The document discusses scanning the marketing environment. It covers various external forces that affect marketing, including social forces like demographics, economics, technology, competition, and regulations. Demographics include characteristics like age, gender, and income of a population. Economics covers the overall economy and factors like consumer income and spending. Technology discusses innovations and their impact. Competition analyzes alternative forms of competition in a market. Regulations describe various laws and acts that govern business practices. The environmental scan is important for identifying trends to help organizations effectively market their products and services.

1. CHAPTER
SCANNING THE
MARKETING
ENVIRONMENT
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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2. Environmental Scanning
Environmental scanning is the process
of continually acquiring information on
events occurring outside the organization
to identify and interpret potential trends.
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3. FIGURE 3-1 Environmental forces affecting
the organization, as well as its suppliers and
customers
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4. FIGURE 3-2 An environmental scan of
today’s marketplace
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5. Social Forces
The social forces of the environment
include the demographic characteristics of
the population and its values.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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6. Demographics
Demographics describes a population
according to selected characteristics such
as age, gender, ethnicity, income, and
occupation.
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7. SOCIAL FORCES
• Social Forces
• Demographics
§ The World Population at a Glance
§ The U.S. Population
• Households & Population shifts
§ Generational Cohorts
• Baby Boomers
• Millennials
• Generation X
• Generational Marketing
• Generation Y
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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8. Generation Cohorts
Baby boomers is the generation of
children born between 1946 and 1964.
Generation X includes the 15% of the
U.S. population born between 1965 and
1976.
Generation Y includes the 72 million
Americans born between 1977 and 1994.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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9. SOCIAL FORCES
• Demographics
§ Racial and Ethnic Diversity
• Multicultural Marketing
• Culture
§ Changing Values
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10. Culture
Culture incorporates the set of values,
ideas, and attitudes that are learned and
shared among the members of a group.
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11. Multicultural Marketing
Multicultural marketing consists of
combinations of the marketing mix that
reflect the unique attitudes, ancestry,
communication preferences, and lifestyles
of different races.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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12. FIGURE 3-3 Racial and ethnic
concentrations in the United States
(excluding whites)
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13. Concept Check
1. Why are many companies developing
multicultural marketing programs?
A: (1) The racial and ethic diversity of the U.S. is
changing rapidly due to the increases in the
African American, Asian, and Hispanic
populations, which increases their economic
impact. (2) An accurate understanding of the
culture of each group is essential if marketing
efforts are to be successful.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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14. Concept Check
2. How are important values such as
“health and fitness” reflected in the
marketplace today.
A: Millions of Americans are trying to live a
healthier lifestyle. In response,
companies have developed vitamins,
exercise equipment, fitness drinks,
magazines, and other products to target
these consumers.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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15. ECONOMIC FORCES
• Economy
• Macroeconomic Conditions
• Consumer Income
§ Gross Income: Total income earned
§ Disposable Income: Gross Income - Tax
§ Discretionary Income:
Disposable Income - $ for necessity
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16. Concept Check
1. What is the difference between a
consumer’s disposable and
discretionary income?
A: Disposable income is the money a
consumer has left after paying taxes
to use for food, clothing, and shelter.
Discretionary income is the money
that remains after paying taxes for
necessities.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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17. FIGURE 3-4 Income distribution of U. S.
households
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18. TECHNOLOGICAL FORCES
• Technology
• Technology of Tomorrow
• Technology’s Impact on Customer Value
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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19. Concept Check
2. How does technology impact
customer value?
A: (1) Consumers assess value on the basis of other
dimensions, such as quality, service, and
relationships, due to the decline in the cost of
technology. (2) Technology provides value
through the development of new products.
(3) Technology has changed the way existing
products are produced through recycling and
precycling.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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20. TECHNOLOGICAL FORCES
• Electronic Business Technologies
§ Marketspace
§ Electronic Commerce
§ Intranet
§ Extranets
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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21. COMPETITIVE FORCES
• Competition
• Alternative Forms of Competition
§ Pure Competition
§ Monopolistic Competition
§ Oligopoly
§ Pure Monopoly
• Small Businesses as Competitors
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22. FIGURE 3-A Continuum of competition
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23. FIGURE 3-B Porter’s five competitive forces
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24. Competition
Competition refers to the alternative
firms that could provide a product to
satisfy a specific market’s need.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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25. Barriers to Entry
Barriers to entry are business practices or
conditions that make it difficult for new
firms to enter the market.
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26. Restructuring
Restructuring occurs when firms strive for more
efficient corporations that can compete globally
by reducing duplicate efforts in multiple
company locations, closing or changing
unprofitable plants and offices, and laying off
employees.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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27. REGULATORY FORCES
• Regulation
• Protecting Competition
§ Sherman Antitrust Act (1890): forbid restraint
of trade, monopoly
§ Clayton Act (1914): prevent increasing
barriers of entry
§ Robinson-Patman Act (1936): prohibit
price discrimination
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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28. REGULATORY FORCES
• Product-Related Regulation
§ Company Protection
• Patent Law
• Copyright Law
• Digital Millennium Copyright Act (1998)
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29. REGULATORY FORCES
• Product-Related Regulation
§ Consumer Protection
• Nutritional Labeling & Educational Act (1990)
• Consumer Product Safety Act (1972)
§ Consumer Product Safety Commission
• Consumerism (since 1960)
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30. Consumerism
Consumerism is a grassroots movement
started in the 1960s to increase the
influence, power, and rights of consumers
in dealing with institutions.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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31. REGULATORY FORCES
• Product-Related Regulation
§ Both Company and Consumer Protection
• Landham Act (1946): protect trademark owners
• Trademark Law Revision Act (1988): company’s rights
secured before actual use
• Madrid Protocol (2003): facilitates the protection of
US trademarks throughout the world
• Federal Dilution Act (1995): prohibit using a
trademark on a uncompetitive product
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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32. REGULATORY FORCES
• Pricing-Related Legislation: regulates
price fixing & price discounting
• Distribution-Related Legislation
§ Exclusive Dealing (reseller agrees to see only 1
manuf.’s products)
§ Requirement Contracts (buy from 1 seller)
§ Exclusive Territorial Distributorships (sole
distributor in the area)
§ Tying Arrangement (buyer is required to
buy another item in the line)
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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33. REGULATORY FORCES
• Advertising- and Promotion-Related
Legislation
§ FTC Act of 1914
• Cease and Desist Order: stop unfair practices
• Corrective Advertising
§ Do Not Call Registry (telemarketing)
§ CAN-SPAM Act (2004): restrict information
collection, unsolicited email promotions, & specify
Simple opt-out
• Control through Self-Regulation
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34. Self-Regulation
Self-regulation is an alternative to
government control where where an
industry attempts to police itself.
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35. Concept Check
3. How does the Better Business
Bureau encourage companies to
follow its standards for commerce?
A: Companies must agree to follow
BBB standards before they are
allowed to display the BBB logo.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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36. Economy
The economy pertains to the income,
expenditures, and resources that affect the
cost of running a business and household.
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37. Technology
Technology refers to inventions or
innovations from applied science or
engineering research.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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38. Marketspace
Marketspace is an information- and
communication-based electronic
exchange environment mostly occupied
by sophisticated computer and
telecommunication technologies and
digitized offerings.
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
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