Principle Of Marketing

Chapter 3 Principle of Marketing

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Discussing the Concepts

1. Describe the elements of a company’s marketing environment and why marketers play a critical role in tracking environmental trends and spotting opportunities.

a. A company’s marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. Like Xerox, companies constantly watch and adapt to the changing environment.

b. More than any other group in the company, marketers must be environmental trend trackers and opportunity seekers. Although every manager in an organization should watch the outside environment, marketers have two special aptitudes. They have disciplined methods-marketing research and marketing intelligence-for collecting information about the marketing environment. They also spend more time in customer and competitor environments. By carefully studying the environment, marketers can adapt their strategies to meet new marketplace challenges and opportunities.

2. List some of the demographic trends of interest to marketers in the United States and discuss whether these trends pose opportunities or threats for marketers.

a. Changing Age Structure of the Population

Changing American Family

Geographic Shifts in Population

A better-educated, more white-collar, more professional population

Increasing diversity

b. The first trend( The changing age structure of the population), poses a threat because defining people by their birth date may be less effective than segmenting them by their lifestyle, life stage, life stage, or the common values they seek in the products they buy. The second trend (The changing American family) poses an opportunity because the significant number of women in the workforce has spawned the child day-care business and increased the consumption of career-oriented women’s clothing, financial services, and convenience foods and services. The third trend (A better-educated, more white-collar, more professional population) poses an opportunity because the rising number of educated people will increase the demand for quality products, books, travel, computers, and Internet services. The final trend (Increasing Diversity) poses an opportunity because as the population in the U.S. grows more diverse, successful marketers will continue to diversify their marketing programs to take advantage of opportunities in fast-growing segments.

3. Discuss current trends in the economic environment of which marketers must be aware and provide examples of companies’ responses to each trend.

a. The economic environment consists of trends like changes in consumer spending and income distribution. Marketers must pay close attention to major trends and consumer spending patterns both across and within their world markets

b. Some current economic factors include the recent recession, interest rates, the housing crisis, fuel costs, and the weak dollar against most world currencies. For example, a weak U.S. dollar is a threat for Americans purchasing imported goods or traveling abroad, but it is an opportunity for American companies exporting products to other countries as well as for the hospitality industry in the United States, as foreign consumers take advantage of their stronger currencies and travel to this country.

4. Discuss trends in the natural environment of which marketers must be aware and provide examples of companies’ responses to them.

a. The natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Marketers should be aware of several trends in the natural environment.

• Growing shortages of raw materials. Marketers need to rely less on nonrenewable resources and use renewable resources more wisely,

• Increased pollution. Industry will almost always damage the quality of the natural environment.

• Increase government intervention in natural resource management. The governments of different countries vary in their efforts to promote a clean environment. The general hope is that companies around the world will accept more social responsibility, and that less expensive devices can be found to control and reduce pollution.

b. Companies’ responses to more environmentally friendly trends have been improving. They are responding to consumer demands with more environmentally responsible products, such as recyclable or biodegradable packaging, recycled materials and components, better pollution controls and more energy-efficient operations. More and more, they are recognizing the link between a healthy ecology and a healthy economy. They are learning that environmentally responsible actions can also be good business.

5. Compare and contrast core beliefs/values and secondary beliefs/values. Provide an example of each and discuss the potential impact marketers have on each.

a. Core beliefs and values are passed on from parents to children and are reinforced by schools, churches, business, and government. Secondary beliefs and values are more open to change. Believing in marriage is a core belief; believing that people should get married early in life is a secondary belief. Marketers have some chance of changing secondary values but little chance of changing core values.

6. Explain how companies can take a proactive stance toward the marketing environment.

a. Companies can be either proactive or reactive in responding to events that impact them. Companies that take a proactive stance plan in advance and initiate action to deal with events, instead of merely responding to events. In the area of customer service, for instance, a company may take proactive action to recall a product if it finds that there is a problem with it, rather than waiting for consumers to complain and then reacting to the issue.

Company Case Notes: Target: From “Expect More” to “Pay Less”

1. What microenvironmental factors have affected Target’s performance over the past few years?

a. Microenvironmental factors that affected them would include Company, competitors, media, and intermediaries. Target itself, is a discount retail store, but is known to carry designer wears. Since Target is known for style, fashionable and slightly higher priced clothing and appliances, and in the end, they hurt themselves. Target should have done a lot better of a job in providing customer value and satisfaction then Wal-Mart or others. Customers would have stayed loyal if valued and satisfied. Wal-Mart had a huge microenvironment affect as a competitor is the low cost store, which lures customers in and would normally get most of the attention, through the consumers assuming that they have a cheaper and better buys. As Wal-Mart did 5 percent better in quarterly posting of profits and Target’s sales and profits were shooting down, the Media spreading this through news, features, and editorial opinions had a large affect to Target’s performance.

2. What macroenvironmental factors have affected Target’s performance during that period?

a. The macro environmental factors that affected Target's performance during the period were related to the demographic, economic, natural, technological, political, and cultural. The shifting dynamic between Target and Wal-Mart was the change in economic conditions such as Unemployment, sliding GDP growth which created an environment where most of the customers had less income.

3. By focusing on the “Pay less” part of its slogan, has Target pursued the best strategy? Why or why not?

a. There “pay less” strategy is the best strategy. They told the old customers that they still have high quality product just at lower prices than before. They showed new customers that they could have high quality products without having to pay a high price.

4. What alternative strategy might target have followed in responding to the first signs of declining revenues and profits?

a. Target should have promoted itself more and created better quality items at lower prices. They should have fulfilled their slogan and focused on their customers instead of being so worried about their competitors. In the end they are still overpriced on a lot of their items. Customer service should have been amped up. Forget remarketing themselves. Quality items at expected prices and customer service are things they should have focused on. Making sure there are no crazy lines, stores are clean and maintained, and making sure their slogan meets expectations should have been what Target focused on.

5. Given Target’s current situation, what recommendations would you make to CEO Steinhafel for his company’s future?

a. In my opinion, they need make their business reform outside of the company, and do more connections between the company and the customers.