1.2 The Importance of Marketing

The Importance of
Economic Benefits of Marketing
The study of marketing allows you to realize how important
marketing is and how much it affects your life and the lives of other
Marketing allows competition to take place, staking an important
role in the economy.
New and Improved Products
Marketing generates competition, which in turn fosters new and
improved products to satisfy customers’ wants and needs, also
creating a larger variety of new goods and services.
Example: Personal computers becoming smaller, lighter, more
powerful and less expensive.
Lower Prices
Marketing increases demand, helping to lower prices because
when demand is high, manufacturers can produce products in
large quantities and this in turn reduces the unit cost of the product
and ultimately, the price paid by the consumer.
When products become more popular, more competitors enter the
marketplace and marketers lower their costs to remain competitive.
Example: Introduction of DVD players in 1997.
Added Value and Utility
The functions of marketing add value to a product, this is called
Utility – An attribute of a product or service that makes it capable of
satisfying consumers’ wants and needs.
There are five economic utilities involved with all products:
Form Utility – Changing raw materials or putting parts together to make
them more useful and making products that consumers need or want.
Place Utility – Having a product where customers can buy it.
Time Utility – Having a product available at a certain time of year or a
convenient time of day.
Possession Utility – The exchange of a product for money and the
options given for taking legal ownership of a product.
Information Utility – Communication with the customer, explanation of
features and benefits of products.