Ch05-Scanning Invironment Final

7/30/2019 Ch05-Scanning Invironment Final

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Copyright 2000 Prentice Hall

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Chapter 5

Analyzing the Marketing

Environment




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The ob ject ives

Of this Chapter is to

• Describe the environmental forces that affect thecompany’s ability to serve its customers.

• Explain how changes in the demographic andeconomic environments affect marketingdecisions.

• Identify the major trends in the firm’s natural andtechnological environments.

• Explain the key changes in the political andcultural environments.

• Discuss how companies can react to themarketing environment.




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•The substantial speedup of international transportation,communication, and financial transactions, leading to the rapid growthof world trade and investment, especially tripolar trade (North America,Western Europe, Far East)

•The movement of manufacturing capacity and skills to lower costcountries.

•The rising economic power of several Asian countries in world markets.

•The rise of trade blocks such as the European Union and NAFTAsignatories.

Ident i fy ing and Responding to the Major Mac




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•The severe debt problems of a number of countries, along with theincreasing fragility of the international financial system.

•The increasing use of barter and countertrade to supportinternational transactions.

•The move toward market economies in formerly socialist countriesalong with rapid privatization of publicly owned companies.

•The rapid dissemination of global lifestyles.

•The gradual opening of major new markets, namely China, India,eastern Europe, the Arab countries, and Latin America.





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•The increasing tendency of multinationals to transcend their locational and national characteristics and become transnationalfirms.

•The increasing number of cross-border corporate strategicalliances –for example, MCI and British Telecom, and TexasInstruments and Hitachi.

•The increasing ethnic and religious conflicts in certain countriesand regions.

•The growth of global brands in autos, food, clothing, electronics.





3-6Object ives

•Tracking Trends & Identifying Opportunities in the MarketingEnvironments:

–Macroenvironment -- BIG Picture

–Microenvironment -- Closer-In

–Internal environment -- you & me


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3-7

THE MARKETING ENVIRONMENT

INTRODUCTIONINTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT

SWOT ANALYSIS

THE MARKETING ENVIRONMENT

• INTRODUCTION

• INTERNAL ENVIRONMENT• EXTERNAL ENVIRONMENT• SWOT ANALYSIS



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Market ing Env i ronment

• Marketing:• We have discussed before the meaning of

Marketing and we said that marketing is .

• Environment:

• What do we mean by the environment?



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• Marketing Environment- consists of theactors and forces outside marketing thataffect marketing management’s ability todevelop and maintain successful

relationships with its target customers.

• Includes:

–Microenvironment - forces close to the companythat affect its ability to serve its customers.

–Macroenvironment - larger societal forces thataffect the whole microenvironment.



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… you’ve got to peel away a few layers

to get to the good stuff!

But, the Bus iness Wo rld is l ike an Orange...



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Peeling the “Orange”

TargetConsumers

Product

Place Price

Promotion

Competitors

IntermediariesDemographic

Economic

Technological

Natural

PoliticalLegal

SocialCultural

Logistics

© Bruce C. Bailey 1998



3-13The Marketing Environment

Company

Demographic

Economic

Natural

Technological

Political

Cultural

Company

Customers

Intermediaries

Suppliers

Competitors

Publics



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The Microenv i ronment

Company

Customers

Publics Suppliers

Competitors Intermediaries

Forces Affecting a

Company’s Ability toServe Its

Customers



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The Company’s

Microenvi ronment

• Company’s Internal Environment- functionalareas such as top management, finance, andmanufacturing, etc.

• Suppliers - provide the resources needed toproduce goods and services and are animportant link in the “value delivery system” .

• Marketing Intermediaries - help the companyto promote, sell, and distribute its goods to

final buyers.



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The Company’s

Microenvi ronment

• Customers - five types of markets thatpurchase a company’s goods andservices.

• Competitors - those who serve a targetmarket with similar products andservices against whom a company must

gain strategic advantage.

• Publics - any group that perceives itself having an interest in a company’s abilityto achieve its objectives.



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Types o f Customer Markets

Company

ConsumerMarkets

InternationalMarkets

GovernmentMarkets

BusinessMarkets

ResellerMarkets




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Types o f Pub l ics

Financial i.e. Banks

Media i.e. Newspapers

Government i.e. Regulations

Citizen-Action i.e. Consumer Groups

Local i.e. Neighborhood Residents

General Public

Internal i.e. Employees

319Th M i t




3-19The Macroenv ironment

Demographic

Technological

Cultural Economic

Political

Natural

Forces that Shape

Opportunities

and Pose Threats

to a Company

320Th C ’




3-20The Company’s

Macroenvi ronment

• Demographic - studies populations in termsof age, gender, race, occupation, locationand other statistics.

• Economic - factors that affect consumer purchasing power and spending patterns.

• Natural - natural resources needed as inputsby marketers or that are affected bymarketing activities.

321K U S D h i T d




3-21Key U.S. Demograph ic Trends

Changing Age Structure

Population is getting older

Changin g Fami ly Structure Marrying later, fewer children,

working women, and nonfamily households

Geographic Shif ts Moving to the Sunbelt and suburbs (MSA’s)

Inc reased Edu cat ion Increased college attendance

and white-collar workers

Grow ing Ethn ic and Racial Diversi ty 72%Caucasian, 13% African-American,

11%Hispanic & 3% Asian

322D h i E i t




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Worldwide Populat ion Grow th

Popu lat ion Age Mix

Ethnic Markets

Household Patterns

Educat ional Group s

Geographical Shi f ts in Pop ulat ion

Shi f t f rom Mass to Microm arkets

Demograph ic Env ironment

323E i E i t




3-23Econom ic Env i ronment

Changing

Consumer

Spending

Patterns

Economic

Development

Changes

in Income

Key

EconomicConcerns for

Marketers

Inflation

and

Recession

324E i E i t




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Income Distribution Subsistence economies

Raw-material-exporting economies

Industrializing economies

Industrial economies

Savings, Debt, &Credit Availability

Econom ic Envi ronment

325I f l t i




3-25Inf lat ion

• Prices rise with no wage increasePurchasing Power decreases

• Increase profit margins by increasingefficiency

• Consumers reaction:

– Search for lowest prices

– Rely on coupons and sales

326R i




3-26Recession

• Income, production and employment fall

• Reduced demand for goods and services

3-27R i M k ti St t i




3-27Recess ion Market ing Strateg ies

Improve existing products

Maintain customer services

Introduce new products

Emphasize top-of -the line products

3-28N t l E i t




3-28Natural Environment

Shortages of Raw Materials

Increased

Pollution

Governmental

Intervention

Factors Affectingthe

NaturalEnvironment

3-29The Company’s




3-29The Company’s

Macroenvi ronment

• Technological - forces that create newtechnologies, creating new product andmarket opportunities.

• Political - laws, agencies and groups thatinfluence and limit organizations andindividuals in a given society.

• Cultural - institutions and other forces thataffect a society’s basic values, perceptions,

preferences, and behaviors.

3-30Techno logical Env i ronment




330Techno logical Env i ronment

Rapid Pace of

Change

Unlimited

Opportunities

Increased

Regulation

Practical, Affordable

Products

Issues in the TechnologicalEnvironment

3-31Techno log ical & Resource Facto rs




331Techno log ical & Resource Facto rs

• New technology helps firm cope

with other environmental factors

• New technology helps firm carrying outand easuapply of research

• Information technology helps economic

growth

3-32Po l it ical Env ironmen t




332Po l it ical Env ironmen t

IncreasingLegislation Designed

to Protect Groups

Changing Government

AgencyEnforcement

Increasing Emphasison Ethics and

Socially ResponsibleActions

Some Trends in the Political Environment

Include:

3-33Pol i t ical Legal Env ironment




333Pol i t ical-Legal Env ironment

•Regional Groupings –European Union (EU)

–NAFTA

•Consumerism & SIG’s –MADD/SADD

•Ethics & Social Responsibility

•Increased Legislation & Enforcement

3-34Cul tural Envi ronment




Cul tural Envi ronment

Of

Organizations

Of

Nature

Of Oneself

Of Society

Of

the Universe

Of

OthersCultural Valuesof a

Society

3-35Respond ing to the




Respond ing to the


•Environmental Management Perspective

–approach toproact ive Taking amanaging the microenvironment and

the macroenvironment by takingaggressive (rather than passive)actions to affect the publics andforces in the marketing environment.

–How? Hire lobbyists , run“advertorials”, file law suits andcomplaints, and form agreements.

3-36Rest Stop :



Rest Stop :

Reviewing

the

Concepts

• Describe the environmental forces that affect thecompany’s ability to serve its customers.

• Explain how changes in the demographic andeconomic environments affect marketingdecisions.

• Identify the major trends in the firm’s natural and

technological environments.

• Explain the key changes in the political andcultural environments.

• Discuss how companies can react to themarketing environment.

Ch05-Scanning Invironment Final

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