Competition also has sharply intensified, as the number of firms engaged in producing similar products has increased.Each firm tries to differentiate its products from those of its competitors. Profit margins, meaning the profit percentages made by a business per dollar of sales, are constatly being lessened. Although costs continue to rise, competition tends to keep prices down. The result is a narrowing spread between costs and selling prices. An increase in a business's sales volume is necessary to maintain or raise profit.
Another force affecting modern marketing is the influence of the consumer rights or consumer protection movement. This movement insists on safe, reputable, and reliable products and services. Both consumer groups and government agencies have intensified their scrutiny of products, chanllenging such diverse elements as product design,lengh and legitimacy of warranty, and promotional tactics. Warranty and guarantee practices, in particular, have been closely examined. New legislation has generally defined and extended the manufacturer's responsibility for porduct performance.
Environmental concerns have also affected product design and marketing, especially as the expense of product modification has increased the retail cost. Such forces, which have added to the friction between producer and consumer, must be understood by the marketer and integrated into a sound marketing program.
Even the way a firm handles itself in public life-that is, how it reacts to social and political issues-has become significant. No longer may a corporation cloak its internal decisions as private affairs. The public's dissatisfaction with the actions and attitudes of a firm has sometimes led to a reduction in sales; conversely, consumer enthusiasm, generated by a firm's intentional establishment of a good public image or public relations, has led to increased sales.
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