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Transcript
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). Upper Saddle River, NJ:
Pearson Education Inc.