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Lesson 1.2

The importance of Marketing. Lesson 1.2. 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.

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Lesson 1.2

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  1. The importance of Marketing Lesson 1.2

  2. 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

  3. 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

  4. Economic Benefits of Marketing Three Marketing benefits to the economy and consumers are: New and improved products Lower prices Added value

  5. 1. New and Improved Products To satisfy customer wants and needs at a profit Marketing generates competition Competition leads to new and improved products What are some example of recent Products to the Market that are new or improved? Answers: Iphone 5, XBOX One , PS4, Kindle HD

  6. 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

  7. 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

  8. 2. Lower Prices $7500/300 = $25.00 7500/1000 = $7.50 Examples: What is the cost per unit? Fixed costs =$7,500, produce 300 scarves Fixed costs =$7,500, produce 1000 scarves

  9. 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

  10. 3. Added Value and Utility • 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?

  11. 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? • Form • Place • Time • Possession • Information

  12. 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

  13. 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

  14. 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:

  15. 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

  16. 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:

  17. 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

  18. 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:

  19. 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

  20. Economic Benefits of Marketing • What is the result of each of the three benefits?

  21. List each Utility and an example of each Study Organizer: Marketing Essentials Chapter 1, Section 1.2

  22. 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.

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