Thanks to the authors

1. Chapter 3
The Marketing
Environment
E i

2. Marketing Environmental Forces:
Scanning, Analysis, Response
Competitive Economic Political
Product Price
Target
Market
M k t
Place Promotion
Legal Regulatory Technological Socio-cultural
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3. Marketing Environment
The Marketing Environmental
forces affect a marketer’s
ability to facilitate
exchanges in three ways:
They influence customers’ Product Price
preferences and needs
Target
Market
They may affect buyers’
buyers
reactions to the firm’s Place
Promotion
marketing mix.
They help determine whether
and how marketing
activities will be performed.
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4. Examining and Responding to
the Marketing Environment
g
• Environmental Scanning
The collecting of information about forces in the
marketing environment;
Sources of Information?
http://www.lib.uni.edu/ris/business
p
• Environmental Analysis
Assessing and interpreting the information gathered
through environmental scanning
• Accuracy
• Consistency y
• Significance – Opportunity or Threat?
• Responding to Environmental Forces
Reactive – passive view
R ti i i
Proactive – attempt to shape and influence
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5. COMPETITIVE FORCES
Brand competitors
Similar
benefits/features/prices
Direct competition
Product competitors
Same product class; different
features/benefits
Generic competitors
Very different product;
satisfies same b i need
ti fi basic d
Total budget competitors
Competing for same
customer’s dollars
(Volvic brand competitors include
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6. What
Wh t possible
ibl
competitor
p
types are being
targeted?
Reprinted with permission of Tropicana Products, Inc.
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7. How does Kleenex differentiate its
products to carve out its niche?
© 2004 Kimberly-Clark Worldwide, Inc.
Reprinted with Permission.
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8. Economic Forces
• Economic Conditions
• Marketer responses?
60
Prosperity
50 Expansion
40
30
20
Recession Recovery
10
0
200A 200B 200C 200D 200E
-10
-20
-30
Depression
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9. Gains In Buying Power (1990-2010)
450%
400%
350%
300%
250%
200%
150%
100%
50%
0%
c
ks
s
ns
s
ni
an
te
c
ia
pa
hi
la
si
nd
W
B
A
is
.I
H
er
m
A
Augustachronicle.com, “Minority Buying Power”, Oct. 22, 2005,
http://chronicle.augusta.com/diversity/2005/buying-power.shtml
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10. Economic Forces
• Buying Power
A function of economic conditions and size of resources
Income
Disposable income vs. Discretionary income
Credit
Increase current buying power at the expense of….
Wealth
Use to make current purchases
Generate additional income
Enables acquisition of large amounts of credit
• Willingness to Spend
Considerations? E
C id ti ? Expectations?
t ti ?
influenced by the ability to buy and numerous psychological
and social forces.
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11. Ranking Products Consumers Would Cut
Back on if Spending Decreased
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12. Wacky Warnings
A label on a baby stroller warns: “Remove child before folding
A household iron warns users: “Never iron clothes while they are
being worn”
A warning on an electric drill made for carpenters cautions: “This
product not intended for use as a dental drill.”
A label on a personal watercraft that warns: “Never use a lit match or
p
open flame to check fuel level.”
A 12-inch rack for storing compact disks warns: “Do not use as a
ladder.”
A cartridge for a laser printer warns, “Do not eat toner”
A 13-inch wheel on a wheelbarrow warns: “Not intended for highway
use
use”
A warning on cell phone: Don’t try to dry your phone in a microwave
oven.
A box of birthday cake candles says: “DO NOT use soft wax as ear
DO
plugs or for any other function that involves insertion into a body
cavity.”
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13. Legal and Regulatory Forces
• Pro-competitive Legislation:
p g
(FTC) influences marketing activities most;
Designed to:
preserve competition
titi
prevent the restraint of trade and the
monopolizing of markets
p g
prevent illegal competitive trade
practices
• Consumer Protection Legislation
Designed to protect customers from:
deceptive trade practices and the sale of
hazardous products
adulterated and mislabeled food and drugs
the invasion of personal privacy and
the misuse of personal information by firms
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14. Political Forces: Maintaining Relations
To influence the creation of laws and regulations
affecting industries and specific businesses
banking,
banking health care agri-business oil defense
care, agri-business, oil,
telecommunications, labor, construction, etc.
Lobbyists work to communicate businesses’ concerns
about issues affecting their industries and markets
Assist in securing foreign markets
Campaign contrib tions of corporate related indi id als
contributions corporate-related individuals
and PACs may provide influence
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15. Major Laws
Affecting
Marketing
Decisions
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16. TECHNOLOGICAL FORCES
•Impact of Technology
Impact
Effects include:
Dynamics
D i
Reach
Self-Sustaining
•Adoption and Use of
Technology (Monster.com has changed the way
people search for jobs. Page 72)
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17. Adoption and Use of Technology
Would You Like to Buy a Fuel-Cell
Car?
Why or Why Not?
y y
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18. SOCIOCULTURAL FORCES
The i fl
Th influences i a society
in i t
and its culture(s) that change
people’s attitudes, b li f
l ’ ttit d beliefs,
norms, customs, and
lifestyles.
lif t l
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19. Top Trends That Changed America
1. Diversity: Record immigration changes the face of the nation
2. The fight for equality: More women in the workforce, paid better
wages.
3. Millions living longer: 79 million baby boomers reach their 60s.
g g y
4. Globalization: One world, increasingly one economy.
5. Global warming: Whatever the cause, weather patterns change.
6.
6 Gay rights: From statehouses to military cultural issues grow
military, grow.
7. Are we safe? Fear of terrorism changes daily life.
8. Smoking snuffed out: Tried to light a cigarette lately?
9. Obesity crisis: Adults and kids ever heavier.
10. Tech's cult of "me": Computers, cellphones, iPods make technology
personal.
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20. Issues Of Sociocultural Forces
Demographics and Diversity Characteristics:
Age, gender, race, ethnicity
Marital/parental status, income, education
Impact on Marketers?
• Cultural Values
Health
Family
Environment
Others??
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