Chapter 2

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University of Toronto Scarborough
Management (MGM)
Ingrid L.Stefanovic

Wednesday, September-16-09 Principles of Marketing Chapter 2 INTRODUCTION Organizations operate in an environment that is constantly shifting and changing ENVIRONMENTAL SCANNING Environmental Scanning is the process by which the marketing manager gathers and sorts information about the marketing environment Information can be gathered periodically or continuously and they usually come from informal or formal sources Information must be analyzed and acted upon If issues rise that affects an industry as a whole, all the industry players will act in cohesion to correct the problem. o Example: All car manufacturers adopting the policy to have air bags THE COMPETITIVE ENVRIONMENT Competitive Environment is the interactive process that occurs in the marketplace in which different organizations seek to satisfy similar markets Marketing decisions by an individual firm affect consumers and competitors Supermarkets are very sensitive to fluctuations in sales caused by the actions of competitors as the competition is fierce in that market o If one competitor advertises a sale in price, the other competitors are inclined to advertise the same price Types of Competition Three types of competition Most direct form is inter-product or direct competition o Marketers that have similar products Second type is product-substitute or indirect competition o Among products that can be substituted for one another Final type is alternative-gratification o Involves all organizations that compete for consumers purchases Changes in competitive environment can wipe out a product or entire business o Therefore, marketers must assess the marketing strategies of competitors New product offerings with technological advances, price reductions must be monitored in order to adjust the firms marketing program in light of changes THE TECHNOLOIGCAL ENVRIONMENT Technological Environment consists of the applications of knowledge based on scientific discoveries, inventions and innovations o Technology is reshaping the face of marketing Service design is changing due to technology also o Example: Ebay, Amazon Technology also helps firms keep detailed records and to access records in useful way Also it has helped inventory management by reducing the level of inventory necessary
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