Chapter 3 - Environment, Ethics, Social Responsibility

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York University
Administrative Studies
ADMS 2200
Richard Patterson

Chapter Three Notes Overview 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 consideration. Environmental scanning 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 industry. Three types of competition 1. Direct 2. Indirect 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 than competitors. 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 things. 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
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