Chapter 3

Question 1

External market environment

Answer 1

1. Economic environment
2. Technological environment
3. Political and legal environment
4. Cultural and social environment

Question 2

3 Business Objectives

Answer 2

1. Engage in specific activities that will perform a socially and economically useful function
2. Develop an organization to carry on the business and implement its strategies
3. Earn enough profit to survive

Question 3

Mission statement

Answer 3

Sets out the organization’s basic purpose for being

Should focus on a few key goals rather than embracing everything

Question 4

Patent

Answer 4

Protects a new idea or process

They get a 20-year monopoly to develop and use its new product, process, or material

Question 5

4 basic kinds of market (competitive) situations

Answer 5

Pure competition

Oligopoly

Monopolistic competition

Monopoly

Question 6

competitor analysis

Answer 6

an organized approach for evaluating strengths and weaknesses of current or potential competitor’s marketing strategies

initial step: identify potential competitors

Question 7

competitive rivals

Answer 7

firms that will be the closest competitors

*could be currently serving similar needs with a different type of product

Question 8

competitive barriers

Answer 8

The conditions that make it difficult, or even impossible, for a firm to compete in a market

Question 9

Economic and technological environment

Answer 9

Affects the way firms - and the whole economy - uses resources

Technical skills and equipment affect the way companies convert an economy’s resources into output

The economic environment is affected by the way all of the parts of a macro-economic system interact

Question 10

Interest rates usually __________ during periods of inflation

Answer 10

increase

Question 11

Exchange rate

Answer 11

How much one country’s money is worth in another country’s money

Have an important efect on international trade

*When the dollar is strong, it’s worth more in foreign countries. Makes U.S. products more expensive overseas and foreign products cheaper in the U.S.

Question 12

Technology

Answer 12

The application of science to convert an economy’s resources to output

Affects marketing in 2 basic ways:

1. opportunities for new products
2. for new processes

Question 13

Nationalism

Answer 13

An emphasis on a country’s interests before everything else

affect how macro-marketing systems work

Question 14

North American Free Trade Agreement (NAFTA)

Answer 14

Lays out a plan to reshape the rules of trade amont the U.S., Canada, And Mexico

Establishes a forum for resolving future trade disputes

Question 15

Legal environment

Answer 15

Sets the basic rules for how a business can operate in society

May severely limit some choices, but changes in laws and how they are interpreted also create new opportunities

Question 16

culture and social environment

Answer 16

Affects how and why people live and behave as they do

Question 17

Gross domestic product (GDP)

Answer 17

The total market value of all goods and services provided in a country’s economy in a year by both residents and nonresidents of that country

Question 18

Gross national Income (GNI)

Answer 18

A measure that does not include income earned by foreigners ho own resources in that nation

GDP does include foreign income

Question 19

Marketers are more interested in the size of _________________ than in the number of people within political boundaries

Answer 19

homogeneous marketing areas

Question 20

Metropolitan Statistical Area (MSA)

Answer 20

An integrated economic and social unit with a large population nucleus

Generally, centers on one city or urbanized area of 50,000 or more inhabitants and includes bordering urban areas

Question 21

Quantitative product-market screening data

Answer 21

Sales

Profit

Return on investment (ROI)

Question 22

Qualitative market screening data

Answer 22

Summarize what kinds of businesses the firm wants to be in

What businesses it wants to exclude

What weaknesses it should aoid

What resources (strengths) and trends it should build on

Question 23

Ecomagination

Answer 23

Applying GE’s creativity to solve problems related to ecology

Question 24

Sustainability

Answer 24

The idea that it’s important to meet present needs without compromising the ability of future generations to meet their own needs

Many organizations now screen opportunites on sustainability

Question 25

Strategic business unit (SBU)

Answer 25

An organizational unit (within a larger company) that focuses on some product-markets and is treated as a seperate profit center

A company formally acknowledges its very different activities

Question 26

Some SBUs might be milked =>

Answer 26

that is, used to generate cash for the business with more potential

Question 27

Industrial products tend to be:

Answer 27

insensitive

Question 28

Basic commodity-type consumer products tend to be:

Answer 28

in the middle of the continum of environmental sensitivity

Question 29

Consumer products that are linked to cultural variables tend to be:

Answer 29

sensitive on the continum of environmental sensitivity

Question 30

Senior citizen group

Answer 30

People over 65

Willl increase by 15 percent during this decade

2010-20202 a whopping increase of 35.8% is expected

Question 31

Baby boomers

Answer 31

Produced over 1/4 of the piopulation

Now beginnig retirement

Question 32

Generation X

Answer 32

Born after the baby boomers

Question 33

Generation Y

Answer 33

Millenials