

Buying--the process of purchasing goods and services--is vital for
all businesses. Some of the most successful merchants and producers
owe much of their success to acquiring high quality products and
services at reasonable prices.

Standardizing and grading means categorizing items such as shoes,
canned foods, and meat. Branding products (naming them) also relates
to this function as it serves to identify product offerings.

Pricing consists of setting prices high enough to cover costs and
earn a profit yet low enough to attract buyers.

Promoting means communicating with potential buyers about an item's
existence and uses. Automobile advertisements, for instance, inform
consumers about the performance of various models.

Physical distribution is a second important function. It consists
of transporting, storing, and materials handling.

Transporting means moving items from one place to another, as by
truck or rail.

Storing means collecting a quantity of items at various places,
such as a collection of cars in a dealership lot.

Material handling means transferring items from transportation to
storage facilities and vice versa.

A third important element is the facilitative function. This
includes financing, risk bearing, and obtaining information.

Financing means arranging for purchases, as through consumer
or trade credit.

Risk bearing refers to taking risks due to errors in judging needs,
theft, obsolescence, and other threats.

Obtaining information refers to learning about user needs (often
referred to as "marketing research").

PROBLEM 3

In the United States economy merchandising is an important function.
It involves:

A. Determing ways of handling and preventing risk.
B. Devising means of making consumers aware of products.
C. Bringing together collections of goods and services.
D. Getting good and services to places where consumers need them.

WORKED

In the United States economy merchandising is an important function.
It involves bringing together collections of goods and services.
It includes buying, categorizing items and identifying them for
consumers, setting prices, and communicating with buyers about product
existence and uses. This is the function where the firm assembles the
resources necessary to reach its goals and objectives. These resources
will be used to produce goods and services for customers.

ANSWER  C

INSTRUCTIONS Think of how marketing affects the general public.Then
             look into this section to further develop your thoughts.

EXAMPLE
A large aircraft producer dominates the economy of a large United
States city. To a large extent the city and its residents are
dependent upon the marketing activities of this firm. The company
takes orders from a large number of subcontractors, so many small
and medium sized companies depend on the aircraft producer for their
profits. Competition is very severe in this industry, so the marketing
personnel must be very astute in staying abreast of the major rivals.

If this firm's marketing activities fail and competitors get the
big orders, unemployment surges and city revenues plunge. Not
surprisingly, most of the citizens of the city follow the marketing
efforts of the producer very closely.

DETAILS
The second arm of the marketing system consists of the entities
that perform the functions: buyers, producers, and intermediaries.

Buyers are made up of consumers, government units, and industrial
and other product buyers. Consumers are the people who buy items
for personal use. They are purchased because consumers can use the
goods to satisfy their individual and family wants, not business
needs. Also consumers around the world are comprising increasingly
attractive markets.

Government units are federal, state, and local bodies who make
purchases from Air Force bombers to green beans.

Industrial and other product buyers collectively buy every conceivable
item so that they can perform the organization's task. Included are
profit seeking companies and not-for-profits such as charities.

Producers are those who manufacture goods and services. They play
a dual role of buying and resource conversion.

Intermediaries are specialists who perform marketing activities for
several producers. They include selling intermediaries such as
wholesalers and retailers, that buy goods and services and later
resell them for a profit. They also include facilitative intermediaries,
who do not sell, such as advertising agencies, marketing research
companies, and transportation carriers.

PROBLEM 4

The marketing system participants include consumers, who:

A. Buy goods and then resell them for profit.
B. Produce goods and services.
C. Perform marketing activities for several producers.
D. Buy goods for personal use.

WORKED

The marketing system participants include consumers who buy goods
for personal use. They do not make purchases for resale or to use
in the production of other goods and services. Rather, they buy
to satisfy individual wants, in areas such as food, housing, and
clothing. If a consumer buys a fax for use in sending messages to
friends, the role is that of a consumer. If the individual uses
the machine for a home business, it is not a consumer good. Some
items are used both for production and consumer use, as when an
individual buys a computer to use for writing business reports and
also to write personal letters.

ANSWER  D