BMGT350 NOTES FOR EXAM 1 11 28 2012 CHAPTER 4 THE MARKETING ENVIRONMENT Target market a defined group most likely to buy a firm s product Environmental management when a company implements strategies that attempt to shape the external environment within which it operates American values Self sufficiency Upward mobility Work ethic Conformity Component lifestyles the practice of choosing goods and services that meet one s diverse needs and interests rather than conforming to a single traditional lifestyle Demography the study of people s vital statistics such as age race and ethnicity and location Tweens parents tell them not to click on banner ads or pop ups so tweens perceive this kind of advertising as something that should be ignored Teens to advertise to teens it is important to make the product modern and convenient and engage teens though promotion that get them involved Generation Y people born between 1979 and 1994 Inquisitive Opinionated Diverse Quick shoppers Want fulfillment Time managers Multitaskers Environmentally aware Generation X people born between 1965 and 1978 latchkey children like Independent buying stuff Resilient Adaptable Cautious Skeptical Baby boomers people born between 1946 and 1964 postponing retirement lost a lot of money Hispanics brand loyal to brands from their home country Purchasing power a comparison of income versus the relative cost of a set standard of goods and services in different geographic areas Inflation a measure of the decrease in the value of money expressed as the percentage reduction in value since the previous year Recession a period of economic activity characterized by negative growth which reduces demand for goods and services Basic research pure research that aims to confirm an existing theory or to learn more about a concept or phenomenon Applied research an attempt to develop new or improved products Stimulating innovation Build scenarios Enlist the web Talk to early adopters Use marketing research Create an innovative environment Cater to entrepreneurs Consumer product safety commission CPSC a federal agency established to protect the health and safety of consumers in an around their homes commerce Food and Drug Administration FDA a federal agency charged with enforcing regulations against selling and distributing adulterated misbranded or hazardous food and drug products Federal Trade Commission FTC a federal agency empowered to prevent persons or corporations from using unfair methods of competition in Bureau of competition reviews mergers and acquisitions challenges anti competitive conduct promotes competition provides information Bureau of consumer protection enforces federal laws that protect consumers empowers consumers with information communicates with consumer about fraud and identity theft Competitive factors Competition for market share and profits firms must work harder to maintain profits and market share Global competition more foreign firms are entering U S market foreign firms in U S now compete on product quality CHAPTER 5 DEVELOPING A GLOBAL VISION Global marketing marketing that targets markets throughout the world Global vision recognizing and reacting to international marketing opportunities using effective global marketing strategies and being aware of threats from foreign competitors in all markets Job outsourcing sending U S jobs abroad Multinational corporation a company that is heavily engaged in international trade beyond exporting and importing Capital intensive using more capital than labor in the production process doesn t increase employment Global marketing standardization production of uniform products that can be sold the same way all over the world India and China fastest growing population Mercosur the largest Latin American trade agreement includes Argentina Bolivia Brazil Chile Columbia Ecuador Paraguay Peru and Uruguay Legal structures designed to encourage or limit trade Tariff Quota Boycott Exchange control Market grouping Trade agreement Uruguay Round an agreement to dramatically lower trade barriers worldwide created the World Trade Organization World Trade Organization trade organization that replaced the old General Agreement on Tariffs and Trade GATT General Agreement on Tariffs and Trade GATT a trade agreement that contained loopholes enabling countries to avoid trade barrier reduction agreements North American Free Trade Agreement NAFTA an agreement between Canada the United States and Mexico that created the world s largest free trade zone Central American Free Trade Agreement CAFTA a trade agreement instituted in 2005 that includes Costa Rica the Dominican Republic El Salvador Guatemala Honduras Nicaragua and the U S European Union a free trade zone encompassing 27 European countries World Bank an international bank that offers low interest loans advice and information to developing nations International Monetary Fund IMF an international organization that acts as a lender of last resort providing loans to troubles nations and also works to promote trade through financial cooperation Group of twenty G 20 a forum for international economic development that promotes discussion between industrial and emerging market countries on key issues related to global economic stability Exporting selling domestically produced products to buyers in other countries Buyer for export an intermediary in the global market who assumes all ownership risks and sells globally for its own account Export broker an intermediary who plays the traditional broker s role by bringing buyer and seller together Export agent an intermediary who acts like a manufacturer s agent for the exporter the export agent lives in the foreign market Licensing the legal process whereby a licensor allows another firm to use to use its manufacturing process trademarks patents trade secrets or other proprietary knowledge Contract manufacturing private label manufacturing by a foreign company currency Joint venture when a domestic firm buys a part of a foreign company or joins with a foreign company to create a new entity Direct foreign investment active ownership of a foreign company or of overseas manufacturing or marketing facilities Floating exchange rates a system in which prices of different currencies move up and down based on the demand for and the supply of each Dumping the sale of an exported product at a price lower than that charged for the same or a like product in the home market of the exporter Countertrade
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