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Chapter 2

MGMA01H3 Chapter Notes - Chapter 2: Business Cycle

5 Pages
105 Views
Winter 2011

Department
Management (MGM)
Course Code
MGMA01H3
Professor
Ingrid L.Stefanovic
Chapter
2

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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.
oExample: 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
oIf 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
oMarketers that have similar products
Second type is product-substitute or indirect competition
oAmong products that can be substituted for one another
Final type is alternative-gratification
oInvolves all organizations that compete for consumer’s purchases
Changes in competitive environment can wipe out a product or entire business
oTherefore, 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
oTechnology is reshaping the face of marketing
Service design is changing due to technology also
oExample: 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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Wednesday, September-16-09 Principles of Marketing Chapter 2
THE SOCIOCULTURAL ENVIRONMENT
There is an importance of understanding and assessing the relevant social and cultural
components when making marketing decisions
Sociocultural Environment is the mosaic of societal and cultural components that are
relevant to the organizations business decisions
oOne important category is the general readiness of society to accept a marketing
idea
oAnother important category involves the trust and confidence of the public in
business as a whole
All institutions have lost public confidence to some degree; even government and labour
unions
No marketer can initiate a strategy without taking the social context into account
Manager of Public Policy Research is someone who studies the changing social
environments future impact on the company
Firms must develop new ways of revaluating its performance if it attuned to its societal
environment
Marketers must recognize societal difference among countries, and assume that a
homogenous social environment exists at home.
oHowever, Canada is a mixed society composed of varied submarkets
Gender is another increasingly important social factor
Since variables change constantly, marketers must continually evaluate this dynamic
environment
One of the most serious – and avoidable – of all marketing mistakes is failing to
appreciate social difference within our own domestic market
Rise of consumerism can be traced to the growing public concern with making business
more responsible
THE ECONOMIC ENVIRONMENT
Economic Environment is the factors in a region or country that affect the production,
distribution, and consumption of its wealth. Key elements are monetary resources,
inflation, employment, and productive capacity
Stages of the Business Cycle
Four Stages
oRecession
oDepression
oRecovery
oProsperity
Marketers must be aware of the economys relative position in the business cycle and how
it will affect the position of the particular firm
During prosperous times, consumers willing to buy more
During recession, personal savings climbed to very high levels, and cut back expenditures
More aggressive marketing may be called for periods of lessened buying interest
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Description
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 www.notesolution.com
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