Chapter 2

Outline the Chapter.

Define each key term you find.

Summarize each term in your own words. List the important points for each term. Give a "real life" example of each term.

Crossword Puzzle

(hover your mouse over the word for a popup definition)

Chapter2

The objectives tell you what you are expected to know upon completion of the chapter.
I have made some notes for you. Expand on any that are new to you.

1. Discuss the analysis of the external environment.
   The external environment is all forces outside marketing management's direct
   control that influence marketing programs and their potential success. Marketers
   track changes in the environment wheich include consumer values and lifestyles,
   the economy, technology, and competition.
2. Discuss the affects that competitive forces can have on the firm.
   Competitive market structures include pure competition, oligopoly, monopolistic
   competition, and monopoly.
3. Discuss the affects that economic conditions can have on the firm.
   Economic conditions include business cycles, inflation, and level of income and
   its growth rate.
4. Discuss the affects that technological developments can have on the firm.
   Technological advancements include adjustments or new parts for equipment which
   lowers production costs; an ingredient change which improves a product or lowers its
   price; more efficient method of distribution; a new advertising medium.
5. Discuss the affects that political and legal considerations can have on the firm.
   Government establishes the rules and regulations to which businesses must conform.
   List the major laws and federal regulatory agencies.
6. Discuss the affects that social forces can have on the firm.
   Major demographic developments include population growth and movement; changing
   age structure; changing U.S. household; income dynamics; and minority population
   developments. Social trends include erosion of trust; victim ethic; stress; ascendancy of
   value; and personal satisfaction.

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Answer the Discussion Questions.

1. Merck has been the premier drug manufacturer for decades. Environmental changes, however, have caused Merck’s management to reassess the way they are doing business, particularly their distribution of drugs. What type of environmental scanning do you feel is especially important for a drug manufacturer in today’s environment?
2. The management of Bell south feels that future growth potential for the company is in high-quality, interactive communication. The technology to deliver this type of communication is likely to be in fiber-optic cables, but Federal Regulations prevent Bell South from engaging in the cable business in its territory. What type of environmental scanning should the management of Bell South undertake to prepare for the future?
3. The sales of heavy equipment manufacturers like Clark Equipment and Caterpillar are strongly affected by the economic environment. What stage of the business cycle would you say they are currently experiencing? What would you recommend to a heavy equipment manufacturer regarding the economic effects on sales?
4. Bicycle sales have flourished in the past because of interest in cycling for exercise and health reasons. What social trends do you see occurring at the present time that may affect bicycle sales positively or negatively over the next five years?

Chapter2

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