Introduction to Goods and Services Economics

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Questions and Answers

Which of the following categories does NOT include the marketing of physical goods?

Experiences

Goods

Services (correct)

Properties

What is the current services-to-goods production mix in the U.S. economy?

80–20

60–40

50–50

70–30 (correct)

Which of the following is an example of a service-based offering?

A car

A hotel room (correct)

A refrigerator

A cereal box

What type of marketing is involved in promoting time-based events such as the Olympics?

Event marketing Signup and view all the answers

Who has been recognized as a master of self-branding?

All of the above Signup and view all the answers

Which of the following is an example of a product in the category of properties?

Stocks and bonds Signup and view all the answers

Which category focuses on creating experiences for customers?

Experiences Signup and view all the answers

What role do economic development specialists play in marketing?

Promoting places to attract investments Signup and view all the answers

What is one consequence of deregulation in various industries?

Increased marketing costs Signup and view all the answers

Which of the following companies is an example of privatization?

Telefónica CTC Signup and view all the answers

What is a major effect of intense competition among brands?

Shrinking profit margins for brand manufacturers Signup and view all the answers

What best describes industry convergence?

When boundaries blur between industries to create new opportunities Signup and view all the answers

How are store-based retailers responding to competition from e-commerce and other channels?

By enhancing the shopping experience with interactive features Signup and view all the answers

What led to disintermediation in product delivery?

The emergence of early dot-coms like Amazon and eBay Signup and view all the answers

Why have some brands developed into megabrands?

They have extended into a variety of related product categories Signup and view all the answers

What is a notable feature of Dick's Sporting Goods that contributes to its success?

Interactive features such as testing equipment in-store Signup and view all the answers

What strategy did traditional companies adopt in response to the rise of online firms?

They engaged in reintermediation. Signup and view all the answers

How has the Internet contributed to consumer buying power?

By enabling comparison of product prices and features. Signup and view all the answers

Which of the following platforms allows consumers to engage in verifying product information and reviews?

Wikipedia Signup and view all the answers

What has caused consumers to show less brand loyalty in recent times?

Perceived fewer real product differences. Signup and view all the answers

What effect has disintermediation via the Internet had on consumers?

It has increased their power to shop globally. Signup and view all the answers

What is one way companies are inviting consumer participation in their processes?

By allowing customers to design and market products. Signup and view all the answers

Which of the following best illustrates consumer resistance in the modern marketplace?

Increased price and quality sensitivity due to perceived similarities in products. Signup and view all the answers

What role do social media platforms play for consumers?

They create personal connections and facilitate user-generated content. Signup and view all the answers

What was one of the primary purposes of the partnership between Nike and Lance Armstrong?

To promote Armstrong’s LIVESTRONG campaign Signup and view all the answers

What technology does Nike (Plus) utilize to enhance the running experience?

A sensor placed in the running shoes and a receiver for devices Signup and view all the answers

What event did Nike host in 2008 and 2009 to celebrate running?

Human Race 10K Signup and view all the answers

In partnership with which retailers did Nike create House of Hoops?

Foot Locker Signup and view all the answers

Which athlete was notably featured in a 2008 Wimbledon match that served as a high-profile Nike advertisement?

Roger Federer Signup and view all the answers

How many yellow LIVESTRONG bracelets did Nike produce and sell?

70 million Signup and view all the answers

Who were some of the basketball superstars featured by Nike to promote their products?

Kobe Bryant and LeBron James Signup and view all the answers

What was the outcome of the LIVESTRONG bracelet sales for the Lance Armstrong Foundation?

$80 million raised Signup and view all the answers

What is the primary reason Nike does not heavily promote its eco-friendly efforts?

Sustainability does not align with their brand image. Signup and view all the answers

What percentage of market share does Nike hold in the running category due to its partnership with Apple?

60 percent Signup and view all the answers

Which of the following best describes the focus of Nike's long-term strategy?

Specialization in basketball, running, and sports culture. Signup and view all the answers

Which of the following statements about the House of Hoops by Foot Locker is true?

It offers only basketball products. Signup and view all the answers

What initiative does Nike use to engage runners in determining their official race times?

Nike (Plus) technology. Signup and view all the answers

How did Nike's revenue in fiscal 2009 reflect its market position?

Exceeded $19 billion, highlighting its market dominance. Signup and view all the answers

What kind of products does Nike now offer that extend beyond footwear?

Wristwatches and skateboards. Signup and view all the answers

How is the market share of Nike compared to its closest competitors in the athletic footwear market?

Nike has a 31 percent global market share. Signup and view all the answers

Study Notes

Goods and Services

Physical goods dominate production and marketing efforts, comprising fresh, canned, bagged, and frozen food products, cars, and home appliances.
The U.S. economy operates on a 70% services to 30% goods ratio, emphasizing its shift toward service production.
Services include various industries such as airlines, hotels, healthcare, and consulting, with many offerings blending goods and services.

Events and Experiences

Marketers actively promote events like trade shows and global sports tournaments (e.g., Olympics, World Cup) to engage both companies and consumers.
Experiences, such as visits to amusement parks or sports camps, combine services and goods for a heightened consumer experience.

Personal Branding

Notable figures (artists, CEOs, etc.) utilize celebrity marketers for self-promotion; individuals like David Beckham and Oprah Winfrey exemplify successful self-branding.
Management consultant Tom Peters encourages individuals to develop personal brands.

Place Marketing

Locations (cities, states, regions) compete for tourism and business by leveraging marketing strategies to attract visitors and investments.

Property Marketing

Intangible property rights include ownership of real estate and financial assets (stocks, bonds), requiring marketing strategies for buying and selling.
Deregulation in various sectors (e.g., telecom, finance) enhances competition; examples include the privatization of British Airways and Telefónica CTC.

Competitive Landscape

Increased competition from domestic and international brands pressures marketing costs and profit margins.
Powerful retailers produce store brands that challenge established brand manufacturers.
Industry convergence blurs lines between sectors, specifically in computing and consumer electronics, spurred by digital technology.

Retail Transformation

Traditional retailers face competition from e-commerce and direct advertising, prompting them to innovate with entertaining in-store experiences.
Dick’s Sporting Goods emphasizes interactive features to engage customers, enhancing shopping experiences.

Disintermediation and Consumer Power

Early dot-com successes (e.g., Amazon, eBay) disrupted traditional distribution channels, leading to reintermediation where existing businesses adapt to include online services.
Consumers enjoy enhanced buying power via online platforms, enabling price comparisons and ease of purchase.

Consumer Information and Participation

Consumers access extensive information online, influencing purchasing decisions and peer opinions.
Companies invite consumer involvement in design and marketing processes, fostering brand connection and ownership.

Consumer Resistance

Growing product similarity leads to decreased brand loyalty among consumers, pushing them towards price-sensitive purchasing behavior.
Nike’s partnership with athletes enhances its brand reach while supporting causes like the LIVESTRONG campaign, which raised significant funds.

Nike’s Strategies and Market Position

Nike holds a dominant position in the athletic footwear market, with a 31% global market share and 50% in the U.S.
It has implemented partnerships and technology (e.g., Nike+) to enhance customer engagement and promote a connected runner community.
Nike's eco-friendly efforts are understated to maintain its high-tech image; however, the company focuses on sustainability practices, such as recycling old shoes.
Revenues exceeded $19 billion in fiscal 2009, underlining Nike’s leadership in the athletic wear industry.

Background on Google

Founded by Larry Page and Sergey Brin in 1998, Google's name references a large number, reflecting the vast online data it organizes and makes accessible.

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Description

Explore the essential concepts of goods and services in modern economies. This quiz highlights the distinctions between physical goods and services, emphasizing their roles in production and marketing. Understand how the U.S. economy operates with a significant service sector.