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Introduction to Business

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Introduction to Business ­MGT 211
VU
LESSON 23
THE MARKETING ENVIRONMENT
The powerful forces of the external marketing environment heavily influence marketing
programs by posing opportunities and threats.
a.
Political and legal environment: From taxes to regulations to laws, the political and
legal environment has a profound impact on marketing. This is especially true for
certain industries, such as telecommunications, automobiles, and tobacco.
b.
Social and cultural environment:  Trends in this arena, present enormous
opportunities for companies that are both farsighted and flexible. Issues and changes
include increasing diversity in the U.S., more single-parent families, a rapidly growing
senior population, etc.
c.
Technological environment: New technologies create new goods and services, but
also make some existing products obsolete (witness the growing dominance of DVDs
at Blockbuster). In recent years, the emergence of the Internet has had the greatest
impact on marketing.
d.
Economic environment: Inflation, interest rates, recession, and recovery-both in the
U.S. and (to an increasing extent) abroad-have a dramatic influence on every element
of the marketing mix.
e.
Competitive environment: Creating a competitive advantage is a fundamental goal
of marketing that can only be accomplished by carefully and continually monitoring
every element of the competitive environment.
f.
The competitive environment drives many marketing decisions. By studying the
competition, marketers determine how best to position their own products. Knowing
the alternatives available to your customers, who your competitors are and what they
offer is as vital to success as watching for the next big food or fashion craze or
technological innovation.
There are three specific types of competition:
Substitute product competition: Products that are dissimilar from those of competitors, but
can fulfill the same need (e.g. television and computer games are very different from one
another, but both fulfill the need for entertainment).
Brand competition: Occurs between similar products (e.g. Zest bar soap and Irish Spring bar
soap).
International competition: matches the products of domestic marketers against those of
foreign competitors (e.g. Neutrogena skin care products vs. L'Oreal skin care products, or
Heineken vs. Budweiser).
THE MARKETING MIX
A firm's marketing mix (often called the four Ps) consists of product, place (or distribution),
price, and promotion.
Product: The good, service, or idea that is marketed to fill consumer wants and needs.
Improving existing products and developing new products are among the marketer's most
important tasks.
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Introduction to Business ­MGT 211
VU
Product differentiation: Creation of a product or product image that differs enough from
existing products to attract consumers. Differentiation is a source of competitive advantage.
Combinations of physical goods and services can also be sources of differentiation.
Pricing: Selecting the most appropriate price at which to sell a product. Lower prices
generally lead to higher sales volume, while higher prices generally lead to higher profits per
unit.  Prices must support a variety of costs, such as the organization's operating,
administrative, and research costs, and marketing cost like advertising and sales salaries
Place (distribution): Determining the most effective and efficient way to get products from
producers to consumers. Distribution also involves choosing which channels of distribution
are most appropriate.
Promotion: All of the activities a firm undertakes to communicate and promote its products to
the target market. This is clearly the most visible element of the marketing mix.
Target Marketing and Market Segmentation
A market contains all the customers or businesses who might be interested in a product and
can pay for it.
a. Identifying Market Segments: Companies subdivide the market into market
segments, homogeneous groups of customers within a market that are
significantly different from one another. The goal of the market segmentation
process is to group customers with similar characteristics, behavior and needs.
These target markets can then be offered products that are priced, distributed,
and promoted differently. Four factors marketers frequently use to identify
market segments are:
Geographic segmentation divides markets into certain areas such as regions, cities, counties,
or neighborhoods to customize and sell products that meet the needs of specific markets.
i.
Demographics uses statistical analysis to subdivide the population
according to characteristics such as age, gender, income, race,
occupation, and ethnic group.
ii.
Psychographics is the analysis of people by psychological makeup,
including activities, interests, opinions, and lifestyles (e.g. fashion-
consciousness, thrill-seeking).
iii.
Behavioral segmentation divides markets according to customers'
knowledge of, attitude toward, use of, or response to products or their
characteristics.
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Table of Contents:
  1. INTRODUCTION:CONCEPT OF BUSINESS, KINDS OF INDSTRY, TYPES OF TRADE
  2. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:THE ECONOMIC ENVIRONMENT
  3. BUSINESS ORGANIZATION:Sole Proprietorship, Joint Stock Company, Combination
  4. SOLE PROPRIETORSHIP AND ITS CHARACTERISTICS:ADVANTAGES OF SOLE PROPRIETORSHIP
  5. PARTNERSHIP AND ITS CHARACTERISTICS:ADVANTAGES AND DISADVANTAGES OF PARTNERSHIP
  6. PARTNERSHIP (Continued):KINDS OF PARTNERS, PARTNERSHIP AT WILL
  7. PARTNERSHIP (Continued):PARTNESHIP AGREEMENT, CONCLUSION, DUTIES OF PARTNERS
  8. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:ETHICS IN THE WORKPLACE, SOCIAL RESPONSIBILITY
  9. JOINT STOCK COMPANY:PRIVATE COMPANY, PROMOTION STAGE, INCORPORATION STAGE
  10. LEGAL DOCUMENTS ISSUED BY A COMPANY:MEMORANDUM OF ASSOCIATION, CONTENTS OF ARTICLES
  11. WINDING UP OF COMPANY:VOLUNTARY WIDNIGN UP, KINDS OF SHARE CAPITAL
  12. COOPERATIVE SOCIETY:ADVANTAGES OF COOPERATIVE SOCIETY
  13. WHO ARE MANAGERS?:THE MANAGEMENT PROCESS, BASIC MANAGEMENT SKILLS
  14. HUMAN RESOURCE MANAGEMENT:Human Resource Planning
  15. STAFFING:STAFFING THE ORGANIZATION
  16. STAFF TRAINING & DEVELOPMENT:Typical Topics of Employee Training, Training Methods
  17. BUSINESS MANAGERíS RESPONSIBILITY PROFILE:Accountability, Specific responsibilities
  18. COMPENSATION AND BENEFITS:THE LEGAL CONTEXT OF HR MANAGEMENT, DEALING WITH ORGANIZED LABOR
  19. COMPENSATION AND BENEFITS (Continued):MOTIVATION IN THE WORKPLACE
  20. STRATEGIES FOR ENHANCING JOB SATISFACTION AND MORALE
  21. MANAGERIAL STYLES AND LEADERSHIP:Changing Patterns of Leadership
  22. MARKETING:What Is Marketing?, Marketing: Providing Value and Satisfaction
  23. THE MARKETING ENVIRONMENT:THE MARKETING MIX, Product differentiation
  24. MARKET RESEARCH:Market information, Market Segmentation, Market Trends
  25. MARKET RESEARCH PROCESS:Select the research design, Collecting and analyzing data
  26. MARKETING RESEARCH:Data Warehousing and Data Mining
  27. LEARNING EXPERIENCES OF STUDENTS EARNING LOWER LEVEL CREDIT:Discussion Topics, Market Segmentation
  28. UNDERSTANDING CONSUMER BEHAVIOR:The Consumer Buying Process
  29. THE DISTRIBUTION MIX:Intermediaries and Distribution Channels, Distribution of Business Products
  30. PHYSICAL DISTRIBUTION:Transportation Operations, Distribution as a Marketing Strategy
  31. PROMOTION:Information and Exchange Values, Promotional Strategies
  32. ADVERTISING PROMOTION:Advertising Strategies, Advertising Media
  33. PERSONAL SELLING:Personal Selling Situations, The Personal Selling Process
  34. SALES PROMOTIONS:Publicity and Public Relations, Promotional Practices in Small Business
  35. THE PRODUCTIVITY:Responding to the Productivity Challenge, Domestic Productivity
  36. THE PLANNING PROCESS:Strengths, Weaknesses, Threats
  37. TOTAL QUALITY MANAGEMENT:Planning for Quality, Controlling for Quality
  38. TOTAL QUALITY MANAGEMENT (continued):Tools for Total Quality Management
  39. TOTAL QUALITY MANAGEMENT (continued):Process Re-engineering, Emphasizing Quality of Work Life
  40. BUSINESS IN DIGITAL AGE:Types of Information Systems, Telecommunications and Networks
  41. NON-VERBAL COMMUNICATION MODES:Body Movement, Facial Expressions
  42. BUSINESS ORGANIZATIONS:Organization as a System
  43. ACCOUNTING:Accounting Information System, Financial versus Managerial Accounting
  44. TOOLS OF THE ACCOUNTING TRADE:Double-Entry Accounting, Assets
  45. FINANCIAL MANAGEMENT:The Role of the Financial Manager, Short-Term (Operating) Expenditures