Basic Marketing

A Global-Managerial Approach
William D. Perreault, Jr.
E. Jerome McCarthy

For use only with Perreault and McCarthy texts.

© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Chapter 1:

Marketing’s Role in the

Global Economy

For use only with Perreault and McCarthy texts.

© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Chapter 1 Objectives
When you finish this chapter, you should
1. Know what marketing is and
why you should learn about it.
2. Understand the difference
between micro-marketing and
macro-marketing.
3. Know why and how macro-
marketing systems develop.
4. Understand why marketing is
crucial to economic
development and our global
economy.
1-2
5. Know why marketing
specialists—including
middlemen and facilitators—
develop.
6. Know the marketing
functions and who performs
them.
7. Understand the important
new terms.
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Marketing Defined

Micro-marketing Macro-marketing
The performance of A social process that
activities that seek to directs an economy’s
accomplish an flow of goods and
organization’s objectives services to effectively
by anticipating customer match supply and
needs and directing the demand and to meet
flow of need-satisfying society’s objectives.
goods and services.

For use only with Perreault and McCarthy texts.

1-3 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Implications of the Definition of Micro-
Marketing

• Applies to profit and nonprofit

organizations.
• NOT just persuading customers to buy.
• Begins with customer needs and focuses on
customer satisfaction.
• Marketing activities --but it is a philosophy
that guides the whole business.
• Seeks to builds a relationship with the
customer.
For use only with Perreault and McCarthy texts.
1-4 © The McGraw-Hill Companies, Inc., 1999
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 Marketing Is Important!

• Marketing impacts all of us in our lives as

consumers
• Gives us choices
• Stimulates innovation and economic growth
• There are many good job opportunities in
marketing
• Regardless of what career path you take, no
firm (or non-profit organization) survives for
long if it can’t satisfy some group of
customers.
For use only with Perreault and McCarthy texts.
1-5 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Utility and Marketing
From Production
Time
Time
Form
Form

Utility
Utility
Value
Value that
that comes
comes Place
Place
from
from satisfying
satisfying
human
human needs
needs

Task
Task
Possession
Possession

Exhibit 1-1 From Marketing

For use only with Perreault and McCarthy texts.
1-6 © The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
 Exchange and Marketing
Pots
In very basic economic
systems, each seller
must meet directly with
each buyer in order to
Hats Baskets exchange something of
value. As needs
increase, the number of
exchanges can soon
become unmanageable
for one person.
Hoes Knives

Ten exchanges required

without central market
Exhibit 1-2A
For use only with Perreault and McCarthy texts.
1-7 © The McGraw-Hill Companies, Inc., 1999
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 Exchange and Marketing

In a centralized market, Pots

a buyer can go to one
location to find many
different products from
Central
many different sellers. Hats market Baskets
By reducing the time both middleman
buyers and sellers must
spend to complete an
exchange, prices can be
lowered. Hoes Knives

Five exchanges required

with central market

Exhibit 1-2B
For use only with Perreault and McCarthy texts.
1-8 © The McGraw-Hill Companies, Inc., 1999
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 Exchange and Marketing

Pots Pots

Central
Hats Baskets Hats market Baskets
middleman

Hoes Knives Hoes Knives

Ten exchanges required Five exchanges required

without central market with central market

Exhibit 1-2
For use only with Perreault and McCarthy texts.
1-9 © The McGraw-Hill Companies, Inc., 1999
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 Marketing in Economic Development
Self-supporting
Self-supporting
Stage 1 agriculture
agriculture

Preindustrial
Preindustrialor
or
Stage 2 commercial
commercial

Stage 3 Primary
Primarymanufacturing
manufacturing

Nondurable
Nondurable
Stage 4 consumer
consumerproducts
products

Capital
Capitalequipment
equipmentand
and
Stage 5 durable
durableconsumer
consumerproducts
products

Exporting
Exporting
Stage 6 manufactured
manufacturedproducts
products
For use only with Perreault and McCarthy texts.
1-10 © The McGraw-Hill Companies, Inc., 1999
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 Marketing Facilitates Production
and Consumption
Production Sector
Specialization and division of labor = heterogeneous supply capabilities

Spatial Separation
Discrepancies of Quantity

Marketing Separation in Time

needed
to overcome
Separation of Information
discrepancies
and
separations Separation in Values
Discrepancies of Assortment
Separation of Ownership

Consumption Sector
Heterogeneous demand for form, task, time, place, and possession utility
Exhibit 1-3
For use only with Perreault and McCarthy texts.
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 Model of Market-Directed
Macro-Marketing System

Many Individual Producers

Middlemen
Facilitators
intermediaries

Perform universal marketing functions

Monitoring by government(s) To overcome discrepancies and

and public interest groups separations

To create utility and direct flow of

need-satisfying goods and services

Many Individual Consumers

Exhibit 1-4
For use only with Perreault and McCarthy texts.
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 Key Terms

Production Micro-Macro Universal Functions

Customer Satis- Dilemma of Marketing
faction Pure Subsistence Buying
Utility Economy Selling
Form Market Transporting
Task Central Markets Storing
Possession Middleman Standardization
Time Intermediary and Grading
Place Tariffs Financing
Micro-Marketing Quotas Risk-Taking
Macro-Marketing Countertrade Market Information
Economic System WTO Facilitators
Planned Economy GATT Innovation
Market-Directed Economies of Marketing Ethics
Economy Scale For use only with Perreault and McCarthy texts.
1-13 © The McGraw-Hill Companies, Inc., 1999
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