4.1 The role of marketing

Question 1

1. Distinguish between consumer needs and wants.

Answer 1

Needs: the essential necessities that humans must have to survive.
Wants: things that are not essential to living but people would like to have.

Question 2

2. What does marketing mean?

Answer 2

Marketing is the process of predicting, identifying, and satisfying the needs and wants of customers in a profitable manner.

Question 3

3. How does marketing relate to the other functions of a business: finance, human resources and operations management?

Answer 3

Finance: set appropriate marketing budgets
Human resources: identify staffing needs
Operations management: using sale forecasts to prepare their production schedules

Question 4

4. What are the various roles of marketing?

Answer 4

Decision-making
Identifying the needs and wants of customers (market research and data analysis)
Anticipating or predicting what customers might want in the future
Earning profit

Question 5

5. How does the marketing of goods differ from the marketing of services?

Answer 5

Intangibility 
Inseparability 
Heterogeneity 
Perishability 
Product strategy 
Price strategy 
Promotional strategy 
Place strategy

Question 6

6. What are the differences between market orientation and product orientation?

Answer 6

Market orientation: a marketing approach that is outward looking; the business makes what it can sell, rather than sell what it can make.
Product orientation: a marketing approach that is inward looking; the business sells what it can make, rather than make what it can sell.

Question 7

7. What are the differences between commercial marketing and social marketing?

Answer 7

Commercial marketing:
Sell physical goods and services for a profit
Satisfy individual needs and wants to make a profit
Private sector businesses

Social marketing
Influence or persuade a desired change in social behaviour or attitudes
Satisfies the needs and wants of the general public to benefit the community
Government and NGOs

Question 8

8. How do consumer markets differ from industrial (producer) markets?

Answer 8

Consumer markets cater for private individuals.

Industrial (producer) markets cater for organisations.

Question 9

9. What might the characteristics of a market include?

Answer 9

Market size 
Customer base
Barriers to entry 
Competition 
Geographic characteristics
Demographic characteristics 
Market growth rate
Seasonal and cyclical characteristics

Question 10

10. What is market share and how is it calculated?

Answer 10

an organisation’s portion of the total value of sale revenue within a specific industry.
Market share = Firm’s sales revenue/Industry’s sales revenue x 100

Question 11

11. What is market leadership?

Answer 11

Market leadership refers to the firm with the largest market share in an industry.

Question 12

12. Outline the marketing objectives of for-profit organizations and non-profit organizations.

Answer 12

For-profit:
Increased sales revenue
Higher market share
Increased market leadership
Improved brand and product awareness
Developing new products
Enhanced brand perception

Non-profit:

Build membership (support) and connect with donors
Improve brand recognition
Generate awareness of the cause
Create positive attention to operations
Demonstrate the value to local community or society

Question 13

13. Why and how do marketing strategies evolve in response to changes in customer preferences?

Answer 13

Changing customer tastes
Shorter product life cycles 
Internet and mobile technologies
Competitive rivalry
Globalisation