MKT chapter 3

environmental scanning
the process of collecting information about forces in the marketing environment
environmental analysis
the process of assessing and interpreting the information gathered through environmental scanning (how you deal with the information collected during scanning)
passive (approach to environmental forces)
accepting them as uncontrollable
proactive (approach to environmental forces)
attempting to influence and shape them
brand competitors
firms that market products with similar feature and benefits to the same customers at similar prices
product compeititors
firms that compete in the same product class but market products with different features, benefits and prices
generic competitors
firms that provide very different products that solve the same problem or satisfy the same basic customer need
total budget competitors
firms that compete for the limited financial resources of the same customers
monopoly
when an organization offers a product that has no close substitute, making it the sole source of supply
oligopoly
when few sellers control the supply of a large proportion of a product
monopolistic competition
when an organization with many competitors develops a marketing strategy to differentiate its products
pure competition
involves a large number of sellers which influences price or supply
The business cycle
a pattern of economic fluctuations that has four stages
prosperity
unemployment is low and total income is relatively high
recession
unemployment rises and total buying power declines
depression
unemployment in very high, wages are very low, total disposable income is at a minimum and consumers lack confidence in the economy
recovery
the economy moves from depression or recession to prosperity
buying power
resources such as money goods and services that can be traded in an exchange
income
the amount of money received through wages rents investments pensions and subsidy payments
disposable income
after-tax income
discretionary income
disposable income available for spending and saving after an individual has purchased the basic necessities
credit
enables people to spend future income now or in the near future, but it increases current buying power at the expense of future buying power
wealth
the accumulation of past income, natural resources and financial resources
procompetitive legislation
refers to laws designed to preserve competition
consumer protection legislation
federal and state laws (protect from harm)
federal trace commision (FTC)
most heavily influences marketing activities (of all regulatory units)
better business bureau
a system of nongovernmental independent local regulatory agencies supported by local businesses that help settle problems between customers and specific business firms
national advertising review board
a self-regulatory unit that considers challenges to issues raised by the national advertising division about an advertisement
technology
the application of knowledge and tools to solve problems and perform tasks more efficiently
sociocultural forces
the influences in a society and its cultures that bring about changes in people’s attitudes, beliefs, norms, customs, and lifestyles
to monitor changes in the marketing environment effectively, marketers must engage in
environmental scanning and analysis
most marketers operate in a competitive environment of
oligopoly or monopolistic competition
which of the following is a characteristic of pure competition
large number of sellers
which of the following is a characteristic of the prosperity stage of the business cycle
total income is relatively high
The amount of money left after payment of taxes that is used by individuals for spending on purchase of basic necessities and savings is referred to as ________
disposable income