Page 553 - Business Principles and Management

Unit 6

as the product moves from producer to customer.
Because performing these activities requires many
people and special equipment, the cost of market-
ing a product is sometimes higher than the cost of
making that product. Therefore, perhaps half or
more of the price you pay for a product may result
from marketing expenses. Although this amount
may appear high, the well-spent marketing dollar
contributes much to the success of products and
businesses as well as to the satisfaction of customers.
Good marketing makes the product or service avail-
able to customers when and where they want it.

PHOTO: © DIGITAL VISION. ROLE OF MARKETING
Marketing’s role changes as environmental condi-
tions change. Marketing has not always been an
important part of business. In the early 1900s,
business conditions were much different than they
are now. Customers had only a few products to
choose from and a limited amount of money to
spend. Usually only a few producers manufactured
Storing is a common
a product, and the manufacturing process was not very efficient. Demand for
marketing activity. What
most products was greater than the supply. As a result, most producers concen-
are some others?
trated on making more kinds of products in greater quantities. Under these con-
ditions, firms were production oriented—that is, decisions about what and how
to produce received the most attention. Businesses did not have to worry a great
deal about marketing.
When production becomes efficient and more businesses offer similar prod-
ucts, competition among businesses increases. Each business has to work harder
to sell its products to customers when customers see they have many choices.
Companies must emphasize distribution to get their products to more customers.
In addition, advertising and selling become important marketing tools as busi-
nesses try to convince customers that their products
are the best. Production may be considered the most
important activity, but it is not enough for a business
to be successful. Under these conditions, businesses
may become sales oriented; that is, they emphasize
widespread distribution and promotion to sell their
products.
Amazon.com pioneered a new form of market- In many product categories today, consumers
ing by developing an online store that goes realize they can choose from a wide range of goods
beyond selling to a whole marketing system. and services. Many businesses are competing with
Point your browser to www.thomsonedu.com/ each other to sell the same product. But companies
school/bpmxtra. Evaluate the Amazon.com site. realize that it is not enough just to produce a vari-
Determine how Amazon.com develops relation- ety of products; they must produce the right prod-
ships with its customers. Compare and contrast
how Amazon.com performs the eight market- ucts. Companies that produce what customers
want and make buying easy for customers will be
ing activities discussed versus traditional stores.
more successful than those that do not.
How likely are you to use an online store such
Today, more and more businesses are focusing
as Amazon.com?
on customer needs. They have become customer
oriented—they direct the activities of the company
www.thomsonedu.com/school/bpmxtra
toward satisfying customers. Keeping the needs of

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