Marketing Strategy 7th Edition by O. C. Ferrell Solution manual

Chapter 1:  Marketing in Today’s Economy

 

 
Chapter Outline
 

I.          Introduction

1. Beyond the Pages 1.1 reviews the challenges associated with marketing products in mature industries. Commoditization is a consequence of mature industries, where slowing innovation, extensive product assortment, excess supply, and fickle, price-conscious consumers force margins to the floor.
2. All organizations—both for-profit and nonprofit—require effective planning and a sound marketing strategy to achieve their goals and objectives.

1. Without these vital efforts, organizations will not be able to satisfy the needs and wants of their customers or other stakeholders.

C.        Organizations use sound marketing strategy to leverage their strengths and capitalize on opportunities that exist in the market. Every organization develops and implements marketing.
D.        This chapter will review some of the major challenges and opportunities that exist in planning marketing strategy in today’s economy. It will also review the nature and scope of major marketing activities and decisions that occur throughout the planning process. Finally, the chapter looks at some of the major challenges involved in developing marketing strategy.
 

II.        The Challenges and Opportunities of Marketing in Today’s Economy

1. Consider the following fundamental changes to marketing and business practice, as well as our own personal buying behavior.

1. Power Shift to Customers: The astounding growth of the Internet has shifted power to customers, not marketers.

a) Customers often manipulate businesses because of their access to information, the ability to comparison shop, and the control they have over spending.
2.        Massive Increase in Product Selection: The variety and assortment of goods and services offered for sale on the Internet and traditional stores is staggering.
a)        The vast amounts of information available online has changed the way we communicate, read the news, and entertain ourselves.
b)        This radical increase in product selection and availability has exposed marketers to inroads by competitors from every corner of the globe.
3.        Audience and Media Fragmentation: Since the advent of cable television in the late 1970s, mass media audiences have become increasingly fragmented. Media audiences have become fragmented due to (1) the sheer number of media choices we have available today, and (2) the limited time we have to devote to any one medium. [Exhibit 1.1]
a)        Despite the challenge of reaching mass audiences today, media fragmentation does have a big advantage: It is easier to reach small, highly targeted audiences who are more receptive to specific marketing messages.
4.         Changing Value Propositions: The speed and efficiency of commerce today has changed the way customers view value. The lesson for marketers is clear: In situations where customers see goods and services as commodities, customers will turn to the most convenient, least expensive alternative.
5.         Shifting Demand Patterns: In some cases, changes in technology have shifted customer demand for certain product categories. The challenges faced by the movie rental industry bear this out.
6.         Privacy, Security, and Ethical Concerns: Changes in technology have made our society much more open than in the past. As a result, these changes have forced marketers to address real concerns about security and privacy, both online and offline.
a)        For example, many well-known and respected companies have been fined for violating the standards of the Children’s Online Privacy Protection Act. [Exhibit 1.2]
7.         Unclear Legal Jurisdiction: A final issue concerns the conflicting perspectives over legal jurisdiction when a company does business in more than one country.
a)        Another important issue involves the collection of sales tax for online transactions.