chapter 1Marketing’s Role inthe Global EconomyWhen You Finish This Chapter, You Shouldwww.mhhe.1. Know what marketing is andwhy you should learn about it. 2. Understand the difference be-tween micro-marketing andmacro-marketing. 3. Know why and how macro-marketing systems develop. 4. Understand why marketing iscrucial to economic developmentand our global economy. 5. Know why marketing special-ists——including middlemen andfacilitators——develop. 6. Know the marketing functionsand who performs them. 7. Understand the important newterms (shown in red).com/fourpsfar into a day without bumping into marketing—and what the whole marketing system does foryou. It affects every aspect of our lives—oftenin ways we don’t even consider. In other parts of the world, people wake upeach day to different kinds of experiences. Afamily in China may have little choice aboutwhat food theywill eat or wheretheir clothing willcome from. Afarmer in themountains ofJamaica mayawake in a bar-ren hut with littlemore than thehope of raisingenough to sur-vive. A busi-nessperson in alarge city like Tokyo may have many choices butnot be familiar with products that have nameslike Maxwell House, General Motors, and OscarMayer. What explains these differences, andwhat do they have to do with market-ing? In this chapter, we’ll answerquestions like these. You’ll see whatmarketing is all about and why it’s im-portant to you. We’ll also explore howmarketing affects the quality of life in differentsocieties and why it is so crucial to economicdevelopment and our global economy. When it’s time to roll out of bed in the morning, does yourGeneral Electric alarm wake youwith a buzzer—or by playing your fa-vorite radio station?Is the station playingrock, classical, or country music—or perhaps aRed Cross ad asking you to contribute blood?Will you slip intoyour Levi’s jeans,your shirt from L. L. Bean, andyour Reeboks, ordoes the day callfor your BrooksBrothers inter-viewing suit? Willbreakfast beLender’s Bagelswith creamcheese or Kel-logg’s FrostedFlakes—made with grain from America’s heart-land—or some extra large eggs and OscarMayer bacon cooked in a Panasonic microwaveoven imported from Japan? Will you drink de-caffeinated Maxwell House coffee—grown inColombia—or some Tang instant juice? Will youeat at home or is this a day to meet a friend atthe Marriott-run cafeteria—where you’ll paysomeone else to serve your breakfast? Afterbreakfast, will you head off to school or work ina Kia Sportage, on your in-line skates, or on thebus that the city bought from General Motors? When you think about it, you can’t get veryIf forced to define marketing, most people, including some business managers, saythat marketing means “selling” or “advertising.” It’s true that these are parts of mar-keting. But marketing is much more than selling and advertising. To il lu st ra te so me of t he ot he r im po rta nt th in gs th at ar e in cl uded in ma rk et ing,think about all the bicycles being peddled with varying degrees of energy by bikeriders around the world. Most of us weren’t born sitting on a bicycle. Nor do wemake our own bicycles. Instead, they are made by firms like Schwinn, Performance,Huffy, and Murray. Most bikes are intended to do the same thing—get the rider from one place toanother. But a bike rider can choose from a wide assortment of models. They aredesigned in different sizes, with different frames for men and women, and with orwithout gears. Off-road bikes have large nobby tires, and the tires on racing bikesare narrow. Some bikes have hand brakes and others have foot brakes. Kids andolder people may want more wheels—to make balancing easier; clowns want onlyone wheel, to make balancing more interesting. And some bikes need baskets oreven trailers for cargo or an infant seat for a small passenger. You can buy a basicbike for less than $50. Or, you can spend more than $2,500 for a custom frame—not including the wheels! This variety of styles and features complicates the production and sale of bicy-cles. The following list shows some of the many things a firm should do before andafter it decides to produce a bike. 1. Analyze the needs of people who might buy a bike and decide if they wantmore or different models. 2. Predict what types of bikes—handlebar styles, type of wheels, weights, andmaterials—different customers will want and decide which of these peoplethe firm will try to satisfy. 3. Estimate how many of these people will be riding bikes over the next sev-eral years and how many bikes they’ll buy. 4. Predict exactly when these people will want to buy bicycles. 5. Determine where in the world these bike riders will be—and how to getthe firm’s bikes to them. 6. Estimate what price they are willing to pay for their bikes—and if the firmcan make a profit selling at that price.How did all thosebicycles get here?Marketing is more thanselling or advertisingMarketing––What’s It All About?4 Chapter 1All bicycles can get you where you want to go, but there are many variations to meet the needs of different people.7. Decide which kinds of promotion should be used to tell potential customersabout the firm’s bikes. 8. Estimate how many competing companies will be making bikes, how manybikes they’ll produce, what kind, and at what prices. The above activities are not part of production—actually making goods or per-forming services. Rather, they are part of a larger process—called marketing—thatprovides needed direction for production and helps make sure that the right goodsand services are produced and find their way to consumers. Our bicycle example shows that marketing includes much more than selling oradvertising. We’ll describe marketing activities in the next chapter. And you’ll learnmuch more about them before you finish this book. For now, it’s enough to see thatmarketing plays an essential role in providing consumers with need-satisfying goodsand services and, more generally, in creating customer satisfaction. Simply put, cus-tomer satisfaction is the extent to which a firm fulfills a customer’s needs, desires,and expectations.Production is a very important economic activity. Whether for lack of skill andresources or just lack of