Our definition of marketing and discussion of marketing activities reveal some of the obvious reasons the study of marketing is relevant in today’s world. In this section we look at how marketing affects us as individuals and at its role in our increasingly global society.
Marketing Costs Consume a Sizable Portion of Buyers’ Dollars
Studying marketing will make you aware that many marketing activities are necessary to provide satisfying goods and services. Obviously, these activities cost money. About one-half of a buyer’s dollar goes for marketing costs. If you spend $16 on a new CD, 50 to 60 percent goes toward marketing expenses, including promotion and distribution, as well as profit margins. The production (pressing) of the CD represents about $1, or 6 percent of its price. A family with a monthly income of $3,000 that allocates $600 to taxes and savings spends about $2,400 for goods and services. Of this amount, $1,200 goes for marketing activities. If marketing expenses consume that much of your dollar, you should know how this money is used.
Marketing Is Used in Nonprofit Organizations
Although the term marketing may bring to mind advertising for Burger King, Volkswagen, and Apple, marketing is also important in organizations working to achieve goals other than ordinary business objectives such as profit. Government agencies at the federal, state, and local levels engage in marketing activities to fulfill their mission and goals. The U.S. Army, for example, uses promotion, including television advertisements and event sponsorships, to communicate the benefits of enlisting to potential recruits. The U.S. Department of Agriculture launched a promotional website with games to help teach kids about eating right according to its revised “Food Pyramid.”29 Universities and colleges engage in marketing activities to recruit new students, as well as to obtain donations from alumni and businesses
In the private sector, nonprofit organizations also employ marketing activities to create, price, distribute, and promote programs that benefit particular segments of society. Habitat for Humanity, for example, must promote its philosophy of low-income housing to the public to raise funds and donations of supplies to build or renovate housing for low-income families who contribute “sweat equity” to the construction of their own homes. Such activities helped charitable organizations raise more than $260 billion a year in philanthropic contributions to assist them in fulfilling their missions.
Marketing Costs Consume a Sizable Portion of Buyers’ Dollars
Studying marketing will make you aware that many marketing activities are necessary to provide satisfying goods and services. Obviously, these activities cost money. About one-half of a buyer’s dollar goes for marketing costs. If you spend $16 on a new CD, 50 to 60 percent goes toward marketing expenses, including promotion and distribution, as well as profit margins. The production (pressing) of the CD represents about $1, or 6 percent of its price. A family with a monthly income of $3,000 that allocates $600 to taxes and savings spends about $2,400 for goods and services. Of this amount, $1,200 goes for marketing activities. If marketing expenses consume that much of your dollar, you should know how this money is used.
Marketing Is Used in Nonprofit Organizations
Although the term marketing may bring to mind advertising for Burger King, Volkswagen, and Apple, marketing is also important in organizations working to achieve goals other than ordinary business objectives such as profit. Government agencies at the federal, state, and local levels engage in marketing activities to fulfill their mission and goals. The U.S. Army, for example, uses promotion, including television advertisements and event sponsorships, to communicate the benefits of enlisting to potential recruits. The U.S. Department of Agriculture launched a promotional website with games to help teach kids about eating right according to its revised “Food Pyramid.”29 Universities and colleges engage in marketing activities to recruit new students, as well as to obtain donations from alumni and businesses
In the private sector, nonprofit organizations also employ marketing activities to create, price, distribute, and promote programs that benefit particular segments of society. Habitat for Humanity, for example, must promote its philosophy of low-income housing to the public to raise funds and donations of supplies to build or renovate housing for low-income families who contribute “sweat equity” to the construction of their own homes. Such activities helped charitable organizations raise more than $260 billion a year in philanthropic contributions to assist them in fulfilling their missions.
Marketing Is Important to Businesses
Businesses must sell products to survive and grow, and marketing activities help to sell their products. Financial resources generated from sales can be used to develop innovative products. New products allow a firm to satisfy customers’ changing needs, which, in turn, enables the firm to generate more profits. Even nonprofit businesses need to “sell” to survive. Marketing activities help to produce the profits that are essential to the survival of individual businesses. Without profits, businesses would find it difficult, if not impossible, to buy more raw materials, hire more employees, attract more capital, and create additional products that, in turn, make more profits. Without profits,
Marketing Fuels Our Global Economy
Profits from marketing products contribute to the development of new products and technologies. Advances in technology, along with falling political and economic barriers and the universal desire for a higher standard of living, have made marketing across national borders commonplace while stimulating global economic growth. As a result of worldwide communications and increased international travel, many U.S. brands have achieved widespread acceptance around the world. At the same time, customers in the United States have greater choices among the products they buybecause foreign brands such as Toyota (Japan), Bayer (Germany), and Nestlé(Switzerland) sell alongside U.S. brands such as General Motors, Tylenol, and Chevron. People around the world watch CNN and MTV on Toshiba and Sony televisions they purchased at Wal-Mart. Electronic commerce via the Internet now enables businesses of all sizes to reach buyers around the world.
Marketing Knowledge Enhances Consumer Awareness
Businesses must sell products to survive and grow, and marketing activities help to sell their products. Financial resources generated from sales can be used to develop innovative products. New products allow a firm to satisfy customers’ changing needs, which, in turn, enables the firm to generate more profits. Even nonprofit businesses need to “sell” to survive. Marketing activities help to produce the profits that are essential to the survival of individual businesses. Without profits, businesses would find it difficult, if not impossible, to buy more raw materials, hire more employees, attract more capital, and create additional products that, in turn, make more profits. Without profits,
Marketing Fuels Our Global Economy
Profits from marketing products contribute to the development of new products and technologies. Advances in technology, along with falling political and economic barriers and the universal desire for a higher standard of living, have made marketing across national borders commonplace while stimulating global economic growth. As a result of worldwide communications and increased international travel, many U.S. brands have achieved widespread acceptance around the world. At the same time, customers in the United States have greater choices among the products they buybecause foreign brands such as Toyota (Japan), Bayer (Germany), and Nestlé(Switzerland) sell alongside U.S. brands such as General Motors, Tylenol, and Chevron. People around the world watch CNN and MTV on Toshiba and Sony televisions they purchased at Wal-Mart. Electronic commerce via the Internet now enables businesses of all sizes to reach buyers around the world.
Marketing Knowledge Enhances Consumer Awareness
Besides contributing to the well-being of our economy, marketing activities help to improve the quality of our lives. Studying marketing allows us to assess a product’s value and flaws more effectively. We can determine which marketing efforts need improvement and how to attain that goal. For example, an unsatisfactory experience with a warranty may make you wish for stricter law enforcement so that sellers would fulfill their promises. You also may wish that you had more accurate information about a product before you purchased it. Understanding marketing enables us to evaluate corrective measures (such as laws, regulations, and industry guidelines) that could stop unfair, damaging, or unethical marketing practices. Thus, understanding how marketing activities work can help you to be a better consumer.
Marketing Connects People Through Technology
New technology, particularly technology related to computers and telecommunications, helps marketers to understand and satisfy more customers than ever beforeThrough toll-free telephone numbers, websites, and e-mail,customers can provide feedback about their experiences with a company’s products. Even water products, such as LaCroix flavored sparkling water, provide toll-free telephone numbers and website addresses where consumers can go for questions or comments. This information can help marketers to refine and improve their products to better satisfy consumer needs. Technology also can facilitate marketing exchanges. Some restaurants, for example, are permitting customers to preorder their food and coffee products by sending text messages to the restaurants via their cell phones.
Marketing Connects People Through Technology
New technology, particularly technology related to computers and telecommunications, helps marketers to understand and satisfy more customers than ever beforeThrough toll-free telephone numbers, websites, and e-mail,customers can provide feedback about their experiences with a company’s products. Even water products, such as LaCroix flavored sparkling water, provide toll-free telephone numbers and website addresses where consumers can go for questions or comments. This information can help marketers to refine and improve their products to better satisfy consumer needs. Technology also can facilitate marketing exchanges. Some restaurants, for example, are permitting customers to preorder their food and coffee products by sending text messages to the restaurants via their cell phones.
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