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Economic Benefits of Marketing Marketing is important to the economy because it provides a means for competition to take place Based on this concept, what are some benefits that result from competition? Student Contributions: Marketing Essentials Chapter 1, Section 1.2
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LESSON 1.2The importance of Marketing
The Importance of Marketing
Objectives Learn Three benefits of marketing Apply the concept of Utility List and Understand 5 types of Utility
Marketing Essentials Chapter 1, Section 1.2
Economic Benefits of Marketing
Marketing is important to the economy because it provides a means for competition to take place•Based on this concept, what are some benefits that result from competition?
Student Contributions:
Marketing Essentials Chapter 1, Section 1.2
Economic Benefits of Marketing
Three Marketing benefits to the economy and consumers are: New and improved products Lower prices Added value
1. New and Improved Products
To satisfy customer wants and needs at a profit •Marketing generates competition •Competition leads to new and improved productsWhat are some example of recent Products to the Market that are new or improved?
Answers: Iphone 5, XBOX One , PS4, Kindle HD
New and Improved Products What is this ad showing as new/improved? New and innovative paint container Dutch Boy Paints won an award for its
new container design that makes the container easy to hold and open as paint is poured.
Marketing Essentials Chapter 1, Section 1.2
2. Lower Prices Marketing increases demand (desire to purchase). When demand is high what happens? Produce and Sell more units Charge a Lower Price per Unit
More units produced reduces the unit cost per item Fixed costs remain the same = unit cost of each
item is lower Fixed costs (i.e. rent, insurance etc). Marketers Make more money
2. Lower Prices
Examples: What is the cost per unit? Fixed costs =$7,500, produce 300 scarves
Fixed costs =$7,500, produce 1000 scarves
$7500/300 = $25.00
7500/1000 = $7.50
Lower Prices
In addition, when demand for products increase: More companies enter the marketplace Companies must lower prices to remain
competitive
Marketing Essentials Chapter 1, Section 1.2
3. Added Value and Utility
Marketing adds value to products - features that make people desire the product, leading to demand.
The value that marketing adds to a product or service is called utility. •Utility: An attribute of a product or service that makes it capable of satisfying consumers’ wants and needs
What attribute of a product determines if you buy it?
Added Value and Utility
Five utilities of a product /service contribute to satisfying customers’ wants and needs. What attribute of a product determines if you buy it?
1. Form2. Place3. Time4. Possession5. Information
1. Form Utility: Changing raw materials or putting parts together to make them more useful
Take things with little value by themselves to make/have value when together
A zipper, yards of cloth, thread = jacket together Special features added to increase value
Want the item because of new features/extras What are some examples you can think of?
i.e. Smartphone to download apps, take photos, link to Facebook etc.
i.e. electronic controls on a steering wheel
Marketing Essentials Chapter 1, Section 1.2
2. Place Utility: Offering a product where consumers can buy it
What are some places businesses may offer products to consumers?
Direct via catalogs Retail stores Web site Seeing Vending Machines
beginning to be a large venuefor purchasing products
3. Time Utility: Offering a product at a convenient time of day or year for consumers (hours of operation)
Think about time utility, what are some things marketers do to offer products to consumers when they want them?
Student Responses:
Time Utility Answer: Convenient shopping hours
Evenings hours Supermarkets, hairstylists etc. Malls open until 9:00 p.m.
Store hours until 6:00 p.m. to meet working market Open Monday through Sunday Open Monday through Friday – Until noon on Saturday
Extended holiday hours Open 24 hours a day
4. Possession Utility: the exchange of money for a product allowing consumers to take legal ownership of a product
What are some ways you take possession?Student Answers:
Possession Utility
Ways to take Possession include: Cash Checks debit cards credit cards installment/layaway plans credit for business-to business Credit via the internet
5. Information Utility: communicating information about a product with the consumer
What are ways to communicate product information and benefits to a consumer?Student responses:
Information Utility
Ways to communicate product info: salesperson talks/demonstrations store displays through package labeling Advertising – tv, radio,
mail flyers etc. owners’ manual web sites Social media
Economic Benefits of MarketingWhat is the result of each of the three benefits?
Study Organizer:
Marketing Essentials Chapter 1, Section 1.2
List each Utility and an example of each
Lesson 1-1 Review
Complete Real-World Application Worksheet
Marketing Madness:
In a short paragraph, define each of the five utilities and give one real example of each that you have encountered as a consumer. Reflect on how you have personally benefited from marketing.
