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Lecture 3

ADMS 2200 Lecture Notes - Lecture 3: Tim Hortons, Marketing Ethics, TooniePremium


Department
Administrative Studies
Course Code
ADMS 2200
Professor
Kim Snow
Lecture
3

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Chapter 3: The Marketing Environment, Ethics and Social Responsibility
Environmental Scanning Collecting external marketing environment information to
identify and interpret potential trends trends may represent significant opportunities
or threats to the company
Environmental Management Attainment of organizational objectives by predicting and
influencing the competitive, political-legal, economic, technological, and social-cultural
environments
Strategic Alliance Partnership in which two or more companies combine resources and
capital to create competitive advantages in a new market
Elements of the Marketing Mix within an Environmental Framework
1) Competitive Environment
Interactive process that occurs in the marketplace among:
Directly competitive products
Substitute product
Competing for the consumer’s purchasing power
Marketing decisions by individual firm’s influence
Consumer responses in the market place
Marketing strategies of competitors
Few organizations have monopoly positions
Monopoly Market structure in which a single seller dominates trade
in a good or service for which buyers can find no close substitutes
Some pharmaceutical firms have temporary monopolies provided by
patents on drugs
Oligopoly Few number of sellers in an industry with high start-up costs that
keep out new competitors
Type of competition
Direct Among marketer of similar products (Bell, Rogers, Fido and
Telus)
Indirect Involves products that are easily substituted (Pizza, tacos,
burgers, and wings)
Competition among all firms that compete for consumers’ purchases
(All firms compete for a limited number of dollars that consumers can
or will spend ex: customer who has a toonie and wants a treat may
choose between Tim Hortons coffee and a chocolate bar)
Developing a Competitive Strategy (methods through which a firm deals with
its competitive environment)
Should we compete? It depends on firm ‘s resource, objectives,
and expected profit potential
In what markets, should we compete? Allocate firm’s limited
resources to the areas of greatest opportunity
How should we compete? includes product, promotion,
distribution, and pricing decisions that maximize competitive
advantage
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Time-based competition Strategy of developing and distributing
goods more quickly than competitors
Develop competitor analysis: Competitor Chart + Position Map
Competitor Chart
Target
Market
Product
Price
Distribution
Promotion
Competitor 1
Competitor 2
Position map: What are the important facts/variables in a certain
industry
When you enter the industry as an entrepreneur, you want to enter the place on the
position map where your strong competitors are not there then choose the direction to take
over or to compete with them
2) Political Legal Environment Consists of laws and their interpretations that require
firms to operate under competitive conditions and to protect consumer rights
Ignore or non-compliance can result in fines, negative publicity, and civil damage
suits
Competition Act Comprehensive legislation administered by Industry
Canada and designed to help both consumers and businesses by promoting a
healthy competitive environment
Laws roughly categorized in three marketing areas: Pricing + Promotion +
Distribution
Provincial laws generally focused on protection of buyers and sellers with
respect to direct sales contracts
Commonly referred to as Consumer Protection Act or Direct Seller’s
Act
Canadian Radio television and Telecommunications Commission
(CRTC) regulates and supervises all aspects of the Canadian
broadcasting system
National Energy Board regulates the construction and operation of
interprovincial and international pipelines and power lines
Consumers interest organization (People for the Ethical Treatment of
Animals)
Other groups attempt to advance the rights of minorities, senior citizens, and
other causes (Mothers Against Drunk Driving)
Self- regulatory groups set guidelines for responsible business conduct
(Advertising Standards Canada)
3) Economic Environment
Gross Domestic Product (GDP) Sum of all goods and services produced by a
nation in a year
Economic Environment Factors that influence consumer buying power and
marketing strategies
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