MKT 220 Lecture 3: The Marketing Environment- Chapter 3

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7 Feb 2017

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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.
# of competitors
Ease of entry
Many barriers
Almost no subs
Water company, cable
Some barriers
Homogeneous or
Service providers and airlines
Monopolistic competition
differentiation with
many subs
Jeans- have to make product
different somehow
Pure competition
No barriers
Farmers market
Most products that we buy are monopolistic competition
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