Chapter Three Notes
Adapting to change in environment is as complex and unpredictable as the world’s energy usage and is
perhaps the supreme challenge.’
Marketers must anticipate and plan for change. They must set goals to meet the concerns of customers,
employees, stakeholders, and members of the general public.
Although external forces frequently are outside the marketer’s control, decision makers must still
consider those influences together with the variables of the marketing mix in developing and
occasionally modifying marketing plans and strategies that take these environmental factors into
Environmental scanning is the process of collecting information about the external marketing
environment to identify and interpret potential trends. The goal of this process is to analyse the
information and decide whether these trends represent significant opportunities or pose major threats
to the company.
Environmental management involves attainment of organizational objectives by predicting and
influencing the competitive, political, legal, economic, technological and social-cultural environments.
Strategic alliance is a partnership in which two or more companies combine resources and capital to
create competitive advantages in a new market. Competitive environment is an interactive process that occurs in the marketplace among marketers of
directly competitive products, marketers of products that can be substituted for one another, and
marketers competing for the consumers’ purchasing power.
Monopoly is a market structure in which single seller dominated trade in a good or service for which
buyers can find no close substitutes. It is a sole supplier of a good or service.
Oligopoly is a market structure in which relatively few sellers compete and where high start-up costs
from barriers to keep out new competitors. Happens when there is a limited number of sellers in an
Three types of competition
Direct competition is occurs among marketers of similar products, such as when a Petro-Canada station
opens across the street from Esso.
Indirect competition involves products that are easily substituted. In the fast-food industry, pizza is
substituted for taco, hotdog or burgers.
Competitive strategy is methods through which a firm deals with its competitive environment.
Time-based competition is a strategy of developing and distributing goods and services more quickly
Political and legal environment
Political and legal environment are the laws and their interpretations that require firms to operate
under certain competitive conditions and to protect consumer rights.
Competition act is the most comprehensive legislation in Canada, designed to help both consumers and
businesses by promoting a healthy competitive environment.
Laws are categorized in three marketing areas such as price, promotion and distribution.
Provincial and territorial consumer protection legislation in Canada is focused on the rights of buyers
and sellers with respect to direct sales contracts. Happens when a person is invited to a hotel,
convention centre where the intension is to sell a product/service. It is commonly called Consumer
Protection Act or Direct Seller’s Act. Also called cooling-off laws because an important aspect they have
in common is the right of the buyer to reconsider a buying decision that was made under the influence
of a sales person. There are government regulatory agencies such as the national energy board which regulates the
construction and operation of pipelines, power lines, export and import of gas as well as oil and other
Another government regulated agency is CRTC which stands for Canadian radio-television and
telecommunications commission. CRTC has the authority to regulate and supervise all aspects of the
Canadian broadcasting system. Other regulatory forces include
Consumer interest organizations; e.g., People for the Ethical Treatment of Animals