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ENVIRONMENT

CONCERNS IN
MARKETING
MANAGEMENT
Environmental management
Attainment of organizational objectives by
predicting and influencing the competitive,
political-legal, economic, technological, and
social- cultural environments.
Firms often create strategic alliances to
combine resources and
capital to compete more effectively.

THE COMPETITIVE ENVIRONMENT
Competitive environment Interactive process that occurs in the
marketplace among marketers of directly competitive products,
marketers of products that can be substituted for one another, and
marketers competing for the consumers purchasing power.
Companies with a monopoly usually accept regulation in
exchange for the exclusive right to serve a market segment.
OligarchyLimited number of sellers in an industry with high start-
up costs.
TYPES OF COMPETITION
Directamong marketers of similar products.
Indirectinvolves products that are easily substituted for each
other.
Competition among all firms that compete for consumers
purchases.
DEVELOPING A COMPETITIVE STRATEGY
Should we compete?
Depends on firms resources, objectives, and expected
profit potential.
If so, in what markets should we compete?
Allocate firms limited resources to the areas of greatest
opportunity.
How should we compete?
Includes product, promotion, distribution, and pricing
decisions that
maximize competitive advantage.
TIME-BASED COMPETITION
Strategy of developing and distributing goods more quickly
than competitors.
THE POLITICAL-LEGAL ENVIRONMENT
Political-legal environment Component of the marketing
environment consisting of laws and their interpretations that
require firms to operate under competitive conditions and to
protect consumer rights.
GOVERNMENT REGULATION
Antimonopoly period of the late 19th and early 20th
centuries.
Protecting competitors during the Great Depression.
Consumer protection in past 40 years.
Industry deregulation began in the 1970s and continues
today.
Newest regulatory frontier is cyberspace.
GOVERNMENT REGULATORY AGENCIES
Federal Trade Commission has broadest regulatory
powers over marketing.
Others include Consumer Product Safety
Commission, the Federal Power Commission, the EPA,
and FDA.
OTHER REGULATORY FORCES
Consumer interest organizations.
Self-regulatory groups.
CONTROLLING THE POLITICAL-LEGAL ENVIRONMENT
Complying with laws and regulations serves
customers and avoids legal problems.
Influencing the outcome of legislation through
lobbying or boycotts.
Unemploymentproportion of people
actively seeking work who do not have jobs.
Incomemany marketers focus on
discretionary income, amount of money
people have to spend after buying
necessities.
Resource availabilityshortages can result
from lack of raw materials, component parts,
and energy, or labor.
Demarketing Process of reducing consumer
demand for a good or service to a level that
the firm can supply.
Changes in consumer and business
buying habits, in exchange rates, in labor
costs, and other factors around the world
influence the decisions marketers make.
Global political changes affect
international marketplace.
THE INTERNATIONAL ECONOMIC ENVIRONMENT
THE TECHNOLOGICAL ENVIRONMENT
Technological environment Application to
marketing of knowledge based on
discoveries in science, inventions, and
innovations.
Government and not-for-profits often
contribute to research and development,
which can be very costly.
APPLYING TECHNOLOGY
Marketers monitor new technology to gain
competitive edge.
THE SOCIAL-CULTURAL ENVIRONMENT
Social-cultural environment Component of the
marketing environment consisting of the relationship
between the marketer, society, and culture.
Increasing importance of cultural diversity and
submarkets with unique values, preferences, and
behaviors.
CONSUMERISM
Consumerism Social force within the environment that
aids and protects the consumer by exerting legal, moral,
and economic pressures on business and government.
Basic consumer rights: to choose freely, to be informed,
to be heard, and to be safe.
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