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21
issues and solutions to social problems. For a presidential election, for
example, candidates for presidency develop campaign platforms (their
product) consisting of issues they believe important. They employ pro-
motion (television and print advertisements, mass mailings, publicity,
and personal campaign appearances) to inform voters about their ideas
and philosophies.
Other organizations also use marketing activities to sell their
ideas and services. The Red Cross and Special Olympics use marketing
to raise funds for their projects and to increase public awareness about
the needs of disaster victims and the physically and mentally handi-
capped.
Marketing Creates Utility
The central focus of marketing is to satisfy needs. Utility is the
ability of a product to satisfy human needs and wants. A Chilito at Taco
Bell, a three-day vacation at Disney World, a new home – all satisfy
human needs and wants. Businesses attempt to provide four kinds of
utility: form, place, time, and possession. Three of the four kinds (place
utility, time utility, and possession utility) are created directly by mar-
keting.
Place utility is created by making the product available where
the buyer wishes to buy it. Most Americans do not want to travel to
Germany to purchase a Mercedes, to Japan to buy a Sony television, or
to Mexico to purchase enchiladas for lunch. Thus, marketers create
place utility by making products available at convenient locations.
Time utility is created by making a product available when cus-
tomers wish to purchase it. Because some shoppers have time to shop
for a new automobile only on Saturdays, auto dealers may miss a sale
unless they open for business on Saturdays. Similarly, due to seasonal
changes, more convertibles may be desired in April, May, and June and
more four-wheel-drive automobiles in December, January, and February.
Possession utility is created by transferring ownership of a product
to the buyer. Regardless of whether a product is a good, a service, or an
idea, there is a point when ownership is legally transferred by means of
a sales receipt or other formal transaction from one party to another.
The transfer of product possession guarantees the right of the buyer to
use that product to satisfy a need.
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Form utility is created through the production process rather
than through marketing activities. An Acura automobile on display in
the dealer’s showroom possesses form utility: this product would not be
available unless it had gone through a series of production steps, from
the manufacture of sheet steel to the final assembly of finished parts.
Marketers participate in the creation of form utility by researching what
features – air bags, antilock brakes, stereos, and so on – consumers want
so that the product is manufactured to satisfy their needs.
A key role of marketers is to create place, time, and possession
utility to ensure that human needs and wants are met. To satisfy cus-
tomers’ needs and wants, marketers must carry out certain functions.
Functions of Marketing
Marketing focuses on a complex set of activities that must be per-
formed to accomplish objectives and generate exchanges. These activi-
ties, or functions, of marketing include buying, selling, transporting,
storing, grading, financing, marketing research, and risk taking. They
can be performed by a manufacturer, wholesaler, retailer, or some other
company such as an advertising agency. Each helps accomplish market-
ing objectives.
Buying. Everyone who shops for products (consumers, stores,
businesses, governments) decides whether and what to buy. A marketer
must understand buyers’ needs and desires to determine what products
to make available.
Selling. The exchange process is expedited through selling. Mar-
keters usually view selling as a persuasive activity that is accomplished
through promotion (advertising, personal selling, sales promotion, pub-
licity, and packaging).
Transporting. Transporting is the process of moving products
from the seller to the buyer. Marketers focus on transportation costs and
services.
Storing. Like transporting, storing is part of the physical distribu-
tion of products. Storing includes warehousing goods. Warehouses hold
some products for lengthy periods to create time utility. Consumers
want frozen orange juice year-round, for example, although the produc-
tion season for oranges is only a few months out of the year. This means
issues and solutions to social problems. For a presidential election, for Form utility is created through the production process rather example, candidates for presidency develop campaign platforms (their than through marketing activities. An Acura automobile on display in product) consisting of issues they believe important. They employ pro- the dealer’s showroom possesses form utility: this product would not be motion (television and print advertisements, mass mailings, publicity, available unless it had gone through a series of production steps, from and personal campaign appearances) to inform voters about their ideas the manufacture of sheet steel to the final assembly of finished parts. and philosophies. Marketers participate in the creation of form utility by researching what Other organizations also use marketing activities to sell their features – air bags, antilock brakes, stereos, and so on – consumers want ideas and services. The Red Cross and Special Olympics use marketing so that the product is manufactured to satisfy their needs. to raise funds for their projects and to increase public awareness about A key role of marketers is to create place, time, and possession the needs of disaster victims and the physically and mentally handi- utility to ensure that human needs and wants are met. To satisfy cus- capped. tomers’ needs and wants, marketers must carry out certain functions. Marketing Creates Utility Functions of Marketing The central focus of marketing is to satisfy needs. Utility is the Marketing focuses on a complex set of activities that must be per- ability of a product to satisfy human needs and wants. A Chilito at Taco formed to accomplish objectives and generate exchanges. These activi- Bell, a three-day vacation at Disney World, a new home – all satisfy ties, or functions, of marketing include buying, selling, transporting, human needs and wants. Businesses attempt to provide four kinds of storing, grading, financing, marketing research, and risk taking. They utility: form, place, time, and possession. Three of the four kinds (place can be performed by a manufacturer, wholesaler, retailer, or some other utility, time utility, and possession utility) are created directly by mar- company such as an advertising agency. Each helps accomplish market- keting. ing objectives. Place utility is created by making the product available where Buying. Everyone who shops for products (consumers, stores, the buyer wishes to buy it. Most Americans do not want to travel to businesses, governments) decides whether and what to buy. A marketer Germany to purchase a Mercedes, to Japan to buy a Sony television, or must understand buyers’ needs and desires to determine what products to Mexico to purchase enchiladas for lunch. Thus, marketers create to make available. place utility by making products available at convenient locations. Selling. The exchange process is expedited through selling. Mar- Time utility is created by making a product available when cus- keters usually view selling as a persuasive activity that is accomplished tomers wish to purchase it. Because some shoppers have time to shop through promotion (advertising, personal selling, sales promotion, pub- for a new automobile only on Saturdays, auto dealers may miss a sale licity, and packaging). unless they open for business on Saturdays. Similarly, due to seasonal Transporting. Transporting is the process of moving products changes, more convertibles may be desired in April, May, and June and from the seller to the buyer. Marketers focus on transportation costs and more four-wheel-drive automobiles in December, January, and February. services. Possession utility is created by transferring ownership of a product Storing. Like transporting, storing is part of the physical distribu- to the buyer. Regardless of whether a product is a good, a service, or an tion of products. Storing includes warehousing goods. Warehouses hold idea, there is a point when ownership is legally transferred by means of some products for lengthy periods to create time utility. Consumers a sales receipt or other formal transaction from one party to another. want frozen orange juice year-round, for example, although the produc- The transfer of product possession guarantees the right of the buyer to tion season for oranges is only a few months out of the year. This means use that product to satisfy a need. 21 22
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