buad307 midterm study guide - 1 BUAD 307 Marketing Midterm...

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1 BUAD 307 Marketing Midterm Study Guide- Classroom Material The Marketing Environment The Marketing Environment: includes factors the company itself cannot control: environmental scanning, environmental forces, social, economic, technological, competitive, regulatory, strategic planning (purposes and objective and challenges), business-unit strategies-core competencies, issues in creating a strategy, choosing battles carefully Environmental Scanning: what is happening around us and adapting before it happens, helps the firm understand developments in the market, scanning->analysis-> action-> Elements of the Environment o Social: changes in customs or demographics greatly influence firms Demographics: older citizens, unmarried singles, immigrants (must advertise in different languages), ethnic diversity Family changes: “blended” families (high divorce rates->less income in each house, cheap furniture), non-traditional households Cultural changes: roles of women (more work today/larger influence on household spending/less time for domestic duties), values- ex: fitness Longer work hours for some, yet also more people working part time Changing cultural standards o Economic Forces: two main economic forces that affect firms and consumers –economic cycles, and inflation consumer income-nominal vs. inflation adjusted, impact of inflation, disposable vs. pre-tax income, discretionary income, regional influences, economic cycles Economic Cycles Prosperity: affluence, high employment, danger of inflation and high interest rates “soft landing”: inflation is reduces, layoffs Recession: lower interest rates, low levels of inflation, low growth (vicious cycles), job less Depression: may be able to get bargins, vicious cycle, severe job loss Recovery: economic and job growth, rising interest rates, inflation Different industries are affected to different degrees by changes in the economy. In good times firms have trouble keeping up with demand. Lots of demand increases fear of inflation-Fed tries to prevent it by raising interest rate so businesses are less willing to invest Inflation: nominal vs. inflation adjusted dollars is important. Inflation is uneven, up more in some sectors than others Technological: changes in technology may make business obsolete ex: buggy whips w/cars, airport at Gander, Newfoundland-longer range aircraft, deferral express (fax machine, internet). New opportunities- esp. online retailers, mass customization o Competitive Levels: discretionary income, product competition, brand competition Brand level: two firms compete in providing a very similar product or service coke and Pepsi Product level: less direct, all drinks-substitution Budget level: different products or services provide very different benefits, but buyers have to make choices as to what they will buy when they cannot afford or are unwilling to spend on both Firm level: must make choices
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