Chapter 3 Flashcards
Mission Statement
a statement of vision of the organization’s
“reason for being”— and that which differentiates the company from its competitors.
Financial resources available
Some objectives are more costly than others. An example of this can be seen in the Kodak company, who planned to reenergize itself for the new age of digital cameras, a project of immense capital expenditure. In order to accomplish this objective, Kodak had to sell or restructure existing business divisions to provide the $300 million to develop and market new products, such as their pocket video camera.
Production infrastructure
Does the organization possess the production capability and talent to pursue a specific objective? Making changes is not only expensive but can be costly in terms of the time investment.
Marketing strengths
What are the competitive advantages the company can rely on, such as possessing a familiar brand (brand loyalty), strong channel relations—i.e. relationships in place with distributors and stores, and/or possessing a professional selling team.
The Economic Environment
refers to macro-economic factors that affect consumer and business spending patterns: GDP, annual per-capita income, inflation rate, interest rates, unemployment rate, wage-growth, mortgage rates, home sales, dollar exchange-rates, U.S. retail sales growth/decline, and so on.
The Competitive environment
is particularly harsh these days due in large part to rapid advances in technology, such as online shopping, the presence of Amazon, Craig’s List, the trend to buy used and recycled goods, etc. Competition has ben growing for decades, as more companies believe they must continue to grow bigger as economies of scale are necessary to survive, and to win in the marketplace, they must have more outlets/more locations in as many markets as possible.
The Technological environment
is one of the fastest changing, making many products and services now obsolete. Does anyone in our class use CD’s, or land-line phones?
Pure competition
exists when there are many sellers of the same product. Due to the commonality of the product and the vast supply, no one seller is able to affect the price of the product; an example of pure competition is the agricultural industry where potatoes, wheat, rice, etc is fairly indistinguishable from producer to producer. Distribution is about the only factor which could differentiate a supplier in this climate.
Monopolistic competition
the most common environment in the U.S. with many sellers of substitutable products within a certain price range. Think of apparel, jewelry, paper/household/personal care products or hotels, restaurants, coffee shops. Which of the four P’s could be used to differentiate a company in this environment? (hint: what is Starbucks able to offer that makes their coffee worth the higher price?)
Oligopoly
exists where only a few companies control the majority of the market’s sales. Wireless phones (Verizon, AT&T, T-Mobile), the airline and entertainment industries.
Monopoly
occurs when only one firm sells the product or service, (i.e. water, electricity); in this environment, government regulation is deemed to be a necessity. Typically, marketing activities play a small role in this environment.
Political-legal environment
affects marketing activities through federal, state and local laws that require companies to operate uniformly under competitive conditions and to protect the rights of consumers.
Culture and social environment
Changes in cultural and social forces can have a very important impact on marketing strategies—as cultural values change, people’s needs and desires for products are dramatically influenced. Marketers must continuously monitor these changes.
