Transcript Foundations of Marketing - Eurasia International University
of
M A R K E T I N G
The Environment for Marketing Decisions
Chapter 2 Copyright © 2003 by Nelson, a division of Thomson Canada Limited.
The Environment for Marketing Decisions Chapter 2
Objectives 2-1
1 . Identify the environmental factors that affect marketing decisions.
2. Identify three categories of competition faced by marketers, and outline the issues to consider in developing a competitive strategy.
3. Illustrate the association between marketing plans and the technological environment.
4. Demonstrate how the sociocultural environment influences marketing decisions.
5. Show how the economic environment has a bearing on marketing planning.
6. Explain the major legislative framework that regulates marketing activities.
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The Environment for Marketing Decisions Chapter 2
Environmental Planning
• Process by which the marketing manager gathers and sorts information about the marketing environment.
2-2
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The Environment for Marketing Decisions Chapter 2
Figure 2.1
Components of the Marketing Environment
Sociocultural environment Economic Conditions
The Marketing Plan
Competition Political-legal climate
Customers
Technology
2-3
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The Environment for Marketing Decisions Chapter 2
Competitive Environment
• The interactive process that occurs in the marketplace in which different organizations seek to satisfy similar markets.
2-4
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The Environment for Marketing Decisions Chapter 2
Types of Competition
• Inter-product or direct • Product-substitute or indirect • Alternative-gratification
2-5
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The Environment for Marketing Decisions Chapter 2
Technological Environment
• The applications of knowledge based on scientific discoveries, inventions, and innovations.
2-6
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The Environment for Marketing Decisions Chapter 2
Key Factors of the Technological Environment
• Computer technology • Internet
2-7
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The Environment for Marketing Decisions Chapter 2
Sociocultural Environment
• The mosaic of societal and cultural components that are relevant to the organization’s business decisions.
2-8
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The Environment for Marketing Decisions Chapter 2
Key Factors of the Sociocultural Environment
• General readiness of society to accept a marketing idea • Trust and confidence in business • Mixed society • Towns and rural communities • Gender • Consumerism
2-9
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The Environment for Marketing Decisions Chapter 2
Economic Environment
• 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.
2-10
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The Environment for Marketing Decisions Chapter 2
Stages of the Business Cycle
• Recession • Depression • Recovery • Prosperity
2-11
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The Environment for Marketing Decisions Chapter 2
Inflation and Stagflation
Inflation
• Rising price level resulting in reduced purchasing power for the consumer.
2-12
Stagflation
• High unemployment and a rising price level at the same time.
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The Environment for Marketing Decisions Chapter 2
Fiscal and Monetary Policy
Fiscal Policy
• Receipts and expenditures of government.
2-13
Monetary Policy
• Manipulation of the money supply and market rates of interest.
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The Environment for Marketing Decisions Chapter 2
Demarketing
• The process of cutting consumer demand for a product, because the demand exceeds the level that can reasonably be supplied by the firm or because doing so will create a more favourable corporate image.
2-14
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The Environment for Marketing Decisions Chapter 2
Political - Legal Environment
• The laws and interpretation of laws that require firms to operate under competitive conditions and to protect consumer rights.
2-15
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The Environment for Marketing Decisions Chapter
Key Factors in Political - Legal Environment
• Free-enterprise society • Competition Act 2
2-16
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The Environment for Marketing Decisions Chapter 2
The Competition Act prohibits:
• Combinations that lessen competition.
• Mergers or monopolies detrimental to the public.
• Deceptive trade practices.
2-17
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