The Role of Marketing

1. Markets bring together buyers and tell oners of goods and services. In some cases, such as a local fruit stall, buyers and dealers meet physically. In other cases, such as the tired mart, business can be transacted everyplace the telephone, almost by remote control. We penury not go into these details. Instead, we use a general commentary of food foodstuffs. 2. What the term market means A market is a shorthand expression for the process by which households decisions some utilization of alternative goods, firms decisions about what and how to bring on, and workers decisions about how a lot and for whom to work be all reconcile by adjustment of pricesPrices of goods and of resources, such as labour, machinery and land, adjust to ensure that scarce resources atomic number 18 used to produce those goods and services that ordination demands. 4. Economics studies markets and prices Much of economics is prone to the study of how markets and prices enable society to set tle the problem of what, how, and for whom to produce. Suppose you buy a beefburger for your lunch. What does this founder to do with markets and prices? You chose the caf because it was fast, contented and cheap.Given your desire to eat, and your limited resources, the low hamburger price told you that this was a good vogue to satisfy your appetite. You probably prefer steak precisely that is more than high-ticket(prenominal). The price of steak is high generous to ensure that society answers the for whom question about lunchtime steaks in favour of mortal else. 5. The sellers viewpoint instantly think about the sellers viewpoint. The caf owner is in the business because, wedded the price of hamburger shopping center, the rent and the engage that must be paid, it is still assertable to sell hamburgers at a profit.If rents were higher, it power be more profitable to sell hamburgers in a cheaper atomic number 18a or to switch to luxury lunches for rich executives on ex pense accounts. The student behind the snack bar is working there because it is a adequate set out-time job which pays a twat of money. If the wage were much lower it would scarce be worth working at all. Conversely, the job is unskilled and there argon plenty of students looking for such work, so owners of cafes do not have to walk very high wages. 6. Prices guide your decisionPrices be guiding your decision to buy a hamburger, the owners decision to sell hamburgers, and the students decision to entertain the job. Society is allocating resources meat, buildings, and labour into hamburger end product through the price system. If nobody desire hamburgers, the owner could not sell full at a price that cover the cost of running the caf and society would break no resources to hamburger production. Peoples desire to eat hamburgers guides resources into hamburger production.However, if cattle contracted a disease, thereby minify the economys ability to produce meat product s, competition to purchase more scarce supplies of beef would bid up the price of beef, hamburger producers would be compel to raise prices, and consumers would buy more quit sandwiches for lunch. Adjustments in prices would encourage society to allocate resources to reflect the increased scarcity of cattle. 7. We have adopted a general definition of markets There were several markets involved in your purchase of a hamburger. You and the caf owner were part of the market for lunches.The student behind the antipathetical was part of the local labour market. The caf owner was part of the local wholesale meat market and the local market for rented buildings. These descriptions of markets are not very precise. Were you part of the market for lunches, the market for prepared food, or the market for sandwiches to which you would have turned if hamburgers had been more expensive? That is why we have adopted a very general definition of markets which emphasises that they are arrangement s through which prices influence the allocation of scarce resources.