Bus 306 Individual Writing Assignment 1 Discussion Questions 1. The microenvironment consists of entities that are “close to the company that affect its ability to serve its customers.” Examples of these entities in the microenvironment are the “company, suppliers, marketing intermediaries, customer markets, competitors, and publics.” The company can influence these forces to some extent. The company is ultimately responsible for making decisions on which consumers they will serve and how they will serve them which is why they’re a microenvironmental factor. Suppliers affect a company’s supply chain and therefore can have an impact on the end product that the company will offer to the consumer. Marketing intermediaries “help the company promote, sell, and distribute its products to final buyers. They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries(Kotler and Armstrong, 2014).” Competitors affect how the company conducts its business in order to be competitive and will affect the end consumer. Publics are groups that have “an actual or potential interest in or impact on an organization’s ability to achieve its objectives (Kotler and Armstrong, 2014).” Customers are the final and most critical microenvironmental factor because it is their needs that will determine what it is that the company produces and may even factor into how they produce it. The macroenvironment consists of “larger societal forces that affect the microenvironment (Kotler and Armstrong, 2014)” Examples of these societal forces are the “demographic, economic, natural, technological, political, and cultural forces (Kotler and Armstrong, 2014).” The company doesn’t have much control over these forces. The demographic has to do with various population statistics. Demographics are constantly changing over time, which can be said for all the macroenvironmental factors. The company needs to analyze and cater to the demographic in their target market. The economy affects customers’ buying power and a company’s ability to produce goods profitably. The natural environment only offers so many raw materials and resources. This necessitates businesses to act responsibly and will change how they conduct themselves. Technology is constantly changing, creating new opportunities, and making older technology obsolete. It’s important for businesses to either take advantage of these new technologies or innovate new ones in order to stay competitive and serve customers. Political forces place laws and regulations on companies which affect a company’s business practices. Last of all are cultural forces which are the values of people in society. Some of these values are core but some can be manipulated. It is the job of a company to cater to the core values and to influence the ones that can be changed. Both the macroenvironment and the microenvironment are continually changing and need to be monitored by companies in order to stay competitive. 2. The five types of customer markets are consumer, business, reseller, government, and international markets. Consumer markets are individuals who purchase products for personal use. Businesses markets consist of businesses that buy items for processing materials or the materials that need to be processed into a product (Kotler and Armstrong, 2014). An example of this would be Ford purchasing metal to manufacture into an engine or a machine to help manufacture engines. Reseller markets purchase items and resell them for a profit. An example of this would be a grocery store. Government markets purchase items to produce some good or service to the public. An example of this would be Caltrans purchasing vehicles and equipment to better transportation. International markets consist of customer, business, reseller, and government markets in other nations. 3. Core values are those that have been instilled in us by our families, religion, and our culture. These values are ingrained in us and are very hard for businesses to change. Secondary beliefs are those that are able to be influenced (Kotler and Armstrong, 2014). An example of a core belief is becoming educated. A secondary belief about education is whether or not to get your masters or to go to a trade school. Marketers could try to offer incentives for students to go to their school such as competitive prices and specialized programs, but they would have a difficult time changing someone’s core value as to whether they should pursue a higher education or not. Some people don’t hold a higher education as a core value. 4. Marketers can take a proactive or reactive approach to the market. The reactive approach is where companies watch the marketing environment change and then they base their actions on those changes. A proactive approach is where companies try to influence the marketing environment (Kotler and Armstrong, 2014). An example of where companies can do this is with new technology. For example, the digital camera changed the market for photography and the previous market leader, Kodak, had to play catch-up. A proactive approach is preferred if possible. Marketing Ethics Questions 1. If companies such as Facebook and EBay target consumers under 18 legally and allow parents to monitor their children’s spending, a positive result could be children learning how to spend their money responsibly. A con of marketing to minors under the age of 18 is that it will change how they think even if companies do it legally. Children’s’ brains are still developing, and marketing efforts can have bad side-affects. According to psychologist, Allen D Kranner, PhD, “the result is not only an epidemic of materialistic values among children, but also something he calls "narcissistic wounding" of children. Thanks to advertising, he says, children have become convinced that they're inferior if they don't have an endless array of new products (Clay, 2012).” Children should not be taken advantage of if this is the result. 2. In order for companies to target this market and still comply with the Children’s Online Privacy act, companies will need to abide by specific guidelines. Companies will need to post a notice of their information practices in a clear and prominent place. The contact information of the company that is collecting information must be posted as well as the type of information they’re collecting, how they’re using the information, and whether or not it’s being distributed to third parties. If the information is being distributed to third parties, then the company needs to post what those companies are doing with the information. Parents must be given the option to agree to the collection of information from their children and refuse third parties the access to that information. Parents must also be given the option to read what information is collected, delete it, and to refuse further information collection from their children. As long as companies stay within these guidelines, they can freely collect information and market to children (COPPA Children's Online Privacy Protection Act, n.d.). Ford Case Study Questions 1. I’d define Ford as a market challenger. Ford is now trying to increase its market share by competing in every market segment, marketing fewer nameplates, becoming the best in class, quality, fuel efficiency, safety, and value. 2. It seems that Ford is more of a product/ customer-centered company. Ford is responding to the customers need for smaller more fuel efficient cars and it’s continually making its vehicles with more value. For instance, the new Sync feature that Ford is equipping its vehicles with allows customers to connect their technology to the car and interact with it by voice command. 3. The Sync feature attempts to create a competitive advantage by differentiating it from its industry competitors. It is an advantage, but it’s not a sustainable advantage. Technology is constantly changing and it won’t be long before other follower companies use their idea or come up with a better idea. They’ll have to defend their market share through continuous innovation. 4. I think that Mulally can succeed with small world cars. He’s recognized that that is what the market is leaning towards and has responded to that need. He still has the larger cars for the segment of the market that need them as well. Ford has a diverse range of vehicle types; however, they’ve cut down the nameplates to 20, which will allow them to focus on creating quality in the nameplates they do offer. 5. The only recommendation that I have, which I already think they’re doing, is not to sit on their successes. I think they need to continue to look for new market segments and improve value for the segments they’ve already captured. Perhaps they could try to create a heavy duty truck with better fuel economy instead of just having select cars in their fleet which bring the average down. Works Cited Clay, R. A. (2000, September). Advertising to children: Is it ethical?. In American Psychological Association. Retrieved February 8, 2014, from http://www.apa.org/monitor/sep00/advertising.aspx COPPA - Children's Online Privacy Protection Act. (n.d.). Retrieved February 8, 2014, from http://www.coppa.org/comply.htm Kotler, P., & Armstrong, G. (2014). Principles of Marketing (15th ed., pp. 72-91). 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