Marketing

Buildup approach(Evaluate Relevant Market Segments)

marketing manager begins by estimating how much of a product a potential buyer in a specific geographic area will purchase in a given period • Manager then multiples that amount by total number of potential buyers in that area • Performs same calculation for each geographic area in which the firm sells products and then adds the totals for each area to calculate market potential

Bait and switch

• Bait and switch pricing schemes attempt to gain consumer interest with a low-priced product, then switch the buyer to a more expensive product or add-on service

Bribery

• Bribery occurs when an incentive is offered in exchange for an illicit advantage

Adoption and Use of Technology

Lots of companies lose their status as market leaders because they fail to keep up with technological changes How secure a product is from imitation depends on how easily others can copy it without violating its patent o 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 Through 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

Marketing mix

activities that are planned, organized, implemented and controlled to meet the needs of customers within the target market. Marketers refer to these activities - product, pricing, distribution and promotion as the marketing mix because they decide what type of each element to use and in what amounts -Creates values through the marketing mix -Primary goal of a marketing manager is to create and maintain the right mix of these elements to satisfy customers' needs for a general product type -Managers must also constantly monitor the competition and adapt their product, pricing, promotion, and distribution decisions to create long-term success

The marketing-mix variables

are often viewed as controllable because they can be modified. However there are limits to how much marketing managers can alter them. Economic conditions, competitive structure, and government regulations may prevent a manager from adjusting prices frequently or significantly

The product variable

can be a good, a service, or an idea. -Ideas can include political parties, churches and schools -Involves creating or modifying brand names and packaging and may include decisions regarding warranty and repair services. Ex) "chemlawn" changed to trugreen -Important because they are directly involved with creating products that address customers' needs and wants

Total budget competitor

compete for the limited financial resources of the same customers. Total budget competitors for Diet Coke for example might be gum a newspaper, and bananas.

Product competitors

compete in the same product class but market products with different features, benefits and prices. The thirsty dieter, for instance, might purchase iced tea, juice a sports beverage or a bottled water instead of a soda.

Stakeholders

include those constituents who have a "stake" or claim in some aspect of a company's products, operations, markets, industry and outcomes; including customers, employees, investors and shareholders, suppliers, governments, communities and many others.

Consumerism

Consumerism involves organized efforts by individuals, groups, and organizations to protect consumers' rights. o Movement's major forces are individual consumer advocates, consumer organizations and other interest groups, consumer education and consumer laws To achieve their goals, consumers and their advocates write letters or send emails to companies, lobby government agencies... etc.

Demographic and Diversity Characteristics

One demographic change that is affecting the marketplace is the increasing proportion of older consumers o Marketers can expect significant increases in the demand for health-care services, recreation tourism, retirement housing, and selected skin-care products Number of singles is also on the rise. There are more single people than married people for the first time in a very long time US is going through another baby boom, with 885 million Americans age 19 or younger, representing 27.1 percent of the total population Birth rate is declining but new immigrants help with population gains Number of immigrants into the US has steadily risen during the last 40 years. By 2050, more than 133 million Hispanics, 66 million blacks and 41 million Asians will call America home

Cultural Values

Marketers try to monitor cultural changes, knowing this info can equip them to predict changes in consumers' needs for products, at least in the near future In the 1980s, issues of health, nutrition, and exercise grew in importance o Americans today are more likely to favor smoke-free environments and to consume less alcohol Major source of cultural values is the family o When asked about the most important aspect of their lives, adults specified family issues and a happy marriage o Today however, only one out of two marriages is predicted to last Values regarding the permanence of marriage are changing. o Children continue to be very important. Marketers have responded with safer, upscale baby gear and supplies, children's electronics, and family entertainment products o More eat-out and take-out meals. Green marketing helps establish long-term consumer relationships by maintaining, supporting, and enhancing the natural environment o One of society's environmental hurdles is proper disposal of waste, especially of non-degradable materials such as disposable diapers and polystyrene packaging

Impact of Technology

Social networks, smart phones, and tablet computers help marketers stay in touch with clients, make appointments, and handle last-minute orders or cancellations 1/4 of Americans have exchanged their land-lines for cell phones. 35% of American adults own the more advanced smart phones o This proliferation led marketers to employ text and multimedia messaging on cell phones to reach their target markets. Desktop computers appear to be on the decline. Laptops became immensely popular due to their mobility, but analysts estimate that laptops might be entering the maturity stage of the product life cycle with tablets becoming more popular Lots of negative impacts to consider as well o Increasingly concerned about protecting our privacy and intellectual property o Hackers and those who steal digital property are also using advanced technology to harm others o Ability to call from almost any location has many benefits, but it also has negative side effects, including increases in traffic accidents, increased noise pollution, and fears about potential health risks Effects of technology relate to such characteristics as dynamics, reach, and the self-sustaining nature of technological progress o Dynamics of technology involve the constant change that often challenges the structure of social institutions, including social relationships, the legal system, religion, education, business, and leisure o Reach refers to the broad nature of technology as it moves through society o Self-sustaining nature of technology relates to the fact that technology acts as a catalyst to spur even faster development o New innovations stimulate the need for more advancement to facilitate further development

Sociocultural Forces

Sociocultural forces are the influences in a society and its cultures that bring about changes in people's attitudes, beliefs, norms, customs, and lifestyles

Technology

is the application of knowledge and tools to solve problems and perform tasks more efficiently o Grows out of researched performed by businesses, universities, government agencies, and nonprofit organizations. More than half paid for by the government which supports research in such diverse areas as health, defense, agriculture, energy and pollution Technological growth of the last several decades is expected to accelerate

Marketing Costs Consume a Sizable Portion of Buyers' Dollars

• About one half of a buyer's dollar goes toward marketing costs. If you spend 16 dollars on a new CD, 50 to 60 percent goes towards marketing expenses, including promotion and distribution, as well as profit margins.

Competitive Forces

• Few firms if any operate free from competition. Managers must consider the type of competitive structure in which the firm operates.

business cycle

• Fluctuations in the economy follow a general pattern, which consists of four stages: prosperity, recession, depression and recovery. o Different parts of the world may be in different stages of the business cycle during the same period. 1990s Us was going through prosperity, then began to slow in 2000 with a brief recession. Japan, however, endured a recession during most of the 1990s and into the early 2000s.

Marketing is Used in Nonprofit Organizations

• Government agencies at the federal, state, and local levels engage in marketing activities to fulfill their mission and goals. o CDC has promoted its new book about international health risks trough its websites for travelers' health. Universities and colleges engage in marketing activities to recruit new students as well as to obtain donations from alumni and businesses. • Red Cross provides disaster relief throughout the world and offers promotional messages to encourage donations to support their efforts.

Greenwashing

• Greenwashing occurs when products are promoted as being more environmentally friendly than they are. Companies are increasingly selling products that they claim to be "green"

pricing

• In pricing, common ethical issues are price fixing, predatory pricing and failure to disclose the full price of a purchase

Marketing is Important to Businesses and the Economy

• Innovation in operations and products drive business success and customer loyalty. • Marketing activities help to produce the profits that are essential to the survival of individual businesses. Without profits, businesses would find it difficult, if not impossible, to buy more raw materials, hire more employees, attract more capital and create additional products that, in turn, make more profits. Without profits, marketers cannot continue to provide jobs and contribute to social causes.

Encouraging Compliance with Laws and Regulations

• Legal violations usually begin when marketers develop programs that unwittingly overstep legal bounds. o Some test the limits of certain laws by operating in a legally questionable way to see how far they can get with certain practices before being prosecuted. • 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 o many companies are encouraging their employees to take responsibility for avoiding legal misconduct themselves NYSE requires all member companies to have a code of ethics and some firms try to go beyond what is required by the law.

Price gouging

• Price gouging or pricing products at exorbitant levels and taking advantage of customers who must purchase the medicine to survive or to maintain their quality of life

The Product Orientation(Evolution of the Marketing Concept)

• Second half of the nineteenth century, the industrial revolution was in full swing in the US. Electricity, rail transportation, division of labor, assembly lines and mass production made it possible to produce goods more efficiently. Demand for manufactured goods was strong.

The Nature of Social Responsibility

• Social responsibility: refers to an organization's obligation to maximize its positive impact and minimize its negative impact on society o Deals with total effect of all marketing decisions on society o Includes managerial processes needed to monitor, satisfy, and even exceed stakeholder expectations and needs • Ample evidence shows that ignoring stakeholders' demands for responsible marketing can destroy customers' trust and even prompt government regulations o Ex) GlaxoSmithKline settled with US Justice Dept for 3 billion dollars after they were accused of defrauding Medicaid and marketing certain drugs illegally • Socially responsible activities can generate positive publicity and boost sales o Ex) IBM has established a corporate volunteer program that sends employees to developing countries to create opportunities for its citizens o Have a positive impact on local communities; at the same time, they indirectly help the sponsoring organization by attracting goodwill, publicity and potential customers and employees

Monopolistic competition

• exists when a firm with many potential competitors attempts to develop a marketing strategy to differentiate its product. Ex) Wrangler and Seven 4 All Mankind both sell jeans but they'll sell to different groups of people

target market

-Organizations generally focus their marketing efforts on a specific group of customers -may be a vast number of people or a relatively small group -Hispanics are becoming more important because their buying power will be really high in a few years

The distribution variable

-Products must be available at the right time and in convenient locations. There are more Subways than McDonald's now. -Marketing manager must make products available in the quantities desired to as many target-market customers as possible, keeping total inventory, transportation and storage costs as low as possible. may select and motivate intermediaries (wholesalers and retailers), establish and maintain inventory control procedures, and develop and manage transportation and storage systems. Advent of the internet and electronic commerce has dramatically influenced the distribution variable. • Companies can make their products available throughout the world without maintaining facilities in each country (Apple)

Customers

-are the focal point of all marketing activities -Organizations define their products not as what the companies make or produce but as what they do to satisfy customers

Marketing

-the process of creating, distributing, promoting, and pricing goods, services and ideas to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment

• Geographic Variables(Variables for Segmenting Consumer Markets)

o Climate, terrain, city size, population density, urban/rural areas o City size: some franchise restaurants will not locate in cities of fewer than 200,000 people. o metropolitan area: at least 50,000 in urbanized area and total metropolitan population of at least 100,000. They are categorized as one of the following: metropolitan statistical area: urbanized area encircled by nonmetropolitan counties and is neither socially nor economically dependent on any other metropolitan area primary metropolitan statistical area: within a complex of at least 1 million inhabitants or a consolidated metropolitan statistical area: at least 1 million that has two or more PMSAs. Five largest are New York, Los Angeles, Chicago, San Francisco and Philadelphia o Market density refers to the number of potential customers within a unit of land area, such as a squire mile. Generally relates to population density but not exact Two different geographic markets of approximately equal size and population, market density for office supplies would be much higher in one area if it contained a much greater proportion of business customers than the other area o Geodemographic segmentation clusters people in zip code areas and even smaller neighborhood units based on lifestyle and demographic information Allows marketers to engage in micromarketing: the focusing of precise marketing efforts on very small geographic markets, such as community and even neighborhood markets Providers of financial and health-care services, retailers, and consumer products companies use micromarketing o Climate is also commonly used as a geographic segmentation because of its broad impact on people's behaviors and product needs

• Psychographic variables(Variables for Segmenting Consumer Markets)

o Ex: personality characteristics, motives, and lifestyles to segment markets o Can be used by itself to segment a market or it can be combined with other types of segmentation variables o When appealing to personality characteristic, a marketer almost always selects one that many people view positively Marketers assume a sizable proportion of people in the target market either have it or want to have it o When motives are used to segment a market, the market is divided according to consumers' reasons for making a purchase o Lifestyle segmentation groups individuals according to how their spend their time, the importance of things in their surroundings (homes, jobs etc.), beliefs Most popular lifestyle framework is VALS from Strategic Business Insights Classifies consumers based on psychological characteristics

• Behavioristic Variables(Variables for Segmenting Consumer Markets)

o Firm can divide a market according to some feature of consumer behavior toward a product, commonly involving some aspect of product use o Benefit segmentation is the division of a market according to benefits that consumers want from the product Differs from other types of market segmentation in that the benefits customers seek are their product needs o How customers use/apply products may also determine the method of segmentation. To satisfy customers who use a product in a certain way, some feature may be designed precisely to make the product easier to use, safer, or more convenient o By determining the desired benefits, marketers may be able to divide people into groups seeking certain sets of benefits. Effectiveness of such segmentation depends on three things: 1. The benefits sought must be identifiable 2. Using these benefits, marketers must be able to divide people into recognizable segments 3. One or more of the resulting segments must be accessible to the firm's marketing efforts

• Demographic Variables(Variables for Segmenting Consumer Markets)

o Include age, gender, race, ethnicity, income, education, family size, family life cycle, religion and social class o Often linked to customers' needs and purchasing behaviors o Age is commonly used. Several clothing stores created new brands for their own stores to provide more mature clothing options to aging Generation Y customers Americans 65+ spend as much or more on housing and health care compared to Americans in the two younger age groups Numerous products are aimed specifically at children. Children ages 16 and under influence over 1.1 trillion dollars of overall family spending every year o Gender is another demographic often used to segment markets such as clothing, drinks, medications ,magazines, cigarettes, and care products Ex) deodorant. o Race and ethnicity is another variable used for segment marketing for products like food, music, clothing, cosmetics, banking and insurance o Income affects people's ability to buy and their desires for certain lifestyles o Family life cycle affects needs for housing, appliances, food and beverages, automobiles and recreational equipment Single parent families are on the rise, meaning that the typical family no longer consists of a married couple with children Since 1970, the number of households headed by a single mother increased from 12 to 19 percent of total family households Increase in median marrying age has increased from 20.8 to 27.5 years old and for men it is 23.2 to 28.7. The proportion of women ages 20 to 24 who have never been married as more than doubled over this time

depression

o Prolonged recession may become a, a period in which unemployment is extremely high, wages are very low, total disposable income is at a minimum, and consumers lack confidence in the economy. Usually lasts for an extended period, often years.

Opportunities

o conditions that limit barriers or provide rewards Employee who takes advantage of an opportunity to act unethically and is rewarded or suffers no penalty may repeat such acts as other opportunities arise Most marketing managers do not try to take advantage of every opportunity for unethical behavior in their organizations • Most of them don't think those decisions leads to success

Business market

o consists of individuals or groups that purchase a specific kind of product for one of three purposes: resale, direct use in producing other products or use in general operations Called B2B, business to business, industrial, or organizational markets

Consumer market

o consists of purchasers and household members who intend to consume or benefit from the purchased products and do not buy products for the main purpose of making a profit Sometimes called B2C markets, business to consumer We each belong to a number of consumer markets

Organizational relationships

o ethical choices in marketing are most often made jointly Organizational or corporate culture is a set of values, beliefs, goals, norms and rituals that members of an organization share Gives its members meaning and suggests rule for how to behave and deal with problems within the organization CEO or VP of marketing sets ethical tone for the entire marketing organization Coworkers' influence on an individual's ethical choices depends on the person's exposure to unethical behavior 45% of employees had observed one type of misconduct in the past year, 35% of them chose not report it

Codes of Conduct

o formalized rules and standards that describe what the company expects of its employees Must be periodically revised Most address specific ethical risk areas in marketing Promote ethical behavior by reducing opportunities for unethical behavior Should provide guidelines that enable employees to achieve objectives

Channel stuffing

o involves shipping surplus inventory to wholesalers and retailers at an excessive rate, typically before the end of a quarter May conceal declining demand for a product or inflate financial statement earnings, misleading investors

Counterfeiting

o market for fake or pirated goods is enormous, with an estimated global value of over 600 billion dollars To prevent, some companies have begun to invest in technology that can identify the authenticity of a product

Brand competitors

o market products with similar features and benefits to the same customers at similar prices. Ex) diet coke or diet Pepsi

Individual factors

o people often base their decisions on their own values and principles of right or wrong. People learn these values and principles through socialization by family members, social groups, religion and formal education Significant ethical diversity amongst employees

The promotion variable

relates to activities used to inform individuals or groups about the organization and its products. Promotion can aim to increase public awareness of the organization and of new or existing products. -Promotional activities can educate customers about product features or urge people to take a particular stance on a political or social issue, such as smoking or drug abuse -Promotion can help to sustain interest in established products

The price variable

relates to decisions and actions associated with establishing pricing objectives and policies and determining product prices. -Price is a critical component of the marketing mix because customers are concerned about the value obtained in an exchange. -It is often used as a competitive tool, and intense price competition sometimes leads to price wars

Green marketing

strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment o Ex) Safeway recognized Greenpeace as the supermarket chain with the most sustainable seafood buying practices. They discontinued sales of several threatened fish populations and promoted the formation of a marine reserve in the southern Antarctic oceans to protect Chilean sea bass, a red-list fish

Step 1: Identify the Appropriate Targeting Strategy (Target Market Selection Process)

three basic targeting strategies: undifferentiated, concentrated, and differentiated Undifferentiated Targeting Strategy: • When organization defines an entire market for a particular product as its target market. Company designs a single marketing mix and directs it at the entire market for a particular product, it is using an undifferentiated targeting strategy o Assumes all customers in the target market for a specific kind of product have similar needs, and thus the organization can satisfy most customers with a single marketing mix o Mix consists of one type of product, one price, one promotional program aimed at everybody, and one distribution system to reach most customers in the total market • Effective under two conditions o 1. Large proportion of customers in a total market must have similar needs for the product, a situation termed a homogeneous market o 2. Organization must be able to develop and maintain a single marketing mix that satisfies customers' needs Concentrated Targeting Strategy through Market Segmentation • Market made up of individuals or organizations with diverse product needs is called a heterogeneous market • Market segmentation is appropriate. The process of dividing a total market into groups, or segments that consist of people or organizations with relatively similar product needs o Enables a marketer to design a marketing mix that more precisely matches the needs of customers in the selected market segment: consists of individuals, groups, or organizations that share one or more similar characteristics that cause them to have relatively similar product needs • Main rationale is that a company is better able to develop a satisfying marketing mix for a relatively small portion of a total market than to develop a mix that meets the needs of all people • Ex) fast food chains, soft-drink companies, magazine publishers, hospitals, banks are few types of organizations that employ market segmentation • For market segmentation to succeed, 5 conditions must exist o 1. Customers' needs for the product must be heterogeneous o 2. Segments must be identifiable and divisible o 3. Total market should be divided so segments can be compared with respect to estimated sales potential, costs and profits o 4. At least one segment must have enough profit potential to justify developing and maintaining a special marketing mix for that segment o 5. Company must be able to reach the chosen segment with a particular marketing mix. Some marketing segments may be difficult or impossible to reach because of legal, social, or distribution constraints like Cuban rum and cigars • When an organization directs its marketing efforts toward a single market using one marketing mix, it is employing a concentrated targeting strategy. Ex) Porsche focuses on luxury sports car segments and directs almost all of its efforts towards those high income individuals • Chief advantage of concentrated strategy is that it allows a firm to specialize o Also means that a company puts all its eggs in one basket which can be hazardous Differentiated Targeting Strategy through Market Segmentation • With a differentiated targeting strategy, an organization directs its marketing efforts at two or more segments by developing a marketing mix for each segment • After firm uses concentrated strategy successfully in one market segment, it sometimes expands its efforts to include additional segments ex) Dove has been traditionally aimed towards women, now it's moving towards men • Marketing mixes for a differentiated strategy may vary as to product features, distribution methods, promotion methods and prices. Ex) Kate Spade used to be targeted at only suburban mothers in their 40s but now they are producing new products for women between 26-36. • Company with excess production capacity may find a differentiated strategy advantageous because the sale of products to additional segments may absorb excess capacity. o On the other hand it also demands more production processes, materials and people o May cost more than concentrated strategy

Improving Marketing Ethics

• "bad apple - bad barrel" analogy - some people always do things in their own self-interest, regardless of organizational goals or accepted moral standards; sometimes called bad apples. o They can use screening techniques and enforcement of the firm's ethical standards o "bad barrels" happen not because of the individuals within but because the pressures to survive and succeed create conditions that reward unethical behavior. To solve this you can redesign the organization's image and culture

Marketing Offers Many Exciting Career Prospects

• 22 - 33 percent of all civilian workers in the US perform marketing activities. • Offers a variety of interesting and challenging career opportunities throughout the world • Marketing positions are among the most secure positions because of the need to manage customer relationships.

• Consumerism

• A number of interest groups and individuals have taken action against companies they consider irresponsible by lobbying government officials and agencies, engaging in letter-writing campaigns and boycotts, and making public-service announcements • Some consumers choose to boycott firms/products to try to make a difference o Ex) consumer reaction had a significant impact on Verizon when it announced plans to charge customers a 2$ fee for paying their bills online or over the phone • Ralph Nader, one of the bets-known consumer activists, continues to crusade for consumer rights in areas such as seat belts, air bags, padded dashboard, stronger door latches, head restraints, shatterproof windshields and collapsible steering columns • Four basic rights spelled out in consumer "bill of rights" that was drafted by JFK o Right to safety o Right to be informed o Right to choose o Right to be heard

The Market Orientation(Evolution of the Marketing Concept)

• By 1950s some businesses realized that efficient production and extensive promotion did not guarantee that customers would buy their products. They found that they must first determine what customers want and then produce those products rather than making first then trying to sell. They then entered the marketing era. • Marketing orientation: requires the "organization wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and organization wide responsiveness to it." o Linked to new product innovation by developing a strategic focus to explore and develop new products to serve target markets ex) consumers like environmentally responsible products offered at fair prices o Trust, openness, honoring promises, respect, collaboration and recognizing the market as the raison d'etre are six values required by organizations striving to become more market oriented. o Marketing orientation involves being responsive to ever-changing customer needs and wants. Ex) eBay acquired the online platform Hunch to help the ecommerce site create better product recommendations for its users. Hunch uses online data to make predictions based on users' likes and interests. It follows buyers' online purchases and recommends related topics.

Political Forces

• Consumer Protection Act of 2010 was created o increase accountability and transparency in the financial industry. o Established a new Consumer Financial Protection Bureau to protect consumers from deceptive financial practices. • Marketing organizations strive to maintain good relations with elected and appointed officials for several reasons: o Political officials well disposed toward particular firms or industries are less likely to create or enforce laws and regulations unfavorable to those companies. o Government contracts can be very profitable o Political officials can play key roles in helping organizations secure foreign markets • Money marketers view political forces as beyond their control and simply adjust to conditions that arise from those forces. Some firms seek to influence the political process. o Organizations publicly protest the actions of legislative bodies o organizations help elect individuals to political offices who regard them positively o laws have limited corporate contributions to political campaign funds for specific candidates and company sponsored political advertisements could primarily focus only on tops and not on candidates. • Companies can also participate in the political process through lobbying to persuade public and/or government officials to favor a particular position in decision making

Community Relations

• Corporate philanthropy is on the rise. • Smaller firms can also make positive contributions to their communities • Being a good community citizen also manes avoiding harmful actions that could damage the community like pollution, urban sprawl and exploitation of the work force

Customer Relationship Management

• Customer relationship management (CRM) focuses on using information about customers to create marketing strategies that develop and sustain desirable customer relationships. Achieving the full profit potential of each customer relationship should be the fundamental goal of every marketing strategy. • Profits can be obtained through relationships in the following ways o 1. By acquiring new customers o 2. By enhancing the profitability of existing customers o 3. By extending the duration of customer relationships • Companies should also focus on regaining and managing relationships with customers who have abandoned the firm.

Marketing Connects People Through Technology

• Customers can provide feedback about their experiences over the phone or online. • More and more companies are adapting their operations to accept mobile payments. • Internet allows companies to provide tremendous amounts of information about their products to consumers and to interact with them through e-mail and websites. • Highest amount of internet activities of US citizens - email, search engine and portals, social networks, new sports and entertainment, music and videos, weather and other.

discretionary income

• Disposable income that is available for spending and saving after an individual has purchased the basic necessities is called. o People use this to purchase entertainment, vacation, automobiles education, pets, furniture, appliances and so on.

The Sales Organization(Evolution of the Marketing Concept)

• During the first half of the twentieth century competition increased and businesses realized that they would have to focus more on selling products to buyers. • Businesses viewed sales as the major means of increasing profits and this period came to have a sales orientation Businesspeople believed that the most important marketing activities were personal selling, advertising and distribution. Today, many people incorrectly equate marketing with a sales orientation.

Environmental Scanning and Analysis

• Environmental scanning is the process of collecting information about forces in the marketing environment o Involves observation; secondary sources such as business, trade, government, and general-interest publications; and marketing research. o Internet is a popular scanning tool o Managers need to be careful not to gather so much information that sheer volume makes analysis impossible • Environmental analysis is the process of assessing and interpreting the information gathered through environmental scanning o Manager evaluates information for accuracy, tries to resolve inconsistencies in the data and if warranted, assigns significance to the findings o Should enable the manager to identify potential threats and opportunities linked to environmental changes Threat could be rising interest rates or commodity prices. An opportunity could be increases in consumer income, decreases in the unemployment rate, or adoption of new technology

Ethical Issues in Marketing

• Ethical issue is an identifiable problem, situation, or opportunity that requires an individual or organization to choose from among several actions that must be evaluated as right or wrong, ethical or unethical • Any time an activity causes marketing managers or customers in their target market to feel manipulated or cheated, a marketing ethical issue exists, regardless of the legality of activity ex) 0 trans fat on the label but there are trans fats in Girl Scout cookies • Product recalls occur when companies ask customers to return products found to be defective o The companies are often criticized for not having adequate quality controls to catch the product before it was released

Incorporating Social Responsibility and Ethics into Strategic Planning

• Ethics relates to individual and group decisions - judgments about what is right or wrong in a particular decision-making situation - whereas social responsibility deals with the total effect of marketing decisions on society • Rule of thumb for resolving ethical and social responsibility issues is that if an issue can withstand open discussion that results in agreement or limited debate, an acceptable solution must exist

Understanding the Marketing Concept

• Firms that define their business as "making product" rather than as "helping potential customers satisfy their needs and wants" often fail • Marketing concept: an organization should try to provide products that satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals. o Customer satisfaction is the major focus of the marketing concept o Organization must strive to determine what buyers want and uses this information to develop satisfying products o Focus on customer analysis, competitor analysis and integration of the fir's resources to provide customer value and satisfaction o This is a management philosophy guiding an organization's overall activities o Stresses that an organization can best achieve objectives by being customer oriented. o Marketers must also consider the long-term needs of society

Social Responsibility and Ethics Improve Marketing Performance

• Increasing evidence indicates that being socially responsible and ethical results in increased profits • Relationship exists between a stakeholder orientation and an organizational climate that supports marketing ethics and social responsibility • A direct association exists between corporate social responsibility and customer satisfaction, profits, and market value • Recognition is growing that the long-term value of conducting business in an ethical and osciall responsible manner far outweighs short-term costs

Regulatory Agencies

• Influence many marketing activities, including product development, pricing, packaging, advertising, personal selling, and distribution. • Of all the federal regulatory units, the Federal Trade Commission (FTC) most heavily influences marketing activities o Allocates a large portion of resources to curbing false advertising, misleading pricing and deceptive packaging and labeling Filed charges against Reebok for making false claims regarding its Easy Tone walking shoes, flip flops and Run Tone shoes o When it has a reason to believe a firm is violating a law, the commission typically issues a complaint stating that the business is in violation and takes appropriate action • Can issue a cease and desist order demanding that the business stop doing whatever caused the complaint • Firm can appeal to have the order rescinded. However, FTC can civil penalties in court, up to a maximum penalty of 10000 dollars a day for each infraction if a cease and desist order is violated • FTC also assists businesses in complying with laws and evaluates new marketing methods every year • Unlike the FTC, other regulatory units are limited to dealing with specific products, services, or business activities. • All states as well as many cities and towns, have regulatory agencies that enforce laws and regulations regarding marketing practices within their states or municipalities

Responding to Environmental Forces

• Managers take two general approaches to environmental forces: accepting them as uncontrollable or attempting to influence and shape them. • Organization that views environmental forces as uncontrollable remains passive and reactive toward the environment. o Managers adjust strategies to environmental changes o Approach with caution market opportunities discovered through environmental scanning and analysis • Marketing managers who believe environmental forces can be shaped adopt a more proactive approach o Ex) if a market is blocked by traditional environmental constraints, proactive marketing managers may apply economic, psychological, political and promotional skills to gain access to and operate within it. They assess the power of the various parties involved and develop strategies to overcome the obstructing environmental forces. Microsoft, Intel and Google have responded to political, legal and regulatory concerns about their power in the computer industry by communicating the value for their competitive approaches to various publics. • Proactive approach can be constructive and bring desired results. o Political action can affect environmental forces. Ex) pharmaceutical industry has lobbied effectively for fewer restrictions o prescription drug marketing o Managers must recognize that there are limits to the degree that environmental forces can be shaped. It is unlikely that a single organization can significantly change major economic factors such as recessions, interest rates or commodity prices. o For some organizations the passive, reactive approach is more appropriate, but for others the aggressive approach leads to better performance.

Customer Lifetime Value

• Managing customer relationships requires identifying patterns of buying behavior and using that information to focus on the most promising and profitable customers. • A customer's value over a lifetime represents an intangible asset to a marketer that can be augmented by addressing the customer's varying needs and preferences at different stages in his or her relationship with the firm. o In general, when marketers focus on customers chosen for their lifetime value, they earn higher profits in future periods than when they focus on customers selected for other reasons • Ability to identify individual customers allows marketers to shift their focus from targeting groups of similar customers to increasing their share of an individual customer's purchases. • Emphasis changes from share of market to share of customer. o Most basic application of this idea is the 80/20 rule: 80 percent of business profits come from 20 percent of customers. The goal is to assess the worth of individual customers and thus estimate their lifetime value tot eh company. • The concept of customer lifetime value may include not only an individual's tendency to engage in purchases but also his or her strong word-of-mouth communication about the company's products. • CLV is a key measurement that forecasts a customer's lifetime economic contribution based on continued relationship marketing efforts. o It can be calculated by taking the sum of the customer's present value contributions to profit margins over a specific time frame

disposable income

• Marketers are most interested in the amount of money left after payment of taxes because this is used for spending or saving o It is a ready source of buying power, the total amount available in a nation is important to marketers • Several factors determine the size of total disposable income. o One is the total amount of income, which is affected by wage levels, the rate of unemployment, interest rates, and dividend rates. o When taxes rise, disposable income declines; when taxes fall, disposable income increases

Marketing Ethics

• Marketers should be aware of stakeholders including customers, employees, regulators, supplier and the community o If the marketing activities deviate from accepted standards, the exchange process can break down, resulting in customer dissatisfaction, lack of trust, and lawsuits • Recent studies show that 50% of US consumers trust businesses today. Lack of trust has increased in recent years due to financial crisis and deep recession

Examining and Responding to the Marketing Environment

• Marketing environment consists of external forces that directly/indirectly influence an organization's acquisition of inputs (human, financial, natural resources and raw materials and information) and creation of outputs (goods, services or ideas) • Environmental forces can fluctuate rapidly or slowly and are always dynamic. o Changes in the marketing environment create uncertainty, threats and opportunities for marketers.

Marketing Occurs in a Dynamic Environment

• Marketing environment: includes competitive, economic, political, legal and regulatory, technological, and sociocultural forces, surrounds the customers and affects the marketing mix o effects buyers and sellers dramatically and difficult to predict. o Influence customers by affecting their lifestyles, standards of living, and preferences and needs for products. o Because a marketing manager tries to develop and adjust the marketing mix to satisfy customers, effects of environmental forces on customers also have an indirect impact on marketing-mix components o Marketing environment forces help to determine whether and how a marketing manager can perform certain marketing activities o Environmental forces may affect a marketing manager's decision and actions by influencing buyers' reactions to the firm's marketing mix o Can fluctuate quickly and dramatically. Because these forces are closely interrelated, changes in one may cause changes in others

Monitoring Competition

• Necessary to determine what strategies competitors are using and how those strategies affect their own • Price is one marketing strategy variable that most competitors monitor • Firm must develop a system for gathering ongoing information about competitors and potential competitors. o Information about competitors allows marketing managers to assess the performance of their own marketing efforts and to recognize the strengths and weaknesses in their own marketing strategies o • Organizations are rewarded for taking risks and dealing with the uncertainty created by inadequate information

Consumer Protection Legislation

• Not a recent development. 1800s, lawmakers in many states passed laws to prohibit adulteration of food and drugs. • Concerns about companies' online collection and use of personal information, especially about children, resulted in the passage of the Children's Online Privacy Protection Act (COPPA) which prohibits websites and Internet providers from seeking personal information about children under age 13 without parental consent. • Consumer protection laws at the federal level mushroomed in the 60s and 70s. a number of them deal with consumer safety, such as the food and drug acts and some laws deal with prohibiting the sale of various hazardous products such as flammable fabrics and toys that may injure children and automobile safety. • More recent consumer protection legislation is the Credit Card Accountability, Responsibility and Disclosure Act of 2009, which restricts credit card companies' ability to change interest rates, charge unfair late fees, use complicated or unclear wording in their terms, and issue credit to individuals under 21.

Procompetitive Legislation

• Procompetitive laws are designed to preserve competition, enacted to end various antitrade practices deemed unacceptable by society o Sherman Antitrust Act - passed in 1890 to prevent businesses from restraining trade and monopolizing markets o Illegal anticompetitive practices include stealing trade secrets or obtaining other confidential information from a competitor's employees, trademark and copyright infringement, price fixing, false advertising and deceptive selling methods such as "bait and switch" and false representation of products • Laws have also been created to prevent businesses from gaining an unfair advantage through bribery. o US Foreign Corrupt Practices Act prohibits American companies from making illcit payments to foreign officials in order to obtain or keep business.

Relationship Marketing

• Relationship marketing refers to "long-term, mutually beneficial arrangements in which both the buyer and seller focus on value enhancement through the creation of more satisfying exchanges." o Continually deepens the buyer's trust in the company • Successful marketers respond to customer needs and strive to increase value to buyers over time. Eventually this interaction becomes a solid relationship that allows for cooperation and mutual dependency. Ex) Whole Foods has implemented relationship marketing with the view that customers are its most important stakeholder. • Relationship marketing strives to build satisfying exchange relationships between buyers and sellers by gathering useful data at all customer contact points and analyzing that data to better understand customers' needs, desires and habits. • Airline industry is a key player in CRM efforts with frequent-flyer programs. • Customer relationship management provides a strategic bridge between information technology and marketing strategies aimed at long-term relationships.

Step 2: Determine Which Segmentation Variable to Use

• Segmentation variables are the characteristics of individuals, groups, or organizations used to divide a market into segments. o Location, age, gender and rate of product usage can all be bases for segmenting markets. Most marketers use variables in combination o To select a segmentation variable, several factors are considered. Should relate to customers' needs for, uses of, or behavior toward the product • Choosing one or more segmentation variables is a critical step in targeting a market. Selecting an inappropriate variable limits the chances of developing a successful marketing strategy

marketing citizenship

• Socially responsible organizations strive for marketing citizenship by adopting a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities that their stakeholders expect of them • Companies that consider the diverse perspectives of stakeholders in their daily operations and strategic planning are said to have a stakeholder orientation, an important element of social responsibility. o Stakeholder orientation goes beyond customers, competitors, and regulators to include understanding and addressing the needs of all stakeholders, including communities and special-interest groups o Ex) Pfizer has secured stakeholder input on a number of issues including rising health-care costs and health-care reform • At most basic level companies have an economic responsibility to be profitable so that they can provide a return on investment to their owners and investors, create jobs for the community, and contribute goods and services • Marketers also have an economic responsibility to engage in fair competition and build ethical customer relationships • Failure to consider economic and legal responsibilities may mean that a marketer is not around long enough to engage in ethical or philanthropic activities

Self-Regulatory Forces

• Some businesses try to regulate themselves. • Best known self-regulatory group is the Better Business Bureau (BBB), which is a system of nongovernmental, independent, local regulatory agencies that are supported by local businesses o 150+ bureaus help settle problems between consumers and specific business firms o Each bureau asks to preserve good business practices in a locality, al o The bureau warns consumers through local newspapers and broadcast media if you violate what they believe to be good business o Council of Better Business Bureaus is a national organization composed of all local Better Business Bureaus • National Advertising Division (NAD) of the council operates a self-regulatory program that investigates claims regarding alleged deceptive advertising • National Advertising Review Board (NARB) considers cases in which an advertiser challenges issues raised by the NAD about an advertisement. Cases are reviewed by panels drawn from NARB members that represent advertisers, agencies, and the public • Self-regulatory programs have several advantages over governmental laws and regulatory agencies o Establishment and implementation are usually less expensive, and guidelines are generally more realistic and operational o Effective self-regulatory programs reduce the need to expand government bureaucracy o They have several limitations however. When a trade association creates a set of industry guidelines for its members, nonmember firms do not have to abide by them Lack the tools or authority to enforce guidelines Guidelines in self-regulatory programs often less strict than those established by government agencies

strategic philanthropy

• Some companies are beginning to extend the concept of corporate philanthropy beyond financial contributions by adopting a strategic philanthropy approach, the synergistic use of organizational core competencies and resources to address key stakeholders' interests and achieve both organizational and social benefits o Involves employees, organizational resources and expertise, and the ability to link those assets to the concerns of key stakeholders, including employees, customers, suppliers, and social needs o Involves both financial and nonfinancial contributions to stakeholders while also benefiting the company Ex) salesforce.com believes in the benefits of strategic philanthropy so strongly that it incorporates community service into its corporate culture

Ethical Dimensions of Managing Supply Chain Relationships

• Supply chains require constant vigilance on the part of marketers as well as the need to anticipate unforeseen circumstances • Lots of companies have factories outside the country which require audits to ensure that factories are following compliance standards o China and Russia have lax labor laws which require even more diligent monitoring • Developing good supply chain ethics is important because it ensures the integrity of the product and the firm's operations in serving customers. o Vendor grievance and feedback system allowing vendors to report potential problems before they reach the next level of the supply chain • Essential for all companies that work with global suppliers to adopt a Global Supplier Code of Conduct

Implementing the Marketing Concept(Evolution of the Marketing Concept)

• To implement the marketing concept, a market oriented organization must accept some general conditions and recognize and deal with several problems. o Management must first establish an information system to discover customer's real needs and then use the information to create satisfying products. o Listening and responding to consumers' frustrations and appreciation is the key in implementing the marketing concept. o An information system is usually expensive; management must commit money and time for its development and maintenance. Without an adequate information system however, an organization cannot be market oriented. • Company must coordinate all of its activities o Requires the firm to adapt to a changing external environment. Amazon continued to thrive even after the majority of Internet companies failed after the .com bubble burst in 2000. Continues to expand its products and services and add new features to its website to better serve its customers and had created a website customized to their wants

Marketing Knowledge Enhances Consumer Awareness

• Today the consumer has more power from information through websites, social media and required disclosure. • In general you have more accurate information about a product before you purchase it than at any other time in history. • Understanding marketing enables us to evaluate correct measures that could stop unfair, damaging or unethical marketing practices.

Marketing Creates Value

• Value is an important element of managing long-term customer relationships and implementing the marketing concept. • Value is the customer's subjective assessment of benefits relative to costs in determining the worth of a product (customer value = customer benefits - customer costs). • Customer benefits include anything a buyer receives in an exchange. Customer costs including anything a buyer must give up to obtain the benefits the product provides. • Customer costs include anything a buyer must give up to obtain the benefits the product provides. The most obvious is the monetary price of the product but nonmonetary costs can be equally important in a customer's determination of value. o Two nonmonetary costs are time and effort To reduce this, company can increase product availability o another nonmonetary cost is risk which can be reduced by offering god basic warranties or extended warranties for additional change

Marketing Fuels our Global Economy

• as a result of worldwide communications and increased international travel, many US brands have achieved widespread acceptance around the world. • Electronic commerce via the Internet now enables businesses of all sizes to reach buyers worldwide.

Buying Power

• depends on economic conditions and the size of the resources - money, goods, and services that can be traded in an exchange - that enable the individual to make purchases

recovery

• economy moves from recession or depression toward prosperity. o High unemployment begins to decline, total disposable income increases and the economic gloom that reduced consumers' willingness to buy subsides o In this stage, marketers should maintain as much flexibility in their marketing strategies as possible so they can make the needed adjustments

Credit

• enables people to spend future income now or in the near future. o Increases current buying power at the expense of future buying power. o Several factors determine whether people use, acquire, or forgo credit. 1. Credit must be available. Interest rates also affect buyers' decisions to use credit, especially for expensive purchases such as homes, appliances, and automobiles. When interest rates are low, the total costs of automobiles and houses becomes more affordable. IN 2000s, low interest rates induced buyers to take on the high level of debt necessary to own a home, fueling a tremendous boom in the construction of new homes and the sale of older homes.

Oligopoly

• exists when a few sellers control the supply of a large proportion of a product. o Each seller considers the reactions of other sellers to changes in marketing activities o Products facing oligopolistic competition may be homogeneous, such as aluminum, or differentiated, such as packaged delivery services.

Monopoly

• exists when an organization offers a product that has no close substitutes, making that organization the sole source of supply o Controls the supply of the product completely and as a single seller, can erect barriers to potential competitors o Most monopolies today are local utilities, which are heavily regulated by local, state, or federal agencies. Tolerated because of the tremendous financial resources needed to develop and operate the,

Pure competition

• if it existed at all, would entail an extremely large number of sellers, none of which could significantly influence price or supply. Products would be homogenous and entry into the market would be easy. o Close example is an unregulated farmer's market Ideal at one end of the continuum, and a monopoly is at the other end.

willingness to spend

• their inclination to buy because of expected satisfaction from a product - is, to some degree, related to their ability to buy. • Factors that affect consumers' general willingness to spend are expectations about future employment, income levels, prices, family size, and general economic conditions. o Willingness to spend ordinarily declines if people are unsure whether or how long they will be employed, and it usually increases if people are reasonably certain of higher incomes in the future, o Expectations of rising prices in the near future may also increase willingness to spend. One reason for this is that as the size of a family increases, more dollars must be spent to provide the basic necessities to sustain family members

prosperity

• total income is relatively high and unemployment is low. o Assuming a low inflation rate, this combination ensures high buying power o Consumers generally willing to buy, marketers often expand their product offerings to take advantage of increased buying power

Recession

• unemployment rises and total buying power declines o Usually accompanies consumer pessimism o Customers may become more price and value conscious, and look for basic, functional products. Ex) when buying power went down, department store sales dropped and people would go to off-[rice retailers like TJ Maxx and Ross. o Some firms make the mistake of reducing their marketing efforts

Marketing Builds Relationships with Customers and Other Stakeholders

• individuals and organizations engage in marketing to facilities exchanges, the provision or transfer of goods, services, or ideas in return for something of value. o Any product, (good service or idea) may be involved in a marketing exchange • Four conditions must exist for an exchange to take place o 1. 2 or more individuals, groups or organizations must participate, and each must possess something of value that the other party desires o 2. The exchange should provide a benefit or satisfaction to both parties involved in the transaction o 3. Each party must have confidence in the promise of "something of value" held by the other o 4. The parties to the exchange must meet expectations

Wealth

• is the accumulation of past income, natural resources, and financial resources. It exists in many forms, including cash, securities, savings accounts, jewelry, and real estate. o Exists in many forms, including cash, securities, savings accounts, jewelry and real estate. o Huge growth in millionaires in the past few years, spearheaded by Asia. o Wealth is unevenly distributed. A person can have a high income and very little wealth. Also possible, however unlikely, for a person to have great wealth but little income.

marketing ethics

• marketing ethics: principles and standards that define acceptable conduct in marketing as determined by various stakeholders, including the public, government regulators.. etc. • At the top of the pyramid of corporate responsibility are philanthropic responsibilities o Not required but they promote human welfare or goodwill, as do the economic, legal and ethical dimensions of social responsibilities Many firms link their products to a particular social cause on an ongoing or short-term basis, a practice known as cause-related marketing. Ex) General Mills has implemented its Box Tops for Education program to raise money for schools

Competition

• other organizations that market products that are similar to or can be substituted for a marketer's products in the same geographic area

Surveys(Sales forecast)

Customer forecasting survey, marketers ask customers what types and quantities of products they intend to buy during a specific period • Good for company with few customers Sales force forecasting survey: firm's salespeople estimate anticipated sales in their territories for a specific period Expert forecasting survey: hires professionals to help prepare the sales forecast, usually economists, management consults, advertising execs, college professors Delphi Technique: experts create initial forecasts, submit them to company for averaging, and have the results returned so they can make individual refined forecasts

Sales forecast(Select Specific Target Markets)

: amount of a product the company expects to sell during a specific period at a specified level of marketing activities o Concentrates on what actual sales will be at a certain level of company marketing effort, whereas company sales potential assesses what sales are possible at various levels of marketing activities

Time Series Analysis(Sales forecast)

: forecaster uses firm's historical sales data to discover a pattern or patterns in the firm's sales over time Trend analysis: focuses on aggregate sales data, such as company's annual sales figures, covering a period of many years to determine whether annual sales are general rising, falling, or staying about the same Cycle analysis: forecaster analyzes sales figures for a three to five year period to ascertain whether sales fluctuate in a consistent, periodic manner Seasonal analysis: studies daily, weekly, or monthly sales figures to evaluate the degree to which seasonal factors, such as climate and holiday activities, influence sales Random factor analysis: forecaster attempts to attribute erratic sales variations to random, nonrecurring events, such as regional power failure, a natural disaster, political unrest

Regression Analysis(Sales forecast)

forecaster seeks to find a relationship between past sales and one or more independent variables such as population, per capita income, or gross domestic product.

Market Tests(Sales forecast)

involves making a product available to buyers in one or more test areas and measuring purchases and consumer responses to distribution, promotion and price. Test areas are often cities with populations of 200,000 to 500,000 but they can be larger metropolitan areas or towns with populations of 50,000 to 20,000 Provides information about consumers' actual rather than intended purchases

• Geographic Location(Variables for Segmenting Business Markets)

o Demand for business products vary according to geographic location. Ex) producers of certain types of lumber divide their markets geographically because their customers' needs vary from region to region

• Types of Organization(Variables for Segmenting Business Markets)

o Different types of organizations often require different product features, distribution systems, price structures, and selling strategies o A carpet producer, for example, could segment potential customers into several groups, such as automobile makers, commercial carpet contractors, apartment complex developers, carpet wholesalers, and large retail carpet outlets

• Customer Size(Variables for Segmenting Business Markets)

o Organization's size may affect its purchasing procedures and the types and quantities of products it wants o Size can thus be an effective variable for segmenting a business market o Ex) if customers buy in extremely large quantities, they can be offered discounts o Marketers can offer personal selling efforts to serve large organizational buyers properly

• Product use(Variables for Segmenting Business Markets)

o Raw materials are used in numerous ways, how a company uses products affects the types and amounts of products purchased o Computers are used for a bunch of different purposes

Generic competitors

o provide very different products that solve the same problem or satisfy the same basic customer need. Our dieter, for example, might simply have a glass of water from the kitchen to tap to satisfy her thirst

Executive judgment(Sales forecast)

the intuition of one more more executives Expedient, inexpensive, unscientific. Could be overly optimistic or overly pessimistic

Breakdown approach(Evaluate Relevant Market Segments)

the marketing manager first develops a general economic forecast for a specific time period • Next manager estimates market potential based on this economic forecast • Manager derives company's sales potential from the general economic forecast and estimate of market potential

Cost Estimates(Evaluate Relevant Market Segments)

• Developing/maintaining marketing mix can be expensive. • Consideration of product features, attractive package design, promotional offers, competitive offers may be high so marketer may conclude that the market segment is inaccessible. • Another cost consideration is whether the organization can effectively reach segment at costs equal to or below competitors' costs

Step 5: Select Specific Target Markets

• If customer wants are homogeneous, firm may decide to use the undifferentiated approach

Competitive Assessment(Evaluate Relevant Market Segments)

• Important to assess competitors that are already operating in the segments being considered

Step 3: Develop Market Segment Profiles

• Market segment profile describes similarities among potential customers within a segment and explains the differences among people and organizations in different segments o Covers demographic characteristics, geographic factors, product benefits sought, lifestyles, brand preferences and usage rates o Used to assess the degree to which their possible products can match or fit potential customers' product needs o Benefits marketers in several ways

Step 4: Evaluate Relevant Market Segments

• Sales Estimates o Market potential: total amount of a product that customers will purchase within a specified period at a specific level of industry wide marketing activity Stated in terms of dollars or units. Segment's market potential is affected by economic, sociocultural, and other environmental forces o Company sales potential is the maximum percentage of market potential hat an individual firm within an industry can expect to obtain for a specific product. Several factors influence company sales potential for a market segment: 1. Market potential places absolute limits on the size of the company's sales potential 2. Magnitude of industry wide marketing activities has an indirect but definite impact on the company's sales potential • Have a direct bearing on the size of the market potential 3. Intensity and effectiveness of a company's marketing acitvities relatiev to competitors' activities affect the size of the company's sales potential • If a company spends twice as much as any of its competitors on marketing efforts and if each dollar spent is more effective in generating sales, the firm's sales potential will be quite high compared to competitors'

income

• the amount of money received through wages, rents, investments, pensions, and subsidy payments for a given period, such as a month or a year. o Normally this money is allocate among taxes, spending for goods and services, and savings o Median annual household income is approx 49445 dollars.

Sustainability

• the potential for the long-term well-being of the natural environment, including all biological entities, as well as the interaction among nature and individuals, organizations, and business strategies o Includes assessment and improvement of business strategies, economic sectors, work practices, technologies and lifestyles - all while maintaining the natural environment o Many companies moving towards eco-friendly business practices like Walmart who has taken steps to reduce waste and decrease greenhouse gas emissions in its supply chain • Many products labeled as "green" by Green Seal and carry a special logo ex) Home Depot lumber and most Chiquita bananas • Some environmentalists and marketers believe companies should work to protect and preserve the natural environment by implementing the following: o Eliminate the concept of waste o Reinvent the concept of a product o Make prices reflect the cost o Make environmentalism profitable