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Customer satisfaction

The extent to which a firm fulfills a consumer’s needs, desires, and expectations.

Production

Actually making goods or performing services.

Innovation

The development and spread of new ideas, goods, and services.

Marketing

The performance of activities that seek to accomplish an organization’s objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client.

Pure subsistence economy

Each family unit produces everything it consumes.

Macro-marketing

A social process that directs an economy’s flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society.

Economies of scale

As a company produces larger numbers of a particular product, the cost of each unit of the product goes down.

Universal functions of marketing

Buying, selling, transporting, storing, standardizing and grading, financing, risk taking, and market information.

Buying function

Looking for and evaluating goods and services.

Selling function

Promoting the product.

Transporting function

The movement of goods from one place to another.

Storing function

Holding goods until customers need them.

Standardization and grading

Sorting products according to size and quality.

Financing

Provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products.

Risk taking

Bearing the uncertainties that are part of the marketing process.

Market information function

The collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities.

Intermediary

Someone who specializes in trade rather than production.

Collaborators

Firms that provide one or more of the marketing functions other than buying.

Economic system

The way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society.

Command economy

Government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why.

Market-directed economy

The individual decisions of the many producers and consumers make the macro-level decisions for the whole economy.

Simple trade era

A time when families traded or sold their surplus output to local distributors.

Production era

A time when a company focuses on production of a few specific products—perhaps because few of these products are available in the market.

Sales era

A time when a company emphasizes selling because of increased competition.

Marketing department era

A time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm’s activities.

Marketing company era

A time when, in addition to short-run marketing planning, marketing people develop long-range plans—sometimes five or more years ahead—and the whole-company effort is guided by the marketing concept.

Marketing concept

The idea that an organization should aim all of its efforts at satisfying its customers—at a profit.

Production orientation

Making whatever products are easy to produce and then trying to sell them.

Marketing orientation

Trying to carry out the marketing concept.

Triple bottom line

A measure of long-term success that includes an organization’s economic, social, and environmental outcomes.

Customer value

The difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits.

Social responsibility

A firm’s obligation to improve its positive effects on society and reduce its negative effects.

Marketing ethics

The moral standards that guide marketing decisions and actions.