Chapter 3 The Marketing Environment, Ethics and Social Responsibility Flashcards
Define External Audit (environmental scanning)
Focuses on identifying and evaluating trends and events beyond the control of a single firm
Revels key opportunities and threats confronting an orgnizations
Define Environmental Scanning
Collecting external marketing environment information to identify and interpret potential trends
Define Environmental Management
Attainment of organizational objectives by predicting and influencing the competitive, political/legal, economic, technological and social/cultural environments
Define Strategic Alliance
Partnerships in which 2 or more partners combine resources and capital to create a competitive advantage in a new market
Define PESTLE Analysis (PEST Analysis)
Used to track/scan the market environment
Components of the PESTLE Analysis
P for political E for economic S for social T for technological L for legal E for environmental
Define Monopoly and provide an example
Market structure in which a single seller dominates trade in a good or service which buyers can find no close substitutes
Example: Some pharmaceutical firms have temporary monopolies because of patents on drugs (Advil)
Define Oligopoly and provide an example
Few number of sellers in an industry with high start-up costs that keep out new competitors
Example: Auto manufacturers - Ford, GMC, Chrysler
Types of Competition
Direct - Among marketers of similar products - Example: Bell, Rogers, Fido, Telus Indirect - Involves new products that are easily substituted - Example: Pizza, tacos, burgers, wings
Define Competitive Strategy
Methods through which a firm deals with its competitive environment
Define Time Based Competition
Strategy of developing and distributing goods more quickly than competitors
Define the Political/Legal Environment
Consists of laws and their interpretations that require firms to operate under competitive conditions and to protect consumer rights
Define Competition Act
Comprehensive legislation administered by Industry Canada and designed to help both consumers and businesses by promoting a healthy competitive environment
Define Price Fixing (pricing issue)
Sellers collude to set prices higher than they would be in a free market
Define Bid Rigging (pricing issue)
Sellers collude to set prices with respect to one or more bids or quotations
Define Price Discriminations (pricing issue)
A sellers charges different prices for the same quantity and quality to 2 customers who are in competitions with each other
Define Predatory Pricing (pricing issue)
Seller set prices so low they deter competition from entering a market or with the intention to drive marketing
Define Double Ticketing (pricing issue)
An item has been ticketed with 2 prices (the lowest price must prevail although there are limits now to protect sellers)
Define Resale Price Maintenances (pricing issue)
Manufacturers or other channel members try to influence the price at which products are sold to subsequent buyers
Define Misleading Advertising (promotion issue)
Representations, in print or made orally, concerning a product are false or misleading
Define Referral Selling (promotion issue)
Price reductions or other inducements are offered to a customer for the names of other potential customers
Define Bait and Switch Selling (promotion issue)
Sellers attract customers with low prices but then offer another product at a higher price because they are unable to provide the originally promoted item
Define Tied Selling (promotion issue)
A seller requires a buyer to purchase another product or to refrain from purchasing a product from a specific manufacturer as a condition to getting the product they want
Define Refusal to Deal (distribution issue)
Sellers refuse to sell to legitimate buyers
Define Exclusive Dealing (distribution issue)
A seller refuses to sell to another channel member unless that customer agrees to buy only from that seller
Define Primary Selling (distribution issue)
Salespeople are paid to recruit additional salespeople, and each new sales person pays to “invest” in the scheme, with some of that investment going to earlier participants in the scheme
Importance of provincial laws
Focused on protection of buyers and sellers with respect to direct sales contracts
Government Regulatory Agencies
- Canadian Radio Television and Telecommunications Commission (CRTC)
- National Energy Board
Define Canadian Radio Television and Telecommunications Commission (CRTC)
Regulates and supervises all aspects of the Canadian broadcasting system
Define National Energy Board
Regulates the construction and operation of interprovincial and international pipeline and power lines
Define Economic Environment
Factors that influence consumer buying power and marketing strategies
Define Gross Domestic Product (GDP)
Sum of all goods and services produced by a nation in a year
Define Business Cycle
Pattern of stages in the level of economic activity
Stages in the Business Cycle
- Prosperity
- Recession
- Depression
- Recovery
Explain Prosperity
Consumer spending is brisk; growth in services sector
Explain Recession
Consumers focus on basic, fundamental products
Explain Depression
Consumer spending sinks to its lowest
Explain Recovery
Consumer purchasing power increases
Define Inflation
Devalues money by reducing the products it can buy through persistent price increases
Impact of Deflation
- A free fall in business profits
- Lower returns on most investments
- Widespread job layoffs
Define Unemployment
Proportion of people in the economy who are actively seeking work but do not have jobs
DefineDiscretionary Income
The amount of money people have to spend after buying necessity items
Define Shortages
Result from lack of raw materials, component parts, energy and labour
Define Demarketing
Reducing consumer demand for a good or service to a level that the firm can supply
Technology leads to
- New products
- Improvement in existing products
- Better customer service
- Reduced prices
Sources of technology
- Industry
- Educational institutions
- Not for profit institutions
- Federal government
Value of technology
Marketers monitor new technology to gain a competitive edge and to enhance customer service
Define Voice Over Internet Protocol (VOIP)
Alternative to traditional telecommunications services
Define Internal Protocol Multimedia Subsystem (IMS)
Will offer new opportunities to marketers
The Social/Cultural Environment
The relationship between the marketer; society and culture
Define Consumerism
Social force within the environment that aids and protects the consumer by exerting legal, moral and economic pressures on the government and business
Define Marketing Ethics
Marketers’ standards of conduct and moral values
Ethics in Marketing Research
Consumers are concerned about privacy
Ethics in Product Strategy
Product quality, obsolescence, brand similarity and packaging raise ethical issues
Ethics in Distribution
Determining the appropriate degree of control over the distribution channel
Ethics in Promotion
Truth in advertising
Ethics in Pricing
Credit card companies, payday loan companies and health clubs often was a fine line between being ethical and unethical
Ethics and Social Responsibility
- Philanthropic
- Ethical
- Legal
- Economic
Philanthropic Factors
- Be a good corporate citizen
- Contribute resources to the community
- Improve quality of life
Ethical Factors
- Be ethical
- Obligation to do what is right, just and fair
Legal Factors
- Obey the law
- Law is society’s codification of right and wrong
- Play by the rules of the game
Economic Factors
- Be profitable
- The foundation upon which all the others rest
Define Ecology
Relationship between organisms and their natural environments
Define Green Marketing
Production, promotion and reclamation of environmentally sensitive products
Define Divestiture
Is selling a division of part of an organization and is often used to raise capital for further strategic acquisitions or investments
