Textbook Notes (367,988)
Canada (161,542)
Commerce (1,690)
Chapter 3

Chapter 3 Textbook Notes.docx

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Stephen Charko

Chapter 3: The Marketing Environment, Ethics, and Social Responsibility The Five Components of Marketing… • Political-Legal • Economic • Social-Cultural • Technological • Environmental Environmental Scanning and Environmental Management… • Environmental Scanning: process of collecting information about the external marketing environment to identify and interpret potential trends o Analyze the trends and decide if they represent significant opportunities or pose major threats • Environmental Management: attainment of organizational objectives by predicting and influencing the competitive, political-legal, economic, technological, and social-cultural environments • Strategic Alliances: partnership in which two or more companies combine resources and capital to create competitive advantages in a new market The Competitive Environment… • Competitive Environment: 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 consumer's purchasing power o As a result, decision makers must constantly monitor competitors activities • Monopoly: market structure in which a single seller dominates trade in a good or service for which buyers can find no close substitutes o Corporations prefer to share the market with just a few rivals • Oligopoly: market structure in which relatively few sellers compete and where high start-up costs form barriers to keep out new competitors • Three types of competition: o Direct • Marketers of similar products  Gas stations, cell phone providers o Indirect • Marketers of products that are easily substituted Fast food, entertainment, tourist industries  o Total • Competition among all organizations that compete for consumer's purchases  Car sale may compete with a vacation • Competitive Strategy: methods through which a firm deals with its competitive environment 1. Should we compete? 1. In what market should we compete? 1. How should we compete? • Time-Based Competition: strategy of developing and distributing goods and services more quickly than competitors The Political-Legal Environment… • Political-Legal Environment: component of the marketing environment consisting of laws and interpretations of laws that require firms to operate under competitive conditions and to protect consumer rights o Ignorance of this environment could result in fines, negative publicity, and/or expensive civil damage suits • The Competition Act: the most comprehensive legislation in Canada, designed to help both consumers and business by promoting a healthy competitive environment o Regulations can be categorized by: • Pricing  Price fixing  Big rigging  Price discrimination  Predatory pricing  Double ticketing  Resale price maintenance • Promotion  Misleading advertising  Referral selling  Bait-and-switch selling • Distribution  Refusal to deal  Exclusive dealing Pyramid selling  The 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, including stage of the busine
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