chapter 3 mktg
Information technology (IT) is changing the lives of consumers across the globe
Offers lucrative career opportunities Provides business opportunities for entrepreneurs Improves supply-chain management
Consumerism
Organized efforts by individuals, groups, and organizations to protect consumers' rights
competition
Other organizations that market products that are similar to or can be substituted for a marketer's products in the same geographic area
Other laws focus on particular marketing activities
Product development and testing Packaging Labeling Advertising Consumer financing
Foreign Corrupt Practices Act (1977)
Prohibits American companies from making illicit payments to foreign officials in order to obtain or keep business
Celler-Kefauver Act (1950)
Prohibits any corporation engaged in commerce from acquiring the whole or any part of the stock or other share of the capital assets of another corporation when the effect substantially lessens competition or tends to create a monopoly
Sherman Antitrust Act (1890)
Prohibits contracts, combinations, or conspiracies to restrain trade; establishes as a misdemeanor monopolizing or attempting to monopolize
Nutrition Labeling and Education Act (1990)
Prohibits exaggerated health claims; requires all processed foods to contain labels with nutritional information
Robinson-Patman Act (1936)
Prohibits price discrimination that lessens competition among wholesalers or retailers; prohibits producers from giving disproportionate services or facilities to large buyers
Clayton Act (1914)
Prohibits specific practices such as price discrimination, exclusive-dealer arrangements, and stock acquisitions whose effect may noticeably lessen competition or tend to create a monopoly
Consumer Goods Pricing Act (1975)
Prohibits the use of price-maintenance agreements among manufacturers and resellers in interstate commerce.
Wheeler-Lea Act (1938)
Prohibits unfair and deceptive acts and practices regardless of whether competition is injured; places advertising of foods and drugs under the jurisdiction of the FTC
Magnuson-Moss Warranty (FTC) Act (1975)
Provides for minimum disclosure standards for written consumer product warranties; defines minimum consent standards for written warranties; allows the FTC to prescribe interpretive rules in policy statements regarding unfair or deceptive practices
Lanham Act (1946)
Provides protections for and regulation of brand names, brand marks, trade names, and trademarks
Children's Online Privacy Protection Act (2000)
Regulates the collection of personally identifiable information (name, address, email address, hobbies, interests, or information collected through cookies) online from children under age 13
buying power
Resources, such as money, goods, and services, that can be traded in an exchange -income -credit -wealth
Technology
The application of knowledge and tools to solve problems and perform tasks more efficiently
Environmental Analysis
The process of assessing and interpreting the information gathered through environmental scanning
demographic changes
White 62...46 Hispanic 18....24 Black or African American 12...13 Asian 6...14
achieve their objectives, consumers and their advocates:
Write letters or send e-mails to companies Post on social media sites Lobby government agencies Broadcast public service announcements Boycott companies whose activities they deem irresponsible
monopolistic competition
a market structure in which many companies sell products that are similar but not identical
business cycle
a pattern of economic fluctuations that has four stages: prosperity, recession, depression, and recovery
disposable income
after-tax income
willingness to spend
an inclination to buy because of expected satisfaction from a product, influenced by the ability to buy and numerous psychological and social forces
consent decree
an order for a business to stop engaging in questionable activities to avoid prosecution
political, legal and regulatory forces of the marketing environment
are closely interrelated -Legislation is enacted -Legal decisions are interpreted by courts -Regulatory agencies are created and operated, for the most part, by elected or appointed officials
Sociocultural forces
attitudes, beliefs, norms, customs, and lifestyles
Reach refers to the
broad nature of technology as it moves through society
The dynamics of technology involve the
constant change that often challenges the structures of social institutions, including: Social relationships The legal system Religion Education Business Leisure
Regulatory agencies monitor many marketing activities and usually have the power to
enforce specific laws, as well as some discretion in establishing operating rules and regulations to guide certain types of industry practices
total budget competitors
firms that compete for the limited financial resources of the same customers
there is not best way to react to
forces; depends on organizations managerial philosophies, objectives, financial resources, customers, and human resourcing skills, as well as the environment within to which org operates
Through a procedure known as technology assessment, managers try to
foresee the effects of new products and processes on their firm's operations, on other business organizations, and on society in general -management tries to estimate whether benefits of adopting a specific technology outweigh costs to the firm and to society at large
by analyzing information ,a manger is able to
identify potential threats and opportunities
a manager evaluates the information for accuracy, tries to resolve
inconsistencies in the data, and if warranted, assigns significance to the findings
The current trend is moving away from
legally-based organizational compliance programs -Instead, many companies are choosing to provide incentives that foster a culture of ethics and responsibility that encourages compliance with laws and regulations
because the organization has no competitors, it controls the supply of the product completely, and as a single seller can erect barriers to potential competitors
monopoly
environmental scanning involves
observation, secondary sources such as business, trade, government, and general interest publications, marketing research
marketers take 2 general approaches to environmental forces
passive- accepting them as uncontrollable proactive- attempting to influence and shape them
credit enables
people to spend future income now or in the near future
Dodd-Frank Wall Street Reform and Consumer Protection Act (2010)
promotes financial reform to increase accountability and transparency in the financial industry, protects consumers from deceptive financial practices, and establishes the Bureau of Consumer Financial Protection
A number of consumer protection laws deal with consumer safety and are designed to
protect people from actual and potential physical harm caused by adulteration or mislabeling
the internet had become a popular
scanning tool bc it makes data more accessible and allows companies to gather needed information quickly
The self-sustaining nature of technology relates to the fact that
technology acts as a catalyst to spur even faster development
wealth
the accumulation of past income, natural resources, and financial resources -global wealth is increasing -wealth is unevenly distributed
pure competition
the market structure that exists when there are many small businesses selling one standardized product -doesn't exist in the real world
environmental scanning
the process of collecting information about forces in the marketing environment
prosperity
the state of being successful usually by making a lot of money -willing to buy and markets often expand their product offerings to take advantage of
information about competitors allows marketing managers to assess the performance of
their own marketing efforts and to recognize the strengths and weaknesses of their own
when marketing managers define the target market
they simultaneously establish a set of competitors
marketing managers must consider the
type of competitive structure in which the firm operates
If groundbreaking products and processes cannot be protected through patents,
, a company is less likely to market them and make the benefits of its research available to competitors
Advantages of self regulatory forces
- Establishment and implementation are usually less expensive - Guidelines are generally more realistic and operational - Effective self-regulatory programs reduce the need to expand government bureaucracy
Legal and Regulatory Forces
- Self-regulatory forces - Pre competitive legislation - Consumer protection legislation - Encouraging compliance with laws and regulations - Regulatory agencies
disadvantage to self regulatory forces
- When a trade association creates a set of industry guidelines for its members, nonmember firms do not have to abide by them - Many self-regulatory programs lack the tools or authority to enforce guidelines - Guidelines in self-regulatory programs are often less strict than those established by government agencies
Marketers may: View political forces as
- as beyond their control and simply adjust to conditions that arise from those forces - Influence the process through contributions and lobbying
factors affecting credit use
-Must be available -Interest rates -Credit terms (such as size of down payment and amount and number of monthly payments)
federal trade commission enforcement tools
-cease and desist -consent decree - redress - corrective advertising -civil penalties
factors that affect consumers general willingness to spend are
-expectations about future employment -income levels - prices -family size - general economic conditions
changes in economic conditions affect
-supply and demand - buying power - willingness to spend - consumer expenditure levels -intensity of competitive behavior
Self regulatory issues in marketing
1 Truthful Advertising Messages 2 Health and Childhood Obesity 3 Internet Tracking/User Privacy 4 Concern for Vulnerable Populations 5 Failure to Deliver on Expectations and Promises 6 Sustainable Marketing Practices and Greenwashing 7 Transparent Pricing 8 Understandable Labeling and Packaging 9 Supply Chain Relationships/Ethical Sourcing 10 Marketing of Dangerous Products 11 Product Quality Failures 12 Nonresponse to Customer Complaints
competitors can be classified into one of the four types
1. brand 2. product 3. generic 4. total budget
as people become wealthier, they gain buying power in (3)
1. make current purchases 2. generate income 3. acquire large amount of credit
Oligopoly
A competitive structure in which a few sellers control the supply of a large proportion of a product - difficult to enter the market and compete with oligopolies
monopoly
A competitive structure in which an organization offers a product that has no close substitutes, making that organization the sole source of supply
Depression
A long-term economic state characterized by unemployment and low prices and low levels of trade and investment
National Advertising Review Board (NARB)
A self-regulatory unit that considers challenges to issues raised by the National Advertising Division (an arm of the Council of Better Business Bureaus) about an advertisement
Recession
A stage of the business cycle during which unemployment rises and total buying power declines, stifling both consumer and business spending
recovery
A stage of the business cycle in which the economy moves from recession or depression toward prosperity -difficult to say when the level of prosperity will come back - marketers should maintain flexibility
Better Business Bureau (BBB) -
A system of nongovernmental, independent, local regulatory agencies supported by local businesses that helps settle problems between customers and specific business firms
Trademark Law Revision Act (1988)
Amends the Lanham Act to allow brands not yet introduced to be protected through registration with the Patent and Trademark Office
Federal Trade Commission (FTC)
An agency that regulates a variety of business practices and curbs false advertising, misleading pricing, and deceptive packaging and labeling
These forces help determine what, where, how, and when people buy products
Attitudes Beliefs Norms Customs Lifestyles
Negative impacts include:
Concerns over privacy Intellectual property protection issues
Federal Trade Commission Act (1914)
Created the Federal Trade Commission; also gives the FTC investigatory powers to be used in preventing unfair methods of competition
Do Not Call Implementation Act (2003)
Directs the FCC and FTC to coordinate so their rules are consistent regarding tele-marketing call practices including the Do Not Call Registry and other lists, as well as call abandonment; in 2008, the FTC amended its rules and banned prerecorded sales pitches for all but a few cases
discretionary income
Disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing, and shelter
Telephone Consumer Protection Act (1991)
Establishes procedures to avoid unwanted telephone solicitations; prohibits marketers from using an automated telephone dialing system or an artificial or prerecorded voice to certain telephone lines
product competitors
Firms that compete in the same product class but market products with different features, benefits, and prices
Brand Competitors
Firms that market products with similar features and benefits to the same customers at similar prices
generic competitors
Firms that provide very different products that solve the same problem or satisfy the same basic customer need
income
For an individual, the amount of money received through wages, rents, investments, pensions, and subsidy payments for a given period
Federal Trademark Dilution Act (1995)
Grants trademark owners the right to protect trademarks and requires relinquishment of names that match or parallel existing trademarks
Changes in cultural values dramatically influence people's needs and desires for products
Health, nutrition, and exercise are growing in importance (sales of organic foods, herbs and herbal remedies, vitamins, and dietary supplements have escalated) Values regarding the permanence of marriage are changing Children continue to be very important The trend toward eat-out and take-out meals Green marketing helps establish long-term consumer relationships by maintaining, supporting, and enhancing the natural environment
Trademark Counterfeiting Act (1980)
Imposes civil and criminal penalties against those who deal in counterfeit consumer goods or any counterfeit goods that can threaten health or safety
Changes in a population's demographic characteristics lead to changes in how people live and consume products
Increasing proportion of older consumers and singles Declining birth rate Growing number of immigrants
consumerism movements
Individual consumer advocates Consumer organizations and other interest groups Consumer education Consumer laws
Fair Packaging and Labeling Act (1966)
Makes illegal the unfair or deceptive packaging or labeling of consumer products
Procompetitive laws are designed to preserve competition
Most of these laws were enacted to end various antitrade practices deemed unacceptable by society