Marketing: Marketing and Health Care

Health care includes hospital health care, physician services, dental services, drug and medical supplies, physical therapy, nursing home care, substance abuse services, and psychological health care.  It includes both profit and no-profit businesses.  In 1991 a total of $756 billion was spent in the United States on health care.  This is a huge and constantly growing market.  There is a huge financial burden on placed on health centers, due to 37 million uninsured people in the United States.    This makes marketing to and by health care institutions challenging and necessary.

To provide health care services, health care institutions must purchase a rather sizeable amount of goods and services.  Marketers supply health care institutions with buildings, medical equipment and supplies, machinery, office equipment and supplies, utilities, and insurance.  Advertising and sales people that are specialists in their field mostly fill these needs.  For example, the pharmaceutical industry relies heavily on the marketing efforts to sell medical drugs to health care institutions.  Marketers in this over $75 billion industry may spend more than $200 million on marketing just to introduce a new product to this market. Pharmaceutical sales people make calls to doctors, trying to introduce them to new products. They provide physicians with promotional samples to give to their patients.  In addition, pharmaceutical marketers use heavy media advertising such as television and radio advertising, and promotional videos and publications.  These forms of advertising familiarize consumers as well as physicians about medical drugs. 

On the other hand, there is marketing by health care institutions.  Providing health care is a highly competitive endeavor.  The number of hospitals has decreased due to consolidation and the need for more cost efficient facilities.  Trauma centers in hospitals and nursing homes are over crowded and short staffed.  Health care organizations must compete for patients, doctors, nurses, and financial resources.  The number of nursing home facilities has increased during the past 3 decades.

 However, more facilitates are needed to take care of the growing number of senior citizens.  To meet the challenges of the health care institutions must effectively market their services to prospective patients and funding sources.  Private and public health care institutions depend on patient’s fees, government funds, and contributions to carry out their missions.  Health care organizations use several types of media to market their services.  Consumer interest in good health has provided new opportunities for marketers.  Health products have dominated new product developments in the grocery store.  The necessity of health care will always create marketing opportunities for health care institutions.

Market System: 6 major Characteristics of the Market System

The Market System is an economy in which only the private decisions of the consumers, resource suppliers, and firms determine how resources are allocated.  I am going to talk about the six major characteristics of the market system.

1) Private Property- private individuals and firms not the government own most of the property resources (land & Capital) when combined with the freedom to negotiate binding legal contracts, it enables individuals and businesses to obtain, use and dispose of property resources as they see fit.

a.  Property rights encourage investment, innovation, exchange, maintenance of property, and economic growth.

b.  Property rights also extend to intellectual property through patents, copyrights, and trademarks.

2) Freedom of Enterprise and choice- This idea is closely related to private property (freedom of enterprise) is the freedom to obtain resources to produce their select goods and services and are allowed to sell in whatever market they choose. Freedom of choice enables owners to employ or dispose of their property and money as they see fit.  It allows workers to enter and line of work for which they are qualified, and it ensures that consumers are free to buy the goods and services that best satisfy their wants and needs.  These choice are free only within broad legal limitations.

3) Self-Interest- is the motivating force of all the various economic units as they express their free choice.  In other words each economic unit does what’s best for itself.  This gives consistency or balance to the economic system.  Entrepreneurs try to maximize profit or minimize loss.  Property owners try to get the highest price for the sale or rent of their resource.  Workers try to maximize their utility and consumers try to obtain the products they want at the lowest price possible and apportion their expenditures to maximize their utility.

4) Competition- is the cornerstone of freedom of choice.  It is the freedom of choice exercised in pursuit of monetary sources. This requires; independently acting sellers and buyers operating in a particular product or resource market. And the freedom of sellers and buyers to enter or leave markets on the basis of their economic self interests.

5) Markets & Pricing- are key characteristics of the market system.  They give the system its stability to coordinate millions of daily economic decisions.  It is know as the Coordinating Mechanism of the market system.

6) Limited Government- is an active but limited government.  The government has the ability to increase the overall effectiveness of the economic system in several ways.        

 

These six characteristics are key when it comes to evaluating a market system.  Carefully analyzing these areas can lead to a healthy and successful company and product life.

Marketing: Law Of Diminishing Returns and Economics

The Law of Diminishing returns also called the Law of Diminishing Marginal Product and the Law of Variable Proportions, is the principle that states as successive increments of a variable resource(labor) are added to a fixed resource (capital and land) the marginal product of the variable resource will eventually decrease.  This law assumes that technology is a fixed entity, and each successive worker has the same innate ability, motor functions, education, training, and work experience.

Units Of     Variable Resource	Total       Product	Marginal Product	Average Prodcut
0	0
1	10	10	10
2	25	15	12.5
3	45	20	15
4	60	15	15
5	70	10	14
6	75	5	12.5
7	75	0	10.71
8	70	-5	8.75

1. Units of variable resource: Labor
2. Total Product(TP): is the total quantity, or total output of a particular good produced.
3. Marginal Product (MP): is the extra output or added product associated with adding a unit of variable resource, to the production process.  It can also be represented as a mathematical notation; MP= change in total product/ change in labor input
4. Average Product (AP): also called labor productivity, is output per unit of labor input.  This to can be expressed with a formula; AP= total product/units of labor

This table shows that in the short run, a company can increase output by adding units of labor, but in the long run each successive unit of output will cause negative marginal returns.  Finding the right balance is the key to marginal success.  This is an economic based topic but it is in response to a query posted earlier this week.  I know that this question was for a school project.  I hoped that this helped getting you on your way to the answer.  

Stages in the Consumer Decision Making Process

The five stages of the consumer decision making process include; Problem recognition, information search, information evaluation, purchase decision, and evaluation after purchase.  This is just a general model of the decision making process and it emphasizes that the buying decision making process starts before the actual purchase and continues even after the purchase.  It also encourages the marketer to focus on the complete buying process and not just on the purchase decision.

Problem Recognition: consumers recognize a problem as a need or want.  Of course, the most frequent problem occurs when consumers realize they are out of the product. For example, when the gas tank gets near empty, or you run out of lunch meat for your sandwiches, or when your car is due for maintenance.  Problem recognition also occurs when a consumer receives new information about a good, service, or business.  New fashions, for example, can make people recognize that their current clothing is not in style or up to date.  Different circumstances can change and force a consumer to recognize a major buying problem.  A stay at home mom who returns to the work force may need a new wardrobe.  A first year college student may need a personal computer.  A recently retired couple may now have the time and money to take a European vacation.

Information search: consumers search for information that is helpful in making a purchasing decision.  They may get this information in one or in many ways.  Marketers are interested in the major information sources that consumers use and the influence each has on the final purchase decision. Consumer information sources typically fall into four groups: 

• personal sources;
• commercial sources;
• public sources; and
• experience sources.

The consumer receives the most information from commercial sources.  these include advertisements, salespeople, catalogs, newspapers, and manufacturer-supplied direct mail. However, the most effective influence often comes from such personal sources as family members and friends.  Effective marketers try to identify the information sources and their relative influence on customers.  This means asking customers how they heard about the product, what sources of information they turned to, and what influences each source of information had on their purchase decision.  This consumer information helps marketers plan advertisements, select information to give to customers, and choose other marketing techniques to meet consumer needs.

Information Evaluation: follows the information search.  During this stage consumers usually compare products with respect to their various features and benefits.  They may compare product brands, styles, sizes, colors, prices, and related services.  They may also compare products at various stores.  They consumer may also evaluate the importance of certain information.  For many consumers, perceived reliability is extremely important.  For others, price, ease of operation, related services, or prestige may be paramount.  Other information may be more important to consumers when evaluating services.  While vacation, traveling, for example some consumers may want to only stay at the Hilton, while others are more prone to lodging at the less expensive locations.  Consumers generally evaluate goods and services by the features or benefits that are important to them.  retailers and other marketers often try to influence the type of criteria that consumers use in their product evaluations.  they frequently use ads that compare the features of their products with those of their competitors.

Purchase Decisions:  At this stage in the decision making process, consumers have recognized a need, done some research on the product, and evaluated available alternatives.  they are now ready to make a purchase decision, the actual buying of a specified product.  Many factors influence the purchase decision.  These include the cost of the product compared to how much money the consumer can afford to spend, the opinions of family or friends, and the sales and services policies of the marketer.  Some customers may wish to try a product before making a major purchase. 

Evaluation After Purchase: After customers make buying decisions, they often continue to evaluate them.  Post-purchase evaluation occurs when a customer seeks reasons to support a purchase decision.  retailers use the term buyers remorse to describe a customer's  second thoughts after a purchase.  Marketers use the term cognitive dissonance to refer to post-decision doubt that a customer has about an original purchase.  This doubt stems from an awareness that in reaching a particular buying decision the individual may have rejected certain attractive alternatives. Doubt is created when the motive for buying the alternative overshadows the actual purchase.  Marketers take positive steps to reduce cognitive dissonance and to help buyers feel good about their purchases.  Successful marketers know that a satisfied customer is an excellent advertisement for the company and its products.  They try to fulfill their customers needs and wants.  Customer oriented practices usually result in customer recommendations, called word of mouth advertising, and customer loyalty and repeat business.

Market Segmentation: Age, Gender, Education and Occupation, & Ethnic Background

Market segmentation is the process of dividing the market into segments or groups according to the customers needs and characteristics. Market segmentation helps marketers identify understand the various groups of possible customers. This allows marketers to tailor their offerings to meet the exact needs of one or all of the segmented markets. For example, the automobile industry has grown to its present size and diversity because auto manufacturers recognize and try to meet the needs of the many different segments within the total auto market.

Market segmentation is just as important to retailers and wholesalers as it is to manufacturers. For example, a department store and a discount store may offer the same television set. However, their ways of pricing, promotion, and distributing the television set may be very different because they are tailoring their marketing efforts to two distinct segments of the consumer market. The department store is targeting people in middle income bracket while the discount store is targeting those in the low income bracket. A market may be segmented according to several variables. These variables may be classified according to four categories: Demographic, geographic, psychographic, and behavioristic variable. Demographics involves statistics about population patterns such as age, gender, education and occupation, and ethnic background. Marketers study demographics to determine common needs and spending patterns.

People within a certain age group have many buying needs in common. For example, babies need diapers and formula, special care and clothing. People over the age of 65 tend to need medicine and other health care products. As you can see this specific market demand allows marketers to segment a market. Some manufacturers concentrate their entire production on a single age group. Marketers generally divide the consumer market into five age groups. These groups are children, teenagers, young adults, the middle aged, and the over 65s.

The Children's Market is made up of youngsters to the age of 10 year s old. This market includes about 15 percent of the total population. This market segment ends at age 10, because many 10 to 12 year olds model their behavior and attitudes to those of teenagers. Even before children enter school, they begin to form their own tastes and preferences. Their independences are reflected in the amount their parents spend on them and in the amount they spend themselves.

The Teenage Market is composed of young people ages 10 to 19. It accounts for some 18 percent of the population. Typical teenagers have special tastes, attitudes and outlooks. They are interested in the new, (new fashions, new music, new cars, new foods, new hairstyles, and new ideas. They want to play new video games, buy new tapes and compact discs, see a movie and go out clubbing. The teenagers disposable income is growing and brand loyalties are lasting. About 45 percent of all teenagers work and/or receive a weekly allowance. About sixty percent of teens have a hand in making out the family grocery list, and about 40 percent select the brands that are bought. Many of the sophisticated marketing techniques are aimed at young women and teenage girls. More than 6.5 million teenage girls have charge accounts and about 16 percent have credit cards.

The Young adult market consists of young adults ages 20 to 34. It contains about 24 percent of the population and is important because of both size and purchasing power. People in this age group get their first major career positions, get married, establish homes, and start families. They are the vital market segment for marketers of automobiles, auto accessories, clothing, housing, home furnishing, and children's products. Marketers know that this group has major needs and wants, has the money to satisfy them, and is willing to spend. For example, a furniture manufacturer may place ads for a dining room set in magazines read by young adults. An automobile dealer may put a commercial right before a television program popular with this age group. An airline may mail brochures to a list of young adults to promote vacations for couples.

The middle aged market is made up of ages 35 to 64. It includes the baby boomer generation. This group has the most buying power and buys the largest number of consumer goods and services. Many middle aged people, particularly the older ones, are at the peak of their earing power. Thus, this market segment receives much attention from the makers of high priced, top quality goods and services. These include cars,insurance, vacation homes, escorted tours, and expensive recreational goods such as airplanes, boats and swimming pools.

The over 65 market makes up about 14 percent of our population and is growing. People in this age group are, of course, consumers of the basic necessities. Most have discretionary income or expendable income, which is, the money left over after paying for the basic cost of living. Many people over the age of 65 have leisure time they want to fill. Some of them also have physical problems that require special goods and services. The marketers in retirement areas market the products to older residents in several ways.

Gender
Segmentation by gender is an obvious way of identifying possible markets. Women and men sometimes look for different benefits in products. In the past some goods, such as power tools and sporting goods, were bought mainly by men. Others such as groceries and health care products, were purchased mainly by women. These patterns are not staying constant over time. Women today have an increasing amount of personal buying power due to increased income levels. More women are buying such things as power drills and more men are shopping for groceries and grooming aids. Marketers are aware of and are addressing these changes in buying patters.

Education and Occupation
Today, more people are going to school at all levels that even before. They are also attending school for longer periods. In fact, education has become a lifelong process. School and businesses offer courses not only to improve job skills but also for self-improvement. The increased interest in education may lead many people to higher paying job positions. This means they will have more discretionary income to spend on goods and services. People in certain occupation form ideal segments for related goods and services. the marketers of career related goods and services target possible customers according to their occupations.

Ethnic Background
Markets for goods and services can be segmented according to ethnic groups. An ethnic group is all the people who have such characteristics in common such as racial background, language, social customs, or physical traits. Everyone is a member of at least one ethnic group. In fact, because of our diverse population in the United States, many people can trace their origins to several ethnic groups. There are numerous ethnic groups in our country. When members of these groups first arrived in the United States, they settled near friends and relatives and formed ethnic neighborhoods. These various ethnic groups established grocery stores, bakeries, and restaurants in their neighborhoods. These and other marketing outlets all them to help preserve their cultural conditions. Each ethnic group makes up a market segment allowing the marketer to meet the specific needs and wants of the customer.

Marketing and The Consumer Market

To fulfill their customers needs and still make a profit, marketers must thoroughly understand the characteristics of their various markets. As you already know from my previous articles. A market is all the potential customers for a product. There are two primary types of markets: the consumer market and the industrial market.

The consumer market is all of the potential customers for goods and services sold for personal use. This includes people like you and your family: people who buy such things as clothes, watches, food, auto insurance, notebook paper, dry cleaning services and televisions for their own use and enjoyment. These are known as consumer products (goods and services intended to satisfy the needs and wants of the individual consumer). The consumer market in the United States is amazing. There are more than 250 million people in the United States, and the population is constantly growing and changing. For example, every year:
• Every year people get jobs for the first time and begin to earn their own money;
• New consumer goods and services are introduced into the market;
• Thousands of individuals and families move to different parts of the country;
• The average earnings of the average person can increase or decrease with fluctuations in the economy; and
• Thousands of people retire and completely change the patterns of their lives.

Statistics about population patterns such as age; gender, ethnic background, income education and occupation are called demographics. Demographic changes affect which products are developed and how products are marketed. For example, an increase in population could result in a greater demand for the production of certain goods and services. On the other hand, it could mean that existing products have to be marketed differently to reach a larger or a more diverse audience. Increasing in average income could mean an increase in spending.

The three areas of change in the consumer market that most affect marketers are:
• The size and characteristics of the population;
• The amount of money customers have available to spend; and
• The way customers spend their money.

Thus you can see why marketers seek data on population, income, and spending patterns. This information helps them develop and seek the goods and services that society needs and wants.

The Marketing Functions

Modern marketers try to make consumers realize how marketing meets their demands for goods and services.  The term added value describes the advantages that marketing provides for the consumer. The value added emphasizes what the consumer receives in return for the costs involved in brining the product to the market.  In the process of adding value to products, many marketing functions occur.  The marketing functions explain the working to the overall marketing system.  They help connect the producer and the consumer.  How these functions are carried out and who performs them may vary from one economy to the next, but they are still carried out in every marketing system.  The eight functions of marketing are classified in three main groups:

• Exchange;
• Physical distribution; and
• Facilitating functions.

The two exchange functions are buying and selling.  Exchanges involve the transfer of products from the buyer and seller.  Before marketers can buy goods for resale, they must determine the customers’ needs through careful research.  Marketers must find the suppliers who can best provide the goods that will satisfy these needs.  They must also arrange the best shipping dates for the merchandise.  The selling functions include targeting customers, meeting competition, and setting prices.  They also involve persuading consumers to buy goods.

Physical Distribution functions involve the actual movement of goods from one producer to another, from producer to marketer, and from marketer to consumer.  Tow important physical distribution functions are transporting and storing.  Many products travel log distances, often by rail or truck, from the producer to the actual market so that consumers have access to the products.  Marketers must not only find the best way to ship a product but the must also know time schedules and costs involved.  On their way to the market, goods may often be stored in warehouses.  This is necessary when they are produced ahead of time they will be needed or when large shipments must be broken down into smaller shipments before being marketed.  Transportation thus gets goods to the right place, while storage gets them to the market at the right time. 

Facilitating Functions support and make easier the basic buying and selling, transporting and storing functions.  These functions include: 

• Standardizing and grading (offering goods of uniform size and quality)
• Financing (providing the necessary funds to produce, store, transport, and sell goods and services).
• Risk bearing (planning the uncertainties of marketing activities through risk management and insurance).
• Gathering marketing information (continually collecting and analyzing the information needed to plan, organize, conduct, and evaluate marketing activities). 

I will talk about each one of these functions later in greater detail.

The Marketing Mix: The Four Major Elements

To achieve its goals, a business must create a marketing program.  The four major elements of a marketing program are:

• Planning and developing the product idea;
• Deciding how to price the product;
• Convenient placement of the product allowing for easy customer access; and
• Promotion of the new product.

Product, price, place, and promotion are the four P’s of marketing.  They make up what is known as the marketing mix (the core of a company’s marketing system.  Each element of the marketing mix is interrelated and is used to target a market in order to make a profit. 

Product:  When marketers make decisions about products, they ask themselves what product to make, when to make it, how to package and label it, how many to offer on sale, and at what level of quantity to produce at.  To answer these questions, marketers must anticipate their customers present and future needs.  Macintosh computers are a great example.  They developed a computer that was easy to operate, yet capable of rapidly processing a greater volume of work that most pc’s.  Another example, when automobile companies bring out a new line of cars, they often ask their most recent customers for their opinions on the latest models.

Price:  The price a customer is willing to pay and the price that a marketer is willing to offer a product at, determine whether or not an exchange will occur.  Many things influence pricing.  For example, number of suppliers, number of customers in a market and the availability of the product.  Sometimes customers are willing to pay a high price for something they want, such as luxury automobiles, tickets to the world cup, jewelry, and clothing.  At other times, due to the seasonal changes or a large supply of an item, marketers must lower prices on products to encourage spending.  For example an automobile dealership usually reduces its prices at the end of the year to move old models out and make room for the new inventory.  Price may also be set low when a new product is introduced into the market to encourage people to try it.

Place:  When marketers make decisions about place, they base them on how their products will get from producers or manufactures to the people who will use them.  They may decide to market their products directly to the consumers.  Or they may decide to market through intermediaries, i.e. wholesalers and retailers.  Consider Ben & Jerry’s Homemade Inc.  Ben Cohen and Jerry Greenfield, friends and avid ice cream eaters, founded this Vermont based ice cream company in 1978.   When they decided to manufacture and market their brand of super premium ice cream, they began by selling it to their own Burlington, Vermont shop.  Before Long they decided they could reach more customers by placing their ice cream in restaurants and supermarkets and by opening new ice cream shops.  Getting the product to the customer as quickly as possible is an essential aspect of the marketing mix.  Place marketing may involve several ways of reaching customers.

Promotion:  Promotion includes all the activities designed to bring a company’s goods or services to the favorable attention of customers.  When marketers promote products, they educate potential customers about them through promotional activities such as newspapers, radio, television, magazine advertisements, and the Internet!  Billboards are a great example of promotion.  They are widely visible and they reach out to many and promote the product and a wide scale.  Attractive displays in store windows invite customers to shop and buy what they see.  Turn on your radio or your television at any time of the day, and you will hear commercials for everything from retail stores to automobiles.  Buy a newspaper or a magazine and you will find that it contains a wide variety of advertising as well. 

As you can see, many forms of promotion are effective and essential part of marketing.  By putting customers’ needs and wants at the center of the marketing plan, marketers can develop the most effective marketing mix.  If they can create the best combination of the four P’s of marketing, the company or business will find great success, like Wal-Mart for example.

How Marketing Serves Customers

The process of both production and marketing add utility to goods and services. In marketing, utility is the usefulness of a product to consumers. To serve customers, businesses and five basic kinds of utility of products. The production processes ad form utility. Marketing processes add four other utilities to products: time utility, place utility, possession utility, and information utility.

Form utility is the increased usefulness of a product to a consumer by causing a change in the basic material through production. For example, glass, chrome and steel combined to form an automobile are more useful to consumers than they are as raw materials.

Time utility is the increased usefulness that a marketer gives a product by making it available to the customer at the right time of year and most convenient time of day. Marketers buy and store products so they will be available when customers need them. Months before Christmas season begins, marketers prepare to offer customers the merchandise they expect to see. Marketers plan for other holidays and events that take place during the year. Marketing provides goods not only at the time of the year customers want them but at the time of the day that is most convenient for them to shop.

Place utility is the increased usefulness of products because of location. Marketers add place utility to products by offering convenient selling locations and by shipping products to these locations. For example, place utility is added by locating in the shopping centers that are easily accessible to customers. A wonderful example of this would be your local shopping mall or Walmart. Another example would be the grocery store; being able to purchase produce from all over the world.

Possession utility in the ability of marketers to aid customers in owning goods. Marketers may add possession utility by offering credit or accepting checks. This enables the customer to purchase the product with out having to spend hard currency. Marketers may also add possession utility by offering a payment plan or a partial trade. This works well when going to purchase a new car. Possession utility takes place when marketing activities help to provide the customer with possession and legal ownership.

Information utility is the usefulness added to a product through communication. A great example would be advertising ( any sales message paid for by a sponsor and appearing in media) may inform customers of the benefits, availability, and prices of a product. A billboard promoting QT coffee, informs a traveler of a nearby service station. Packaging and labeling which i will go into ore in depth at a later juncture, may simplify shopping by identifying the qualities and best uses of products. Labels and warning on cold medicine contribute to relief and safety. The directions that come with a microwave oven tell the user how long to heat certain foods. By communicating with the public, marketers make products more useful.

In addition to time, place, possession, and information utility, marketing provides other customer benefits. People enjoy more conveniences and luxuries because marketing has made them possible. By creating a demand for products, marketing encourages greater production. When goods are manufactured in large quantities, the costs of producing them drops. Price and then be lowered, and more people will buy the goods. The personal computer is a great example.
Originally very expensive, but marketing information convinced many consumers of the educational, entertainment, and personal uses of this product. The increased demand, prompted large scale production and encouraged competition from other producers. Prices then came down, and marketers informed the public again. Demand increased even further, as more people discovered how they could benefit from this new product. The lesson learned is by adding utility to products, marketers increase the well being of the entire marketplace.

Marketing: The Target Market

Although businesses focus on serving their customers wants and needs, No business can serve everyone. In fact, most successful business first try to determine their target market, or the customers that they can best serve with their product. To identify the target market, most businesses use market segmentation (a process of subdividing the market according to consumer needs and characteristics).
For instance, a marketer may segment a market according to the special needs of young families, high school students, or Hispanics in the southwest. Some organizations target individuals and others target businesses.
Once a company identifies its target market, its activities can be guided by the marketing concept. For instance, Walmart first began focusing on the needs of moderate-income families who live in southern and Midwestern rural areas. To meet the needs of these customers, Walmart offered:

• Convenient locations in easy to reach shopping locations off highways serving a local community and nearby towns;
• a number of departments for one-stop family shopping, such as clothing and accessories, household goods, electronics, and toys;
• everyday affordable prices;
• a liberal return policy; and
  
• the option to buy on credit.
  

This is an example of how marketers use the marketing process to serve the target market, and achieve optimum success creating a win-win experience for all parties involved.

The Role of Business in the Economy

Atlskillz checking in and i wanted to write this in response to a comment. I hope that this information gets you to where you need to go with your paper.
To understand marketing and its role in our economy, we must first understand the term business. Business is all the activities involverd in produciong and distributing goods of individuals involved in producing and distributing goods and/or services to customers. The intent of business is to create satisfying exchanges Business plays a major role in the economy involving the production process and marketing. Productions is the process of creating or improving goods and services. For example manufacturing, mining, and agricultre are parts of the production process. Production requires four ingredients: natural resources, labor, capital, and entrepreneurs.

Natural resources such as fertile soil, water, minerals, and favorable climate are vital to a country´s well being and productivity. Soil is needed for raising grain, fruits, and vegetables. Water must be available for power, drinking, and transportation. Oil is needed for operating and lubricating machinery. The U.S. is fortunate to have abundant natural resources. the temperate weather favors agriculture. the lakes and river system provide a supply of fresh water. Without adequate natural resources, it would be difficult to produce goods in quantity. But even our country´s vast resources must be conserved. Through ecology--the study of our relationship to the physical environment-- we are learning how to preserve our natural resources.

Labor is all the human effort and activity that goes into producing goods and services. It refers to both part-time and full-time employees and to managers. There are some 140 million people employed in the United States. Many different demographics of people with wide ranges of talents and interests contribute to production through their work efforts.

Capital is all the tools (such as factories and machinery) and the money that are used in an organization´s operation. Natural resources and labor alone cannot meet the needs of production. Capital is necessary. When people own there own business, they put their own capital and labor into the business. Henry Ford, for example, invested his own capital along with funds from others investors to eventually become the Ford Motor Company. Sometimes people and organizations put capital into business without becoming involved in the daily operations. For example, investors buying stocks in a business. They become part owners of that company as a result of their investment, but do not go to work for that business. This capital that is generated helps a business operate and facilitates expansion.

Entrepreneurs are people that take that risk and provide the capital to start their own business. Some famous American entrepreneurs include Richard Sears (Sears), Liz Claiborne, Bill Gates, Sean P. Diddy Combs, John D. Rockefeller. these people´s creative business ideas and efforts created some of the worlds best known organizations. This entrepreneurial spirit is not designated to large companies. About ninety-five percent of all U.S. business are small businesses. In an effort to capitalize on the entrepreneurial spirit, many large and forward thinking companies promote creative approaches internally. This is known as intrepreneurship, the process involves the development of new methods and ideas within larger company in a free wheeling manner similar to that of an entrepreneurship. Companies encourage their employees to put their creativity to work by helping the company to develop such things as new and improved products, better marketing strategies, and improved management practices.

Production is so important that we measure the health of our entire economy by the amount of goods and services produced each year. The total value of the final goods and services produced in the nation over a specified period is whats known as the Gross National Product (GNP). Closely tied to the GNP is the standard of living, or how well the people is a given nation live. the standard of living can be determined by dividing the GNP by the nation´s population. This is Called per capita GNP. The more goods and services a nation produces in proportion to its population, the higher its standard of living (unless it exports most of those goods and services).

Alternative Economic Systems

Capitalistic nations such as Japan, Germany, South Korea, and Brazil have systems similar to ours. But, as you know, not every country operates within a private enterprise system. Many other nations live with in socialist or communist economic systems.

Socialism is an economic system that depends heavily on the government to plan and make economic decisions. Under socialism, the government owns and controls important economic resources and industries, such as communications, transportation, minerals, utilities, and major manufacturing. Classic examples of a socialist nation are Holland, Spain, New Zealand, Norway, Ireland, and Australia.

Socialist claim there are several advantages to their economic system. First, they say their system distributes personal income more equally and thus provides the masses with a higher standard of living. Socialist also claim that a socialist government can better care for the people´s welfare. In a socialist system, many things such as college education, health care, public transportation, and housing are offered free or more cheaply than in a capitalist system.
In contrast a free college education would be nice, but in many socialist nations, the average personal income tax rate is somewhere around 45%. The highest personal income tax in the United States is about 36%.

Communism describes a socialist economy ruled by a single political party where all industries are resources are owned by the government. Communism is based on the economic and political doctrines of Karl Marx, a German political philosopher who died in 1883. His goal was to create a slassless society. In contrast to capitalism and socialism, communism offers people few economic freedoms. North Korea, Vietnam, and Cuba are communist nations. Many communist nations have undergone massive reforms of their economic systems. These reforms have and will continue to have an impact on our world economy. Businesses will intergrate themselves into the world economy through economic alliances within other nations. People who had limited freedom to make economic decisions in the past will have a stronger influence on economic decisions in the future. As time progresses their will be fewer trade barriers among countries and more changes in international politics and policies

Marketing and Our Economic System: The Three Basic Decisions

Atlskillz checking in to talk a little bit to talk about marketing and our economic system. Every economic system has the economic problem of determining how to use its natural resources. In a planned economy, such as north Korea, the government decides the economic questions. In a private enterprise, or capitalist, system, such as in the United States or Japan, the people (consumers, business owners, and workers), make the economic decisions. These decisions interact in the marketplace and create our ever changing economy. This change in our economy is possible because the bulk of capital is privately owned by people themselves and not by the government. However the decisions of the marketplace are subject to laws and regulations of our government. Here are the three basic questions every economic system must deal with.

1. What goods and services should be produced?
2. How should they be produced?
3. How should they be distributed?

What should be produced?
In a planned economy, the government decides. In a private enterprise, the choice is the consumers and producers, determine the goods and services to be produced. In the united States, however the peoples choices are some what restricted. Products such as some narcotics, can not be legally produced. the production of some products such as cars and medicine, is regulated for safety by the government.

How should it be produced?
Productions is the process of creating or improving goods and services. An economic system must decide how to produce goods efficiently, and thus make the best use of its resources. A production method might require a great deal of hand labor but only a little bit capital. If the hand labor was replaced with machines, there would be savings in labor but increased capital required to purchase the machines. In a planeed economy, the government either owns the means of production or decides who will own them. It also decides how to use the nations resources. In a private enterprise economy, business people decide which resources they will employ, although they are not always free to make such decisions. Safety laws, for example, might prevent them from using less expensive but more hazardous equipment in the work place.

How should it be distributed?
Division of available goods and services is important to a sound economy. Who will get what, if there is not enough who gets some and who doesn't. In a planned economy, the government decides who gets what and how distribution is to be made. In a private enterprise, goods and services are distributed according to personal income. The more you earn, the more you can buy. Taxes are used in part for such programs as welfare and social security which help provide the poor with goods and services.

Ethics and Marketing Concept

Ethics are guidelines for good behavior that benefit everyone in society. Marketing ethics are the guidelines of behavior designed for organizations and their employees in their role as marketers. Some rules of ethical behavior are enforced by law.

Laws can enforce promises that are clearly documented as part of a contract. If you and an employer sign a contract and the employer does not pay you for the work you have done, the employer is acting unethically. By law, you must be paid money in exchange for your services.The law also protects a person´s inventions from theft, thus assuring reward for creative effort. For example, the inventor of the cell phone. The inventor registered their unique technological design with the US Patent Office. The inventors alone can sell their product or hire someone to do it for them. The law cannot unfortunately assure fairness and ethical behavior when verbal agreements have not been written into formal contracts.

When implementing a marketing concept, a business should be guided by the standards of marketing ethics. This means that the transactions should benefit everyone fairly. The general rules of good ethical behavior are the basis of the American Marketing Association´s "Code of Ethics." Applying good marketing ethics to the marketing concept can lead to long term satisfaction for the business, the customers, the consumers, and the community. Thus, sound marketing ethics, such as producing safe products, contribute to a marketer´s own sales and profits in the long run.

The Marketplace and The Marketing Concept

The marketplace is the commercial environment where we make exchanges. Money is exchanged for goods and services, work is exchanged for wages, and sometimes goods are traded for other goods and services. Our society relies on the marketplace to communicate customers wants and needs to manufacturers of products. Even though marketing is more than selling, the sale is the central transaction of the marketing process. A sale is an exchange of a product for something else of value, usually cash or credit. The sale rewards both buyer and seller by giving each something of value. An in crease in sales volume tells marketers and producers the demand is high and to offer more products.

Marketing plays a major part in our economy. It determines the way we choose to use our nations resources. In your study of marketing you will look at 2 marketing concepts: micromarketing--how products are conceived, promoted, priced, and distributed in individual marketing situations and macromarketing-- the process that directs the flow of goods and services in an economy. Here in the United States, the consumer is the driving force of our economic system. Other economic systems are driven by different forces--government for example.

The Marketing Concept is the idea of fulfilling the wants and needs of customers at a profit or other gain for a nonprofit organization. A business that applies the marketing concept, first determines the customers it is best equipped to serve and then works to meet their needs. Instead of trying to sell one product to everybody, the firm markets its products to the customers most likely to buy them.

Organizations employing the marketing concept create win-win exchanges for both buyers and sellers in transactions. Ford created a win-win situation with the design of the Taurus. The design was developed from extensive research on a focused target market. When the company produced the car its customers wanted and the customers responded by buying it in record numbers.

Marketing in Modern Society

The American Marketing Association(AMA) defines marketing as 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. People have wants and needs that they satisfy by obtaining products. A product is all the physical features and psychological satisfactions received by the customer. Marketers use the term products to refer to both goods and services.

Goods are products grown or manufactured and prepared for sale. They are tangible, which means they can be physically touched. Cameras, books, magazines, televisions and automobiles are all goods. Services are benefits or satisfactions that improve the personal appearance, health, comfort, or peace of mind of their users. Services are intangible, which means they can not be physically touched. Services include, health care and insurance, haircut or styling, auto-repair. Services can not be separated from the organization or person giving the service.

A customer is anyone who buys or rents goods or services. A consumer is the person who uses the goods or services. Often, the customer and the consumer are the same person, but sometimes they are separate people. When parents buy baby food and infants clothing, for example they are the customers but the infants are the consumers. Customers and consumers may be individuals, or institutions such as hospitals, schools and governments.

Marketing begins with the people. Both the customer and the consumer are considered in the development and marketing of any product. For example, a great deal of breakfast cereal is marketed to young consumers. Yet adults do most of the food purchasing and their purchases are strongly influenced by their children's preferences. This scenario is why businesses must take into account what consumers as well as what customers want. As a result, manufacturers develop their goods with potential target markets in mind. A market is all the potential customers and consumers for a product. In order to reach everyone in that market, manufacturers create an array of goods at all different price levels and design to meet the needs of potential customers.

The combined result of all this product specialization and market competition promotes great market diversity. We Americans enjoy a wide range of choices in selecting products. Behind each of these products are marketing researchers, product planners, warehouse and trucking companies, and professional buyers and sellers. There are also stores of every sizee and description, advertising specialists and a host of others dedicated to serving the public through the marketing process.