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What is a target market?
It is a defined group most likely to buy a firm's product.
Environmental scanning is...
gathering data to identify future market opportunities and threats.
What are factors of external marketing environment?
- 1. social (demographics)
- 2. economic
- 3. technological
- 4. political & legal
- values (reliability, durability, easy maintenance, ease of use, a trusted brand name & a low price).
- personality traits that vary with region
- lifestyle ( choosing goods/services that meet one's needs and interests rather than conforming to one single lifestyle)
- changing role of families and working women (women shoppers are vital)
- not enough time (consumers consolidate shopping trips, research products online before purchase, word-of-mouth)
Demographic factors are
- 1. age
- 2. race & ethnicity
- 3. location
Economic factors are:
- consumer's income (disposable income) Education is primary determinant of person's earning potential
- purchasing power
- inflation recession
Purchasing power is
comparison of income vs. the relative cost of a set standard ofgoods/services in different locations - aka "cost of living"
What is inflation?
a measure of the decrease in the value of money expressed as the % reduction compared to previous year
What is a recession?
a period of economic activity characterized by negative growth which reduces demand for goods/services
Technological factors are:
- research (basic & applied)
- stimulating innovation
Basic vs. applied research
Basic is not aimed at a specific probleml; it focuses on a concept or a theory.
Applied research attempts to develop new or improved products.
Political & legal factors
- federal legislation (Federal Trade Commision Act)
- state laws
- regulatory agencies (i.e Food & Drug Administration, Federal Trade Commission)
What are competitive factors?
- competition for market share and profits
- global competition