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Chapter Three Objectives/Review Answers
Terms in this set (23)
Explain the purpose of environmental scanning?
Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends. Environmental trends typically arise from five sources: social, economic, technological, competitive, and regulatory forces. A firm conducting an environmental scan of the marketplace might uncover key trends such as the changing use of media, the increasing impact of new technologies, and many others.
Describe social forces such as demographics and culture
The social forces of the environment include the demographic characteristics and the culture of the population. Three key demographic characteristics include a population profile, a description of generational cohorts (baby boomers, Generation X, and Generation Y), and a description of racial and ethnic diversity. Culture incorporates the set of values, ideas, and attitudes that is learned and shared among the members of a group.
Discuss how economic forces affect marketing
Two aspects of economic forces include macroeconomic conditions related to the marketplace and microeconomic factors such as consumer income. Indicators of marketplace conditions include GDP, unemployment, and price changes (inflation or deflation). Consumer income has gross, disposable, and discretionary components. The state of the economy and changes in income can influence consumers' ability to buy products and services.
Discuss how technological changes can affect marketing
Technological innovations can replace existing products and services. Changes in technology can also have an impact on customer value by reducing the cost of products, improving the quality of products, and providing new products that were not previously feasible. Electronic commerce is transforming how companies do business.
Discuss forms of competition that affect marketing
-The key components of competition include the likelihood of new competitors, the power of buyers and suppliers, and the presence of competitors and possible substitutes.
-While large companies are often used as examples of marketplace competitors, there are 28 million small businesses in the United States that have a significant impact on the economy.
Explain the major legislation that ensures competition and regulates the elements of the marketing mix.
Regulation exists to protect companies and consumers. Legislation that ensures a competitive marketplace includes the Sherman Antitrust Act. -Product-related legislation includes copyright and trademark laws that protect companies and packaging and labeling laws that protect consumers. -Pricing- and distribution related laws are designed to create a competitive marketplace with fair prices and availability.
-Regulation related to promotion and advertising reduces deceptive practices and provides enforcement through the Federal Trade Commission. -Self-regulation through organizations such as the Better Business Bureau provides an alternative to federal and state regulation.
Identify factors that influence ethical and unethical marketing decisions.
Four factors influence ethical marketing behavior.
--First, societal culture and norms serve as socializing forces that dictate what is morally right and just.
-Second, business culture and industry practices affect ethical conduct in both the exchange relation-ships between buyers and sellers and the competitive behavior among sellers.
-Third, corporate culture and expectations are often defined by corporate ethics codes and the ethical behavior of top management and co-workers.
- Finally, an individual's personal moral philosophy, such as moral idealism or utilitarianism, will dictate ethical choices. Ultimately, ethical behavior rests with the individual, but the consequences affect many.
Describe the different concepts of social responsibility
Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions. There are three concepts of social responsibility: profit responsibility, stakeholder responsibility, and societal responsibility.
Describe four generational cohorts
-(1) Baby boomers are the generation of 73 million among the U.S. population born between 1946 and 1964. These Americans are growing older and will all be 65 or older by 2030.
-(2) Generation X includes the 50 million people born between 1965 and 1976. These well-educated Americans, also known as the baby-bust cohort because of declining birthrates during that time, are supportive of racial and ethnic diversity.
-(3) Generation Y, or millennials, are the 75 million Americans among the U.S. population born between 1977 and 1994. The rising birthrate of this "echo-boom" cohort is the result of baby boomers having children. -(4) The post-millennial generation, which includes consumers born between 1995 and 2010, is referred to as Generation Z.
why are companies developing multicultural marketing programs?
consist of combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races & ethnic groups, the reason for developing these programs is that racial & ethnic diversity of the U.S. is changing rapidly due to the increases in African American, Asian and Hispanic populations, which increases their economic impact
How are important values such as sustainability reflected in the marketplace today?
many Americans desire & practice sustainability to preserve the environment, consumers buy products such as hybrid gas-electric cars, consumers also prefer brands that have a strong link to social action, companies are responding to this consumer trend by producing products that use renewable energy and less packaging
What is the difference between a consumer's disposable and discretionary income?
-disposable = money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, & transportation
-discretionary = money that remains after paying for taxes and necessities and is usually spent on luxury items
How does technology impact customer value?
1. consumers can now assess value on the basis of dimensions such as quality, service, & relationships due to the decline in the cost of technology
2. technology provides value through the development of new products
In pure competition there are a __________ number of sellers.
The _________ Act forbids actual monopolies, whereas the ________ Act forbids actions that are likely to lessen competition.
Sherman Anti-Trust, Clayton
The Federal Trade Commission (FTC) monitors _________.
unfair business practices
How does the Better Business Bureau encourage companies to follow its standards for commerce?
The Better Business Bureau (BBB) uses moral suasion to get members to comply with its standards. Companies, which join the BBB voluntarily, must agree to follow these standards before they are allowed to display the BBB Accredited Business logo.
What rights are included in the Consumer Bill of Rights?
The rights to safety, to be informed, to choose, and to be heard.
Economic espionage includes what kinds of activities?
Economic espionage is the clandestine collection of trade secrets or proprietary information about a company's competitors. This practice includes trespassing, theft, fraud, misrepresentation, wiretapping, searching competitors' trash, and violations of written and implicit employment agreements with noncompete clauses.
What is meant by moral idealism?
Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.
What is meant by social responsibility?
Social responsibility means that organizations are part of a larger society and are accountable to that society for their actions. It comprises three concepts: (1) profit responsibility—maximizing profits for the organization's shareholders; (2) stakeholder responsibility—the obligations an organization has to those who can affect the achievement of its objectives; and (3) societal responsibility—the obligations an organization has to preserve the ecological environment and to the general public.
Marketing efforts to produce, promote, and reclaim environmentally sensitive products are called ________.
What is sustainable development?
Sustainable development involves conducting business in such a way that protects the natural environment while making economic progress. Green marketing is an ecological example of such an initiative.
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