Chapter 2: The Marketing Environment, Social Responsibilities, and Ethics

Question 1

Define Target Market

Answer 1

Target Markets are defined groups of potential customers that marketers feel is most likely to buy their company’s product over other company’s. Over time, marketers alter the marketing mix to keep those specific target markets

• As markets mature, new customers become part of the target markets, and others drop out. Must always know your target markets and customize to them

Question 2

Define External Environment

Answer 2

The external environment evaluates environmental information. Companies perform a process called environmental scanning. The factors within the environment that are important to scan are next

Question 3

Define Competitive Factors as an (environment factor)

Answer 3

The competitive environment encompasses the competitors a company must face, the realize size of their competitors, etc (price, quality)

• Know your company’s strengths and weaknesses vs competitors

Question 4

Define Regulatory Factor as an (environment factor)

Answer 4

Marketers need thorough understanding of the laws and rules established by various levels of government and agencies. Company’s MUST follow these

• Can be different wherever you are (liquor laws, etc)
• Provincial, Federal, etc

Question 5

Define Consumer Incomes/Median Total Family Income as an (economic factor)

Answer 5

Depending on the area your company is based out of, incomes are different, so you must customize to their income.

• Cant sell high end products in a low income area (vice versa)

Question 6

Define Purchasing Power as an (economic factor)

Answer 6

Income in comparison to cost of living

Question 7

Define Cost of Living

Answer 7

The average cost to live in that specific area (community, city, town, etc)

• Ex. Toronto being very high

Question 8

Define Discretionary Income as an (economic factor)

Answer 8

Important to identify the consumer’s ability to spend and the ability to purchase higher priced goods and services

Question 9

Define Inflation

Answer 9

A general decrease in the value of money (expressed as a percentage, measured per year)

Question 10

Define Recession

Answer 10

A period of economic activity characterized by negative growth. Occurs when the Gross Domestic Product (GDP) falls

• Switch to lower cost brands
• Focus more on basic needs

Question 11

Social Factors

Answer 11

These factors influence what we buy, the prices we pay, the effectiveness of promotions, where we buy, how we buy, and when we buy

Question 12

Define Value as a (social factor)

Answer 12

A strong held belief. These can be formed through interactions like family, friends, influential people

Question 13

Define Component Lifestyles as a (social factor)

Answer 13

Lifestyle being the way we live; the way we decide to live our lives

Question 14

Define Family as a (social factor)

Answer 14

Huge influence on everything

• DIVERSE

Question 15

Demographic Factors

Answer 15

Each generation, and demographic have their own tastes, biases. Tailoring products to what customers value is KEY to sales

Question 16

Generation Z

Answer 16

1995-2009 (very important generation). They are easy targets, easy to persuade, heavy users of social media and technology.

• Hard to influence with traditional marketing styles

Question 17

Generation Y (Millennial’s)

Answer 17

1979-2000. Because the baby boomers in Canada are working well into retirement, this age group lacks job opportunities

• Unstable unemployment (struggling)

Question 18

Generation X

Answer 18

1966-1978. Usually the “forgotten generation”.

Question 19

Baby Boomers

Answer 19

1947-1965 (post WWII). They are active and affluent. Some have been hurt by the recession and are worrying about money so they work longer, but some of the younger baby boomers are doing very well and can support their children into career paths

Question 20

Define Ethnic and Cultural Diversity (Multiculturalism)

Answer 20

DIVERSITY! In Marketing, marketers must adapt, promote, and accommodate to different cultures (foods, clothes, etc)

Question 21

Define Applied Research

Answer 21

The attempt to improve and/or develop products with new innovations (new technology, etc) to make them better. Applying new innovative thought, operating more efficiently

• Brings the older products cheaper
• Ex. New IPhone

Question 22

Define Corporate Social Responsibility (CSR)

Answer 22

The cost of doing business today (caring the the planet, caring for people, profitability)

Question 23

Define Green Marketing

Answer 23

The development and marketing of products designed to minimize negative effects on the environment . This tends to be more expensive (so target to high income communities)

• Organic Foods, Recycling, etc

Question 24

Define Ethical Behaviour in a Business

Answer 24

Manners and rules you must follow that are ethically “right” and appropriate. Can be illegal or legal (but just rude)

• Ex. race, religion

Question 25

Define Ethics

Answer 25

Standard behaviour by which conduct is judged. The moral principles and values.

Question 26

Define Laws

Answer 26

Are the values and standards enforced by courts

Question 27

Define Morals

Answer 27

Rules developed as a result of cultural norms and values

Question 28

Define Morality and Business Ethics

Answer 28

The values you use to make decisions in businesses that have been acquired since birth, through family, etc

Question 29

Define the Code of Ethics in a business

Answer 29

A guideline to help marketing managers and other make better decisions

Question 30

What is the Advantage of the Code of Ethics

Answer 30

To help employees identify the business practices their company recognizes as being acceptable

Question 31

What is the Canadian Marketing Association’s of Code of Ethics and Standards of Practice

Answer 31

It is designed to establish and maintain standards for the conduct of marketing