MKT Chapter 3 Notes

Environmental Scanning
Examining and Responding to the Marketing Environment:

The process of collecting information about forces in the marketing environment.

Environmental Analysis
Examining and Responding to the Marketing Environment:

The process of assessing and interpreting the information gathered through environmental scanning (how you deal with the information collected during scanning).

Passive; Proactive
Examining and Responding to the Marketing Environment:

Responding to Environmental Forces:

Marketers take two approaches to environmental forces:

_____: Accepting them as uncontrollable.
_____: Attempting to influence and shape them.

No best way to react.
Depends on the organization, management, and the situation.

Brand Competitors
Competitive Forces:

_____ _____: Firms that market products with similar features and benefits to the same customers at similar prices.

Product Competitors
Competitive Forces:

_____ _____: Firms that compete in the same product class but market products with different features, benefits, and prices.

Generic Competitors
Competitive Forces:

_____ _____: Firms that provide very different products that solve the dame problem or satisfy the same basic customer need.

Total Budget Competitors
Competitive Forces:

_____ _____ _____: Firms that compete for the limited financial resources of the same customers.

Monopoly
Competitive Forces:

Types of Competitive Structure:

_____: when an organization offers a product that has no close substitute, making it the sole source of supply.
Ex. Fort Collins (Colorado) water utilities.

Oligopoly
Competitive Forces:

Types of Competitive Structure:

_____: when few sellers control the supply of a large proportion of a product.
EX. GM (automobiles)

Monopolistic Competition
Competitive Forces:

Types of Competitive Structure:

_____ _____: When an organization with many competitors develops a marketing strategy to differentiate its product.
Ex. Levi Strauss (Jeans)

Pure Competition
Competitive Forces:

Types of Competitive Structure:

_____ _____: Involves a large number of sellers, no one of which influences price or supply.
Ex. Vegetable Farm (sweet corn)

Monitoring Competition
Competitive Forces:

_____ _____:
Helps determine competitors’ strategies and their effects on firm’s own strategies.
Guides development of competitive advantage and adjusting firm’s strategy.
Provides ongoing information about competitors.
Assists in maintaining a marketing orientation.

The Business Cycle
Economic Forces:

1) Economic Conditions:
_____ _____ _____: a pattern of economic fluctuations that has four stages.

Prosperity
Economic Forces:

1) Economic Conditions:
The Business Cycle:
_____: Unemployment is low and total income is relatively high.

Recession
Economic Forces:

1) Economic Conditions:
The Business Cycle:
_____: Unemployment rises and total buying power declines.

Depression
Economic Forces:

1) Economic Conditions:
The Business Cycle:
_____: Unemployment is very high, wages re very low, total disposable income is at a minimum and consumers lac confidence in the economy.

Recovery
Economic Forces:

1) Economic Conditions:
The Business Cycle:
_____: The economy moves from depression or recession to prosperity.

Buying Power
Economic Forces:

2) Buying Power and Income:

_____ _____: Resources such as money, goods, and services, that can be traded in an exchange.

Income
Economic Forces:

2) Buying Power and Income:

_____: the amount of money received through wages, rents, investments, pensions and subsidy payments.

Disposable Income
Economic Forces:

2) Buying Power and Income:
Income:
_____ _____: after-tax income.

Discretionary Income
Economic Forces:

2) Buying Power and Income:
Income:
_____ _____: disposable income available for spending and saving after an individual has purchased the basic necessities.

Credit
Economic Forces:

2) Buying Power and Income:

_____: 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
Economic Forces:

2) Buying Power and Income:

_____: the accumulation of past income, natural resources and financial resources (e.g. cash, securities, real estate).

Wealth and Willingness to Spend
Economic Forces:

3) _____ ______ ______ _____ _____: An inclination to buy because of expected satisfaction from a product, influenced by the ability to buy and the numerous psychological and social forces.

Legislation; Decisions; Regulatory
Political Forces:

1) Enactment of _____.
2) Legal _____ interpreted by courts through civil and criminal cases.
3) Influence of _____ agencies.

Conditions; Contributions; Lobbying
Political Forces:

Marketers:
Adjust to _____.
Influence the process through _____ and _____.

Precompetitive
Legal and Regulatory Forces:

1) _____ Legislation: refers to laws designed to preserve competition.

Consumer Protection
Legal and Regulatory Forces:

2) _____ _____ Legislation: federal and state laws.

Protects people from harm.
Prohibits hazardous products.
Requires information disclosure.
Aimed at particular marketing activities.

Compliance
Legal and Regulatory Forces:

3) Encouraging _____ with Laws:

Current trend is away from legally-based organizational compliance programs. – Emphasis on providing incentives to create ethical and responsible corporate cultures.

Regulatory agencies monitor marketing activities and may enforce some laws.

Federal Trade Commission (FTC)
Legal and Regulatory Forces:

4) Regulatory Agencies:

_____ _____ _____: most heavily influences marketing activities (of all regulatory units).

Large portion of its resources spent on curbing inappropriate behavior: False advertising, misleading pricing, deceptive packaging and labeling.

Better Business Bureau; National Advertising Review Board
Legal and Regulatory Forces:

5) Self-Regulatory Forces:

Some businesses choose to self-regulate.
Often use the help of organizations like:
_____ _____ _____ and _____ _____ _____ _____.

Less; More
Legal and Regulatory Forces:

5) Self-Regulatory Forces:

Advantages:
_____ expensive.
_____ realistic.

Nonmember; Lack; Less
Legal and Regulatory Forces:

5) Self-Regulatory Forces:

Disadvantages:
_____ firms do not have to abide.
_____ of enforcement tools.
Often _____ strict.

Technology
Technological Forces:

_____: the application of knowledge and tools to solve problems and perform tasks more efficiently.

Rapid
Technological Forces:

Impacts of Technology:
1) _____ technological growth and change are expected to continue.

Dynamic change, ability to reach customers, self-sustaining technology; spurs more development.

Changed
Technological Forces:

Impacts of Technology:
2) Mobile devices and consumers’ increasing use of the Internet have _____:

How people communicate. How marketers reach consumers.

Productivity
Technological Forces:

Impacts of Technology:
3) Technology can improve _____.

Expanding
Technological Forces:

Impacts of Technology:
4) _____ opportunities for e-commerce.

Privacy; Issues
Technological Forces:

Impacts of Technology:
5) Negative impacts of technology include:

Concerns over _____.
Intellectual property protection _____.

Status; Technological Assessment
Technological Forces:

Adoption and Use of Technology:

Firms must keep up with technology to maintain their _____ as market leaders. – Must ensure that their technology is not easily copied.

Use a _____ _____ to learn about and attempt to foresee the effects of new products and processes.

Sociocultural
_____ Forces: the influence in a society and its culture(s) that bring about changes in people’s attitudes, beliefs, norms, customs, and lifestyles.
Products
Sociocultural Forces:

Determine what, wehre, how, and when people buy _____.

Demographic and Diversity Characteristics
Sociocultural Forces:

_____ _____ _____ _____:

Changes in a population’s demographic characteristic lead to changes in how people live and consume products.

A more diverse consumer base means marketing practices must be modified and diversified to meet changing needs.

Cultural Values
Sociocultural Forces:

_____ _____:

Changes in _____ _____ alter people’s needs and desires for products.
Health, nutrition, and exercise growing in importance.
Definitions of family are changing.

Consumerism
Sociocultural Forces:

_____

The Organized efforts of individuals, groups, and organizations to protect the rights of consumers.
Lobbying government officials and agencies.
Letter-writing campaigns and boycotts.

Kennedy’s Consumer “Bill of Rights”

Safety; Be Informed; Choose; Be Heard
Sociocultural Forces:

Kennedy’s Consumer “Bill of Rights”

Right to _____.
Right to _____ _____.
Right to _____.
Right to _____ _____.

Brand
Coca-Cola Classic, Pepsi Cola and Dr. Pepper are examples of _____ competitors.
Oligopoly
What competitive structure exists in the automobile industry?
Depression
A prolonged recession will lead to a _____.
Development
The self-sustaining nature of technology relates to the fact that technology acts as a catalyst to spur even faster development.
Sociocultural
Which factor is the most difficult external variable to forecast, influence or integrate into market planning.
A) Environmental Scanning and Analysis
To monitor changes in the marketing environment effectively, marketers must engage in
A) Environmental scanning and analysis.
B) Economic scanning.
C) Self-regulatory analysis.
D) Marketing research analysis.
E) Information collecting.
B) Oligopoly or Monopolistic Competition
Most marketers operate in a competitive environment of either
A) oligopoly or monopoly.
B) oligopoly or monopolistic competition.
C) oligopoly or pure competition.
D) monopoly or pure competition.
E) pure competition or monopolistic competition.