The marketing environment

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Topic 1

Key words

The marketing environment- Is the range of forces, outside the direct control of a business, which affects buyer behaviour and compeition within markets. These include ecnonomic, technological, legal and regulatory and social and ethical forces.

Economic forces- Are changes in the ecnominc variables, such as taxation, which alter consumers' spending and or alter the prices set by businesses for their products. For example an increase in value increase in value added tax (VAT) would increase the price of and reduce the demand for some products.

Technological forces- Are developments in technology that alter the ways in which businesses produce and or sell products for example internet technology has made it easier for businesses to sell products directly to consumers.

Legal and regulatory forces- Are laws or government regulartions that constrain business practices for example consumer protection legislation restricts the way any business can promote and avdertise its products

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Topic 2

Key words

Markets- are where )and when) buyers and sellers come together to dcide on price and quanity bought and sold. They are not necessarily physical locations

Monopoly- Is a market with one seller. However a business with a a market share in excess of 25 per cent is often referred to as having "monopolgy power"

Oligopoly- Is a marker which is dominated by a few businesses

Perfect compeition- Occurs in a market in which there are many businesses relative to the size of the market. All businesses sell similar products. With a little product differentiation evident

Monopolistic compeition- occurs in a market in which there are many businesses relative to the sze of the market but in which products are differentiated. many corner shops sell similar products but they are differentiated by their locations

Customer loyalty- is the tendency for custoemrs to make repeat purchases of products that they are familiar with and trust

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Topic 3

Key words

National income- is measure of value of goods and services produced by nation over a period of time

Economic growth- is a measure of the increase in a nations national income for example in the UK national income grew by 5.4 per cent in 2004

Unemployment leve- is a measure of the number of people who are out of work and are actively seeking employment in the UK employment fell from a peak 3 million in 1993 about 11 per cent of the working population to 1.5 million about 5 per cent in 2001

Interest rate- is the return a financial institutioon or an individual recieves for lending money to a borrower the interest rate can be used to calulate the cost of the loan to the borrower

fiscal policy- is a statement of how a government intends to finnace its spending through taxation. this is done through a mix if direct taxes such as in come tax or indirect taxes such as VAT and duty fuel, alcohol and cigaretts

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Topic 4

Key words

The office of fair trading- Is a UK government body that seeks to protect the consumer from anti competitive practices it can impose significant fines on businesses that are found to be harming consumer interests through anti compeitive practises such as restricting supply of fixing prices at an artificially high level

The competition commission- is an indepedent body responsible for investigating mergers market shares and coniditons and the regulations of businesses in the UK

The advertising standards authority- is an independent body responsible for regulating broadcast and non broadcast advertisng in the UK

Ethical values- are sets of beliefs that define what society of a group within that society considers are acceptable behaviour  

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Topic 5

Key words

Market research- is the systematic collection and analysis of data to enable a buisness to make better marketing decisions

Primary research- involves gathering information directly from the customer within the tarket market

Secondary research- involves gathering information from already published data such as government statistics

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Topic 8

Key words

Segmentation strategies- involve dividing markets into separate groups of customers

Competitive position stratagies- are approaches taken by businesses operating within competitive markets in competitive markers for example marker follower yield to the dominance of the market leader

integrated growth stratagies- are ways in which a business expands its operations through acquiring other business

Ansoff competitive strategies decrive how a buinses can increase sales though developing its products and or its market

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Topic 6

Key words

Rate of change- is a measure of how rapidly a variable is changing usually calculated as a percentage.

Mean- is the arithmetic average of a set of values calculated by dividing the sum of the values by the number of values to calculate the mean of this data set is (3:6:10:12:18) sum the values the answer is 49 and divide by 5 the number of values the mean is 9:8 49/5

Median- is the middle value within an ordered data set. the median of 3:6:10:12:18 is 10 note the median does not have to equal the mean

Mode- is the most frequently occuring value within a data set

Index number- indicates change in a time series of data the current value of a variable such as prices is compared with its value at some speicified time in the past

Line of best fit- is the line that best represents the apparent relationships between two variables when values for both are plotted as a scatter graph. 

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Key words

Social and ethical forces- Arise from the attuides generally held by society or sections of society for example changing public attitudes to the enviornment are forcing businesses to demonstrate greater environmental responsiblility. Changing attitudes towards financial debt is having an impact on credit sales.

Exchange rates- Specifies the value of one nations currency in terms of another nations currency also referred to as foreign exchange rates if the exchange rate btween the UK and the USA IS $1.60 for every £1

Barriers to trade- Are any monetary or non monetary action which makes trade between nations more diffcult for example a government might place a limit on the number of motor vehicles that can be imported from other nations

Barriers to entry- are factors that make it diffcult for new business to enter market. for example the huge intital investments cost of building and equipping a factor is a barrier to entry to car manufacturing

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