1. Before we get started… What is “the marketing concept”?What is “the marketing concept”?

2. The Competitive Market BMI3C

3. Free Market An economy that allows:An economy that allows: –Profit –Private Property –Competition

4. Profit Money left over from sales after paying off all expenses and taxesMoney left over from sales after paying off all expenses and taxes In a free market you are allowed to earn and keep a profitIn a free market you are allowed to earn and keep a profit

5. Private Property Private citizens and corporations can own property (land, equipment, etc.)Private citizens and corporations can own property (land, equipment, etc.) Individuals can use or dispose of things of value, as long as no laws are brokenIndividuals can use or dispose of things of value, as long as no laws are broken

6. Competition You are free to go into any business you like (as long as it’s legal)You are free to go into any business you like (as long as it’s legal) Competition drives prices down and fuels innovationCompetition drives prices down and fuels innovation

7. Canada Is Canada a “pure” free market?Is Canada a “pure” free market? –Gov’t regulation (ex: minimum wage) –Gov’t monopolies (ex: VIA rail, Healthcare, etc) –Gov’t guides certain industries (subsidies for farming, oil & gas, etc.) Canada is technically a “mixed economy”, like most nations.Canada is technically a “mixed economy”, like most nations. Free Market EconomyCommand Economy SwedenNorth KoreaUSA

8. Competition Competition defines the structure of the marketCompetition defines the structure of the market The competitive market permits and encourages varietyThe competitive market permits and encourages variety Consumers have a choice of product styles, product types, price, and qualityConsumers have a choice of product styles, product types, price, and quality There are 4 major market structures:There are 4 major market structures: –Perfect Competition –Monopolistic Competition –Monopoly –Oligopoly

9. Perfect Competition large number of small companieslarge number of small companies no one company has control over the marketno one company has control over the market government legislation is required to restrict growth in order to avoid/prevent dominance by one companygovernment legislation is required to restrict growth in order to avoid/prevent dominance by one company

10. Monopolistic Competition consists of a large number of small firmsconsists of a large number of small firms each has small opportunity for controleach has small opportunity for control

11. Oligopoly a small number of firmsa small number of firms each has a great opportunity for controleach has a great opportunity for control

12. Monopoly a single company has complete market controla single company has complete market control

13. What are some examples of industries that have… Perfect CompetitionPerfect Competition Monopolistic CompetitionMonopolistic Competition OligopolyOligopoly MonopolyMonopoly

14. Discussion Is Microsoft a monopoly?Is Microsoft a monopoly?

15. Canada Canada regulates competition by not allowing:Canada regulates competition by not allowing: –monopolies –price – fixing –restrictive mergers –exclusive dealing

16. Competition What are some of the ways that businesses compete?What are some of the ways that businesses compete? Price (leads to R&D)Price (leads to R&D) ServiceService PlacementPlacement BrandBrand

17. Competition Ex: you’re thirsty and want a drink, what are your options?Ex: you’re thirsty and want a drink, what are your options? –Different beverages, same price SubstitutesSubstitutes Direct CompetitionDirect Competition –Chocolate bar is about the same price Not a substitute, but still competing for your moneyNot a substitute, but still competing for your money Indirect CompetitionIndirect Competition