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Essentials of Marketing (Chapter 3)
Evaluating Opportunities in the Changing Market Environment
33
Marketing
11/06/2012

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Term
Mission Statement
Definition
The organization's basic purpose of being.
Term
Competitive Environment
Definition
The number and types of competitors a company faces and how they may behave.
Term
Competitor Analysis
Definition
An organized approach for evaluating the strengths and weaknesses of current or potential competitors' marketing strategies.
Term
Competitive Rivals
Definition
The closest competitors to a firm. Usually these are firms with similar products, but could also be a firm that serves the same target market with a different product.
Term
Competitive Barriers
Definition
The conditions that may make it difficult, or even impossible, for a firm to compete in a market.
Term
Economic Environment
Definition
Macro-economic fators, including national income, economic growth, and inflation, that affect patterns of consumer and business spending.
Term
Technology
Definition
Application of science to convert an economy's resources to output.
Term
Nationalism
Definition
An emphasis on a country's interests before everything else.
Term
North American Free Trade Agreement (NAFTA)
Definition
Free-trade pact between U.S., Canada, and Mexico.
Term
Cultural and Social Environment
Definition
How and why people live and behave they way the do which affects customer buying behavior and eventually the economic, political, and legal environments.
Term
Gross Domestic Product (GDP)
Definition
Total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country.
Term
Senior Citizens
Definition
People over 65.
Term
Baby Boomers
Definition
People born between 1946 and 1964.
Term
Generation X
Definition
People born from 1965 to 1977.
Term
Generation Y
Definition
People born from 1978 to 1994. Called Millenials.
Term
Sustainability
Definition
Idea that it's important to meet present needs without compromising the ability of future generations to meet their own needs.
Term
Strategic Business Unit (SBU)
Definition
An organizational unit (within a larger company) that focuses on some product-markets and is treated as a separate profit center.
Term
What are the four major areas of the external market environment?
Definition
Economic environment, technological environment, political and legal environment, and cultural and social environment.
Term
What forces does the direct market environment consist of?
Definition
Customers, company, and competitors.
Term
What are 3 general objectives that a firm should have?
Definition
(1) Engage in specific activities that will perform a socially and economically useful function.
(2) Develop an organization to carry on the business and implement its strategies.
(3) Earn enough profit to survive.
Term
What are the different functional areas that should be evaluated to determine a firm's strengths and weaknesses?
Definition
Financial strength, production capability and flexibility, marketing strengths (4Ps), research, engineering, and general management.
Term
What are the 4 basic kinds of market (competitive) situations?
Definition
Pure competition, oligopoly, monopolistic competition, and monopoly.
Term
What are the steps of a competitor analysis?
Definition
(1) Identify potential competitors,
(2) Identify competitive rivals,
(3) Seek information about competitors,
Term
How does technology affect marketing?
Definition
Opportunities for new products and for new processes (ways of doing things).
Term
Sherman Act (1890)
Definition
Monopoly or conspiracy in restraint of trade.

Prohibitions:

Product - Monopoly or conspiracy to control a product.

Place - Monopoly or conspiracy to control distribution channels.

Price - Monopoly or conspiracy to fix or control prices.
Term
Clayton Act (1914)
Definition
Substanially lessens competition.

Prohibitions:

Product - Forcing sale of some products with others (tying contracts).

Place - Exclusive dealing contracts (limiting buyers' sources of supply)

Price - Price discrimination by manufacturers
Term
Federal Trade Commission Act (1914)
Definition
Unfair methods of competition.

Prohibitions:

Promotion - Deceptive ads or selling practices

Price - Deceptive pricing
Term
Robinson-Patman Act (1936)
Definition
Tends to injure competition.

Prohibitions:

Promotion - Prohibits "fake" advertising allowances or discrimination in help offered.

Price - Prohibits price discrimination on goods of "like" grade and quality without cost justification, and limits quantity discounts.
Term
Wheeler-Lea Amendment (1938)
Definition
Unfair or deceptive practices.

Prohibitions:

Product - Deceptive packaging or branding.

Promotion - Deceptive ads or selling claims.

Price - Deceptive pricing
Term
Antimerger Act (1950)
Definition
Lessens competition.

Prohibits:

Product - buying competitors.

Place - buying producers or distributors.
Term
Magnuson-Moss Act (1975)
Definition
Unreasonable practices.

Prohibits:

Product - product warranties.
Term
Gross National Income (GNI)
Definition
Similar to GDP, but doesn't include income earned by foreigners who own resources in that nation.
Term
What are examples of quantitative screening criteria?
Definition
Sales, profit, ROI, breakeven, number of products.