Chapter 3 Principle of Marketing
Hal: 416
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.
