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Lecture 3

MKT 220 Lecture 3: The Marketing Environment- Chapter 3


Department
Marketing
Course Code
MKT 220
Professor
Gardner
Lecture
3

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External forces that directly or indirectly effect an organization
1. Competitive
2. Economic
3. Political
4. Legal and regulatory
5. Technology
6. Sociocultural/backgrounds
Environmental scanning- the process of collecting information about forces in marketing environment
Observation- watching the news
Secondary sources- organizations whose jobs it is to collect this info- most expensive but the best
Market research- gather info, talk with consumers
Environmental analysis- process of assessing and interpreting the information gathered through
environmental scanning accuracy, consistency, and significance
Responding to Environmental Forces
Reactive approach- dealing w things at the last minute- change as things happen
Proactive approach- planning in advance- attempt to shape and influence environment
Overcome market challenges and take advantage of opportunities
Types of Competition
1. Competition- other organization that market products that are similar to or can be substitueed for
yours in the same geographical area
2. Brand competitors- firsm that market products with similar features and benefits to same
customers at similar prices
3. Product competitors- provide products in same product class but market products with different
features, benefits and prices
4. Generic competitor- provide very different produts that solve the same problem same function
but completely different
5. Total budget competitor- firms that compete for the limited financial resources of same
customers; anything else that the money can be spent on
Tennis shoes- Nike
Brand competitor- Adidas, Reebok, New Balance
Product competitor- Vans, Chucks (still a tennis shoe, but different purpose)
Generic competitor- high heels, flip flops
Total budget competitor- movies, buying food
Soft Drink- Coke
Brand- Pepsi
Product- Sprite
Generic- milk
Total budget- shoes, movies etc.
Type
# of competitors
Ease of entry
Product
Example
Monopoly
One
Many barriers
Almost no subs
Water company, cable
Oligopoly
Few
Some barriers
Homogeneous or
differentiated
Service providers and airlines
Monopolistic competition
Many
Few
Product
differentiation with
many subs
Jeans- have to make product
different somehow
Pure competition
Unlimited
No barriers
Homogenous
Farmers market
Most products that we buy are monopolistic competition
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