In summer 2004, both companies came out with nearly identical new colas boasting half the sugar, half the calories, and half the carbohydrates of regular colas. Because neither wants to lose share to the other, they tend to resort to similar tactics. Each tries to capture market share by convincing people that its soft drinks are better. Coke and Pepsi, for instance, are brand competitors who have engaged in the so-called cola wars for decades. In particular, they need to monitor the activities of two groups of competitors: the makers of competing brands and the makers of substitute products. Marketers who don’t pay attention to their competitors are playing a losing game. Imagine playing tennis without watching what your opponent was doing. For one thing, you’ll have to pay particular attention to fluctuations in exchange rates, because changes will affect both your sales and your profits. company whose goods are manufactured in China and sold in Brazil, you’ll need to know as much as you can about the economies in three countries: the United States, China, and Brazil. For example, if you’re the marketing director for a U.S. Moreover, if you operate in foreign markets, you can’t focus on solely domestic economic conditions: you have to monitor the economy in every region where you do business. Sales will slip, and to counteract the anticipated slowdown, you might have to add generous rebates to your promotional plans. If you’re trying to sell cars, you know that people facing higher interest rates aren’t so anxious to take out car loans. ![]() ![]() ![]() Then there’s inflation, which pushes interest rates upward. On the other hand, when the economy is slowing (or stalled) and unemployment is rising, people have less money to spend, and the marketer’s job is harder. Marketing products is easier because consumers are willing to buy. Naturally, business thrives when the economy is growing, employment is full, and prices are stable. At other times (like today), the news makes them nervous-our economy is weak, industrial production is down, jobless claims are rising, consumer confidence has plummeted, credit is hard to get. Sometimes (but not recently), the news is cause for optimism-the economy’s improving, unemployment’s declining, consumer confidence is up. They must digest it, assess its impact, and alter marketing plans accordingly. The telemarketing industry fired workers and scrambled to reinvent its entire business model.Įvery day, marketing managers face a barrage of economic news. Talent coordinators posted red flags next to the names of Janet Jackson (of the now-famous malfunctioning costume) and other performers. Food companies reduced trans-fat levels and began targeting health-conscious consumers. ![]() Tobacco companies rerouted advertising dollars from TV to print media. The broadcasting industry is increasingly concerned about fines being imposed by the Federal Communications Commission for offenses against “standards of decency.” The loudest outcry probably came from telemarketers in response to the establishment of “do-not-call” registries.Īll these actions occasioned changes in the marketing strategies of affected companies. More recently, many companies in the food industry have expressed unhappiness over regulations requiring the labeling of trans-fat content. The tobacco industry, for example, has had to learn to live with a federal ban on TV and radio advertising. Businesses favor some regulations (such as patent laws) while chafing under others (such as restrictions on advertising). The purpose of regulation is to protect both consumers and businesses. Federal, state, and local bodies can set rules or restrictions on the conduct of businesses.
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