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Principles of Marketing - Philip Kotler

The impact of marketing on other entrepreneurs

Critics also argue that many companies violate the rights of others. It is about three issues: the merger, narrowing the competition of artificial barriers to entry for new firms and predatory competition.

PURCHASE, narrows competition. Periodically, allegations are that many firms do not expand due to the self-development of new products and the necessary market and through the acquisition of other companies. Over a time span of nine leading companies in the production of drugs, prescription, self-created in the framework of its eight new companies and acquired on the side of 1614. And here's another example: Corporation "Procter & Gamble" absorbed company "Clorox", a major producer of liquid otbelivateley15 household. The Supreme Court ruled that the acquisition of this industry as a whole would deprive potential competition not only from the "Procter & Gamble", decide the corporation to enter the market alone, but also by smaller firms, which in this situation can not dare to enter the market.

Acquisitions - complicated question. They can be beneficial to the community in the following circumstances: 1) the company-buyer is able to produce goods more cost-effective manner, which will reduce costs and lower prices; 2) a company with well-established management system absorbs a company with poor management of the system and increases its efficiency; 3) the acquisition of the industry, not differing competitiveness becomes competitive. Acquisitions can also be harmful, especially in the absorption of an energetic young competitor and reducing the number of firms that dominate the industry.

Barriers to entry for new firms. Critics argue that the marketing activities erects significant additional barriers to entry for new firms, barriers in the form of patents, the need for large expenditures on promotion, the need for cooperation with the already well-known suppliers or dealers, and so on. N.

Specialists involved in antitrust law, acknowledged that some of the barriers associated with the economic advantages enjoyed by large enterprises, but others could be to try to correct with the help of existing and new laws. For example, some critics suggest introducing a progressive tax on advertising costs, to reduce the role of marketing costs as one of the main barriers to market entry.

Predatory competition. It is known that some firms are competitive methods calculated to damage other companies or their complete destruction. Such firms can set prices for their goods below cost, threaten suppliers rupture of business relations with them or denigrate competitors' products.

Prevent predatory competition are specially adopted laws. However, to determine whether the purpose or effect is really predatory nature is not easy. In a classic case of the "A & P" chain of stores managed to set prices lower than those charged small family grocery stores, delicatessens. The question is whether it was taking predatory competition, or a manifestation of a healthy competition from more productive retail organization in relation to the less produktivnoy16.