3. Marketing

Marketing is one of the areas of management. Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

Implementation of marketing concept begins and ends with marketing information about customers - first to determine what customers need, and later to evaluate how well the firm is meeting those needs.

A market consists of people with their needs, the ability to buy, and the desire and ability to sell. Markets are classified as consumer and industrial markets.

A business firm controls four important elements of marketing which are called a marketing mix.

A firm’s marketing mix is the combination of the product, the price of the product, the means for its distribution, and the promotion of the product to reach a firm's target market.

1. The product ingredient of the marketing mix includes decisions about the product's design, brand name, packaging and the like.

2. The pricing ingredient includes both base prices and discounts of various kinds.

3. The distribution ingredient involves not only transportation and storage but also the selection of intermediaries.

4. The promotion ingredient focuses on providing information to target markets. The major forms of promotion include advertising and publicity.

A marketing strategy is a plan for the best use of an organization's resources to reach its objectives. Developing a marketing strategy involves selecting and analyzing a target market and creating and maintaining a marketing mix that will satisfy that market.

Questions:

1. Define the term marketing.

2. What does implementation of marketing concept begin and end with?

3. What does a market consist of?

4. Define the term a marketing mix.

5. List all the ingredients of the marketing mix.

6. What does a product (pricing, distribution and promotion) ingredient include?

7. What does developing a marketing strategy involve?

4. Market Economy

A market or capitalist system contains six essential features. Main features of the market economy are: private property, freedom of choice and enterprise, self-interest as the dominating motive, competition, reliance on the price system, a very limited role for government.

Private property is a main feature of the market economy. The owners of the property have the right to own, control and dispose of buildings, machinery, and other natural and man-made resources. Private property provides the right to income from the property in the form of rent, interest and profit.

Freedom of enterprise is freedom to buy and hire economic resources, to organize them, and to sell their products in the markets. Freedom of choice is freedom of workers to enter and leave any occupations. Consumers are free to spend their incomes. Producers choose what to produce.

The motive for economic activity is self-interest. Each unit in the economy tries to do what is best: firms try to get maximum profits (or minimum losses). Owners try to obtain the highest possible rewards. Workers work there where they can have highest wages. Consumers spend their incomes on those things which yield the maximum satisfaction.

Competition is another feature of the market economy and the regulatory mechanism of capitalism. It limits the use of economic power in order to prevent to control a market and exploit the other buyers or sellers.

Price mechanism is the next feature of the market economy. The decisions of producers determine the supply of a commodity; the decisions of buyers determine the price. A change in demand and supply causes changes in market prices.

The state plays little or no part in economic activity. The political authority is controlling prices or levying taxation.

Questions:

1. What is property?

2. What kinds of property do you know?

3. Do you have private property?

4. Are all units free within the market economy?

5. What does freedom of enterprise mean?

6. What does freedom of choice mean?

7. What do you think self-interest means?

8. Is competition positive or negative feature of the market economy?

9. What causes a change of the market price?

10. There are six main features of the market economy. Can you name them?