Chapter 3: Analyzing the Marketing Environment
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Questions and Answers

Which of the following best describes how fluctuations in foreign currency exchange rates can affect a firm?

  • They can impact the firm's ability to market goods and services. (correct)
  • They solely impact raw material costs, not sales.
  • They have no significant impact on the firm's ability to market goods and services.
  • They only affect domestic sales and have no bearing on overseas markets.

If the Canadian dollar is low compared to other currencies, what is a common effect on tourism in Canada?

  • Domestic Canadian tourism will increase.
  • Tourists from other countries may be more inclined to shop in Canada. (correct)
  • Fewer tourists will visit Canada due to the weak currency.
  • There will be no change in tourist activity.

Which of the following IS NOT an example of a legislative act that impacts businesses in Canada?

  • Consumer Packaging and Labelling Act.
  • Food and Drugs Act.
  • Building Code Act (correct)
  • North American Free Trade Agreement.

What is the primary purpose of a company's core competency?

<p>To satisfy customer needs. (D)</p> Signup and view all the answers

Which term best describes the trend of home appliances becoming more interconnected and capable of assisting with daily tasks?

<p>Internet of things. (A)</p> Signup and view all the answers

Which of the following best describes a company's capabilities in the context of its immediate environment?

<p>The unique skills, processes, and resources a company possesses. (D)</p> Signup and view all the answers

Which of the following is NOT considered a component of a company's capabilities?

<p>The company's social media accounts (A)</p> Signup and view all the answers

What is a key role of social and natural trends in the business environment?

<p>Shape consumer values and beliefs. (D)</p> Signup and view all the answers

Which of these was a key factor in Bulldog Skincare's initial success?

<p>Their focus on producing high-quality natural products for men (B)</p> Signup and view all the answers

What is a primary focus of the United Nations' 17 Global Goals of Sustainable Development?

<p>Transforming the world towards sustainability. (A)</p> Signup and view all the answers

Why is it important for businesses to continuously monitor their environments?

<p>To adapt to changing circumstances and consumer behaviour. (C)</p> Signup and view all the answers

When a company develops a robotic vacuum, what is the most important factor to consider?

<p>Consumer's daily chores in the house (C)</p> Signup and view all the answers

What does a business use competitive intelligence (CI) for?

<p>To collect and synthesize information about competitors. (D)</p> Signup and view all the answers

What does the acronym CDSTEP refer to in the context of business environments?

<p>Cultural, Demographic, Social, Technological, Economic, and Political factors. (B)</p> Signup and view all the answers

Which Act specifically relates to how businesses access information?

<p>Access to Information Act (C)</p> Signup and view all the answers

Which of these is NOT a microenvironmental factor?

<p>Technological advances (B)</p> Signup and view all the answers

Which of the following is the best example of a company's capabilities?

<p>A company's ability to efficiently produce and distribute its products. (A)</p> Signup and view all the answers

How does technology impact consumer behavior and market demands?

<p>Technology can reshape how consumers shop and changes the nature and variety of demands. (C)</p> Signup and view all the answers

What does the content suggest about firms working in isolation?

<p>It is rare due to the prevalence of alliances and partnerships. (D)</p> Signup and view all the answers

What strategy does Bulldog Skincare's focus on sustainability demonstrate?

<p>An alignment with environmental concerns of consumers (D)</p> Signup and view all the answers

What does the section about 'Country Culture vs Culture' most likely suggest?

<p>The importance for companies to be aware of both broader and specific cultural factors. (A)</p> Signup and view all the answers

What should businesses do in response to technological advancements?

<p>Rethink how they offer products &amp; services to consumers (A)</p> Signup and view all the answers

In the context of a company's immediate environment, what is the role of corporate partners?

<p>To collaborate on projects, products, or initiatives. (D)</p> Signup and view all the answers

How does Bulldog Skincare demonstrate sustainability?

<p>Through its range of bamboo razor products. (B)</p> Signup and view all the answers

Flashcards

Core Competency

A company's primary strength or special ability. It's what sets them apart from competitors.

Competitive Intelligence

The process of gathering and analyzing information about competitors to understand their strengths, weaknesses, strategies, and goals.

Competitor

Any organization or individual that offers products or services that are similar to or compete with those of the company in question.

Marketing Environment Analysis

The process of identifying, understanding, and responding to the various forces that can influence a company's performance.

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Microenvironment

The internal factors that influence a company's marketing strategies, including its resources, capabilities, and organizational structure.

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Macroenvironment

Factors outside the company's direct control that pose opportunities or threats to its success. These include the economy, technology, culture, and more.

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Target market

The consumers or potential customers who are most likely to buy a company's products or services and for whom marketing efforts are targeted.

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Company capabilities

The company's internal capabilities, resources, and expertise that are relevant to satisfying customer needs.

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Immediate Environment

These are the direct influences on a company's operations, such as suppliers, distributors, customers, and competitors.

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Culture

The overall values, beliefs, attitudes, and behaviors of a particular society.

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Economic factors

The factors related to the global economy, such as interest rates, inflation, and unemployment.

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Technological factors

The factors related to the development and application of new technologies, such as the internet, mobile devices, and artificial intelligence.

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Political factors

The factors related to the political climate and government regulations, such as taxes, tariffs, and environmental regulations.

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Environmental factors

The factors related to the natural environment, such as climate change, resource scarcity, and pollution.

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Foreign Currency Fluctuations

Fluctuations in exchange rates between different currencies, influencing a company's ability to trade goods and services internationally.

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Competition Act

A law that prohibits certain business practices deemed harmful to competition, promoting fair competition and consumer protection.

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Consumer Packaging and Labelling Act

A law that regulates the labeling, packaging, and safety of consumer products, ensuring clear and accurate information for consumers.

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Food and Drugs Act

A law that regulates the safety and effectiveness of food and drugs sold in Canada, safeguarding public health.

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Access to Information Act

A law promoting transparency and access to government information, empowering citizens.

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Patent Act

A law that grants exclusive rights to inventors for their inventions, encouraging innovation and protecting intellectual property.

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North American Free Trade Agreement (NAFTA)

A trade agreement signed by Canada, Mexico, and the United States, eliminating tariffs and promoting free trade between the three countries.

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External Environment

Economic factors, political regulations, social trends, and technological advancements that impact businesses. Often known as PESTLE analysis.

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Study Notes

Chapter 3: Analyzing the Marketing Environment

  • This chapter analyzes the marketing environment, emphasizing the importance of monitoring both internal and external environments.
  • Technology significantly influences consumer buying behaviors and demands.
  • Businesses need to adapt their product & service offerings to meet evolving consumer needs.
  • A comprehensive marketing environment analysis framework is presented.

Marketing Environment Analysis Framework

  • The framework includes internal and external factors.

  • Microenvironment: Focuses on elements directly affecting the company:

    • Company capabilities: Core competency is satisfying customer needs using available knowledge, facilities, technology, patents and personnel. This competency is applied to target markets and products.
    • Consumers: Crucial to understanding their needs and desires.
    • Corporate partners: Firms often collaborate with suppliers and other partners.
    • Competition: Understanding direct and indirect competitors is key, including their strengths, weaknesses and using competitive intelligence in analysis.

  • Macroenvironment: Broader factors influencing the company:

    • Culture: Understanding cultural nuances, both across countries and regional differences within a single country (e.g., Coca-Cola ads).
    • Demographics: Characteristics like age, gender, and race, and their impact on consumer markets and preferences.
    • Political/Legal: Relevant legislation like the Competition Act, Consumer Packaging and Labelling Act, Food and Drugs Act, Access to Information Act, Patent Act and NAFTA impact operations and strategies.
    • Economic: Foreign currency fluctuations, inflation, and interest rates affect a company's ability to market its goods and services.
    • Technology: New products, communication forms, and retail channels are influenced by technology.
    • Social/Natural: Societal trends and natural tendencies such as health and wellness (including obesity, consumer values, and sustainable development goals)

Generational Cohorts

  • Marketer's should consider generational cohorts (e.g., Baby Boomers, Gen X, Millennials, Gen Z) when marketing products.
  • These cohorts can have different needs and preferences shaping buying behaviours.
  • Understanding age ranges of generations.

Additional Factors

  • Income: Purchasing power is directly related to income. Statistics Canada tracks income trends.
  • Occupation: Classifications of income often group consumers as upper-middle or lower-class.
  • Education: Education levels relate to income levels, which influence spending patterns.
  • Gender: Shifting male/female roles need consideration in marketing strategies.
  • Ethnicity: Canada's shifting ethnic composition influenced by immigration.
  • Privacy concerns: Loss of personal data, concerns around identity theft, and regulations like "Do Not Call" and "Do Not E-mail" laws are important factors.
  • Time-poor society: Consumers often multitask, which shapes marketing strategies.
  • Efficient distribution of food (including waste): Trends in diet-related products and food waste are also central considerations for marketers.
  • Health and wellness concerns: Obesity trends, child and teenage obesity in North America, and consumer demand for healthy lifestyle products are influencing markets.

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Description

Test your knowledge on the factors influencing business in today's environment, including currency exchange rates, legislative acts, and social trends. This quiz covers various concepts that shape firms’ operations and strategic decisions in Canada and globally.

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