notes_marketingmoney
Name: / Date:Topic: / Marketing Begins with Economics / Class: / Marketing
- Identify the basic economic problem.
- Describe how America’s private enterprise economy works.
Cues/Questions: / Notes:
Marketing Matters
Knowledge of economics and how people make economic decisions improves marketers’ ability to make marketing decisions. Unlimited needs and wants combined with limited resources produce scarcity. Scarcity is the basic economic problem. People always want more than they can buy, so they must make choices. The way those choices are made determines the type of economic system a society has.
The United States has a private enterprise economy, which has many of the characteristics of a free economy. America’s economy is driven by consumers’ independent decisions about what they want to purchase and by producers’ decisions about what they will produce. The government’s role in making economic choices is very limited.
Make a list of your ten most recent purchases. Identify how the availability of product choices and the amount of money you had to spend affected your purchasing decisions.
Key Terms /
- Scarcity
- Controlled economy
- Free economy
- Mixed economy
- Private enterprise
- Profit motive
- Value
- Demand
- Supply
The Importance of Economic Understanding
What is The Basic Economic Problem? / Scarcity
Who Makes the Decisions? / Controlled economy
Free economy
Mixed economy
America’s Private Enterprise Economy / Private enterprise
What are the Characteristics of a private enterprise economy? / Profit motive
Value
Who are consumers? / Demand
Who are Producers? / Suppy
What does the Government do for Consumers and Producers?
What are the Economic Forces?
Summary:
Section 11 of 8
notes_marketingmoney
Name: / Date:Topic: / Marketing Begins with Economics
Observing the Law of Supply and Demand / Class: / Marketing
- Explain microeconomics and the concept of consumer demand.
- Identify factors that affect supply and its relationship to demand.
Cues/Questions: / Notes:
Marketing Matters
Microeconomics analyzes the interaction of consumer demand with producer supply to predict how changes in one affect the other. Much depends on consumers’ needs and wants and on the availability of alternatives. When the independent decisions of consumers and producers are combined, they can be illustrated as curved lines on a two-dimensional graph that intersect at the market price.
Make a list of the last article of clothing you purchased, the last restaurant menu item you bought, and your last transportation-related expense, along with the prices you paid for each. If each had cost 20% more, would you still have bought them? What if they were 50% more? Twice as much as you paid? What determines the point at which you decide not to buy something or to find an alternative?
Key Terms /
- Macroeconomics
- Microeconomics
- Demand curve
- Law of demand
- Economic Market
- Economic resources
- Supply curve
- Law of supply
- Market price
Microeconomics and Consumer Demand / Macroeconomics
Microeconomics
What are the Factors Affecting Demand?
Analyzing Demand Curves
What two variables are illustrated in the Demand Curve?
What does the Demand Curve tell us? / Demand curve
Law of demand
Economic market
Supplying the Product
How do businesses Handle the Competition? / Economic resources
Analyzing a Supply Curve
What two variables are illustrated in the Supply Curve?
What does the Supply Curve tell us? / Supply curve
Law of supply
Describe the Intersection of Supply and Demand. / Market price
Summary:
Section 11 of 8
notes_marketingmoney
Name: / Date:Topic: / Marketing Begins with Economics
Types of Economic Competition / Class: / Marketing
- Define pure competition and monopoly.
- Explain the characteristics of oligopolies and monopolistic competition
Cues/Questions: / Notes:
Marketing Matters
Businesses’ responses to consumer demands are strongly influenced by the competitive structure of the industries they are in and the marketers they serve. The type of competition, or in some extreme cases the lack of competition, determines how much control businesses have over pricing and what strategies they should follow to obtain the greatest long-term profits. Each type of competition produces a unique demand curve. Identifying the type of demand a business faces is important in developing marketing strategies.
Make a list of six businesses, large and small, that operate in your city or town. Now rate the businesses on a point scale of 1 to 10 based on how much market control you think they have over the prices they charge, with a rating of 10 indicating the greatest control.
Key Terms /
- Pure competition
- Monopoly
- Oligopoly
- Monopolistic competitions
All-Out Competition or No Competition at All
What is Pure Competition?
Give an example of pure competition. / Pure competition
What is Monopoly market?
Give an example of a monopoly. / Monopoly
Between the Extremes / Oligopoly
Monopolistic competition
What are Oligopolies?
Give an example of an oligopoly.
What is Monopolistic Competition?
Give an example of monopolistic competition.
Understanding the Competition?
Summary:
Section 11 of 8
notes_marketingmoney
Name: / Date:Topic: / Marketing Begins with Economics
Enhancing Economic Utility / Class: / Marketing
- Define four types of economic utility
- Explain how marketers use utility to increase customer satisfaction.
Cues/Questions: / Notes:
Marketing Matters
Although consumers rarely analyze precisely how they decide to buy products or service, they unconsciously make buying decisions based on the satisfaction they expect to receive from them. Businesses therefore try to increase consumers’ satisfaction by making improvements to products and services.
Economists have developed a concept called economic utility and identified various types of utility to explain why consumers get more or less satisfaction from different products. For businesses, economic utility is important to help them develop better products.
Identify two products in your classroom and propose changes that you believe would increase the satisfaction they provide to users.
Key Terms /
- Economic utility
Utility Means Satisfactions / Economic utility
What is Form Utility?
Give an example of form utility.
What is Time Utility?
Give an example of time utility.
What is Place Utility?
Give an example of place utility.
What is Possession Utility?
Give an example of possession utility.
Utility as a Marketing Tool
Summary:
Section 11 of 8