Marketing Fundamentals Quiz 3

Uncontrollable Environments

Social, economic, technological, competitive, regulatory

Changes in these forces have huge impacts on marketing strategy

Environmental scanning

The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends

External data

“What trends might affect marketing in the future?”

How: Study data, do your own survey

What: Demographic and culture changes

Social forces demographics - generational cohorts

Baby boomers - 1946 to 1964

Generation X - 1965 to 1980

Generation Y (Millennials) - 1983 to 1996

Generation Z - 1997 to 2010

Demographics

Describes a population according to selected characteristics such as age, gender, ethnicity, income and occupation

Social Forces

Demographic shifts, cultural changes

Baby Boomers

Include the generation of 76 million children born between 1946 and 1964

Social Forces - culture

Values, ideas, and attitudes shared by members of a group

E.g. Attitudes and roles, gender stereotypes, fashion, careers, sports

E.g. Geek squad chases culture and tech support

Economy

Income, expenditures, resources that affect costs of running business & households

Macroeconomics

Performance of the economy

Inflation: Production costs and prices increase

Recession: Periods of declining economic activity

Microeconomics

Ability of consumers to buy goods and services

Gross Income

The total amount of money made in one year by a person, household, or family unit.

AKA money income at the Census Bureau

Disposable Income

The money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation

AFTER tax

Discretionary Income

The money that remains after paying for taxes and necessities

AFTER tax AFTER necessities

Technology

Consists of the inventions or innovations from applied science or engineering research

Marketspace

An information and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings

"A digital platform where people and businesses share information and do transactions using advanced computers, telecom systems, and online tools

Electronic Commerce

Any activity that uses electronic communication in the inventory, promotion, distribution, purchase, and exchange of products and services

AKA e-commerce

Internet of Things (IoT)

The network of products embedded with connectivity-enabled electronics

Competition

Consists of the alternative firms that could provide a product to satisfy a specific market’s needs

Pure Competition

Many sellers with similar products

Department of Labor - how people generally spend their money

13% on food

33% on housing

3% on clothes

24% on transportation and healthcare

Rest is discretionary

Monopolistic competition

Many sellers with substitutable products in a price range

E.g. Coffee vs. Tea

E.g. Cereal Isle coupons

Oligopoly

Few sellers’ control majority of sales

Where most frauds come from - manipulate the market to go a certain way - bosses work with other bosses

E.g. T-Mobile vs. AT&T, Autobody shops

Pure Monopoly

One seller

E.g. utilities

Regulation

Consists of the restrictions state and federal laws place on business with regard to the conduct of its activities

Protecting Competition

Sherman Antitrust Act 1890

Clayton Act 1914

Robinson-Patman Act 1936

Ethics

The moral principles and values that govern the actions and decisions of an individual or group

Culture influencing ethical marketing behavior

Serves as a socializing force that dictates what is right and just

Moral standards are relative to particular societies

These standards often reflect laws and regulations

E.g. Some countries would say counterfeiting is good business

Business cultures’ quote

“Compromise the effective rules of the game”

Caveat Emptor

The legal concept of “let the buyer beware” that was pervasive in the American business culture prior to the 1960s

Situational ethics

I see my peers doing something wrong, but there’s no consequences, therefore I will follow them.

Peer pressure does not excuse you for ethical failures

Consumer Bill of Rights

An outline presented by President John F. Kennedy in 1962 that codified the ethics of exchange between buyers and sellers, including the rights to safety, to be informed, to choose, and to be heard.

Two kinds of unethical behavior in competition

1. Economic espionage

2. Corruption

Economic Espionage

The clandestine collection of trade secrets or proprietary information about a company’s competitors

The idea of stealing trade secrets from other companies

Carries criminal penalties

More than half of world’s largest firms have uncovered espionage, costing them $445 billion annually in lost sales

E.g. Bribery - most evident in developing countries

Whistle Blower

Employees who report unethical or illegal actions of their employers

“Is it my place or not?”

Corporate Culture

Set of values, ideas, and attitudes shared among members of an organization

Green Marketing

Consists of marketing efforts to product, promote, and reclaim environmentally sensitive products

“Save the environment”

Cause Marketing

Occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products

Correlated to green marketing, but mutually exclusive

Federal Trade Commission

Investigating potential monopolies