Chapter 1

Question 1

4 fundamental assumptions of free market economics

Answer 1

self interest- people and orgs at in their own self interest

complete information- buyers and sellers have access to all info and what products are available, what quality, prices and leads to grater competition

many buyers and sellers- if one seller does not meet consumer needs someone else will, having wide range of buyers ensures that sellers can find customers who are interested in unique products that are able to produce at a fair price. (why we have anti trust laws)

absence of externalities (social costs)- sale and consumption of product may benefit or harm other ppl not involved in transaction

Question 2

externalities

Answer 2

benefit or harm caused by sale or consumption of products to people not involved in the transaction

Question 3

pre industrial age

Answer 3

beggining of recorded history to start of 19th cent.

chinese invented paper

paper mill in europe

printing press gutenberg

Question 4

albert lasker

Answer 4

father of modern advertising

1920s

“salesmanship in print”

full color printing in magazines

Question 5

advertising strategy

Answer 5

what advertiser wants to achieve with respect to
consumer awareness
attitude
preference

describes how to get there

two substrategies: creative and media

Question 6

industrializing age

Answer 6

until end of World War 1

production oriented

marketing fell on wholesalers

Question 7

industrial age

Answer 7

first 70 yrs of 20th cent.

development of new inexpensive brands luxury and convenience

Question 8

consumer packaged goods

Answer 8

fresh markets developed for new brands of consumer luxury and convenience goods

Question 9

post industrial age

Answer 9

1980

people became aware of the sensitivity of the environment in which we live

Question 10

demarketing

Answer 10

coined during energy shortage in 70s and 80s when advertising was used to slow demand of products