Strategic MarketingStrategic Marketing

ManagementManagement

Scanning theMarketing

Environment

Scanning theMarketing

Environment

OverviewOverview::Why Study of Environment is

Important?Opportunities or Threats come

from it.Strategic fit is critical for success and environmental scanning helps company

keep in touchMarketing more then any other functional department has the responsibility to carry this outPIA: Sales are slipping or stagnant.

Reasons could be greater competition, increasing costs, poor quality etc.

Why Study of Environment is Important?

Opportunities or Threats come from it.

Strategic fit is critical for success and environmental scanning helps company

keep in touchMarketing more then any other functional department has the responsibility to carry this outPIA: Sales are slipping or stagnant.

Reasons could be greater competition, increasing costs, poor quality etc.

•Un met needs are opportunities

•Opportunities can be found by identifying trends

•Trend is a direction or sequence of events with momentum and

direction

•Fads Trends and Mega Trends

•Un met needs are opportunities

•Opportunities can be found by identifying trends

•Trend is a direction or sequence of events with momentum and

direction

•Fads Trends and Mega Trends

OpportunitiesOpportunities

Is It a Trend or a Fad?Is It a Trend or a Fad?

1. Does it fit with basic lifestyle changes?2. What are the benefits?3. Can it be personalized?4. Is it a trend or a side effect?5. What other changes have occurred?6. Who has adopted the change?

A trend is a direction or sequence of events that have some momentum and durability.

Many Opportunities are found by identifying trends.

A trend is a direction or sequence of events that have some momentum and durability.

Many Opportunities are found by identifying trends.

Forces in the Forces in the environmentenvironment

Macro vs MicroMacro vs Micro Internal vs ExternalInternal vs ExternalControllable vs Controllable vs

UncontrollableUncontrollable

Factors in the External Environment Factors in the External Environment

DemographicsDemographics

Social &Cultural

Social &Cultural

EconomicConditionsEconomicConditions

Political & Legal FactorsPolitical &

Legal Factors

TechnologyTechnology

CompetitionCompetition

Ever-ChangingMarketplace

ProductPlace

PromotionPrice

ProductPlace

PromotionPrice

EnvironmentalScanning

MarketingMix

TargetMarket

NaturalNatural

External Environmental Factors (MACRO)External Environmental Factors (MACRO)

Political & LegalPolitical & Legal

TechnologyTechnology

NaturalNatural

Political & Fiscal Policy. Interest Groups,

Consumerism, Deregulation, Legislation,

Political & Fiscal Policy. Interest Groups,

Consumerism, Deregulation, Legislation,

Raw material shortage, increased energy cost,

pollution, depleting natural resources

Raw material shortage, increased energy cost,

pollution, depleting natural resources

Most Important due to accelerated rate of change. Unlimited opportunity for

innovators.

Most Important due to accelerated rate of change. Unlimited opportunity for

innovators.

External Environmental Factors (MACRO)External Environmental Factors (MACRO)

Economic ConditionsEconomic Conditions

DemographicDemographic

CompetitionCompetition

Social & CulturalSocial & Cultural

Statistical Study of human population: Gender, regions,

cities,ethnic etc

Statistical Study of human population: Gender, regions,

cities,ethnic etc

Closest Competitor is with similar 4Ps and is called a

strategic group

Closest Competitor is with similar 4Ps and is called a

strategic group

Interest rates, inflation, income distribution, business cycle

Interest rates, inflation, income distribution, business cycle

Most difficult to change. Role of women, health & fitness. Subcultures & High / Low

Context culture

Most difficult to change. Role of women, health & fitness. Subcultures & High / Low

Context culture

DemographicsDemographics

Population GrowthPopulation Growth Age MixAge Mix Ethnic and other marketsEthnic and other markets Educational groupsEducational groups Geographic shifts in PopulationGeographic shifts in Population Mass markets to Micro marketsMass markets to Micro markets

Demography: Changing Role of WomenDemography: Changing Role of Women

63.0

37.8

1960 1985 1995

% E

mp

loye

d84.5

81.1

51.5

80.0

58.0

2005

63.0

Demography: Youth: 18- to 34-Year Demography: Youth: 18- to 34-Year OldsOlds

• 17% smoke more than a half a pack of cigarettes a day.

• 42% use vitamins or supplements or try to eat mostly

organic foods.

• 59% almost always read labels to find out about

content of food.

• 36% restrict the amount of red meat they eat.

• 15% drink three or more cups of coffee a day.Source: “Lifestyles of the Young, Old and In-Between,”Wall Street Journal, 28 June 1996, p. R4.

Demography: Boomers: 35- to 54-Year Demography: Boomers: 35- to 54-Year OldsOlds

• 21% smoke more than a half a pack of cigarettes a day.

• 51% use vitamins / supplements. Try to eat mostly organic foods.

• 63% almost always read labels to find out about content of food.

• 49% restrict the amount of red meat they eat.

• 32% drink three or more cups of coffee a day.

Source: “Lifestyles of the Young, Old and In-Between,”Wall Street Journal, 28 June 1996, p. R4.

Demography: Seniors: 55 Years and Demography: Seniors: 55 Years and OverOver

• 14% smoke more than a half a pack of cigarettes a day.

• 60% use vitamins or supplements or try to eat mostly organic foods.

• 64% almost always read labels to find out about content of food.

• 51% restrict the amount of red meat they eat.

• 30% drink three or more cups of coffee a day.

Source: “Lifestyles of the Young, Old and In-Between,”Wall Street Journal, 28 June 1996, p. R4.

Social-Cultural Social-Cultural EnvironmentEnvironment

Social-Cultural Social-Cultural EnvironmentEnvironment

OfOrganizations

OfNature

OfOneself

OfSociety

Ofthe Universe

OfOthers

ViewsThat Express

Values

ViewsThat Express

Values

Social-Cultural EnvironmentSocial-Cultural Environment

High Persistence of Core Cultural High Persistence of Core Cultural beliefsbeliefs

Existence of sub CulturesExistence of sub Cultures Shifts of secondary cultural valuesShifts of secondary cultural values

Culture: Culture:

MulticulturalismMulticulturalism..Niche

MarketingNiche

Marketing

Adapting PromotionAdapting Promotion

StitchingNiches

StitchingNiches

MarketingStrategies

forMulticultural

Markets

MarketingStrategies

forMulticultural

Markets

Technological Technological EnvironmentEnvironment

Technological Technological EnvironmentEnvironmentAccelerating Pace of

Change

Accelerating Pace of Change

Varying and High R & D Budgets

Varying and High R & D Budgets

Unlimited Opportunity for Innovation

Unlimited Opportunity for Innovation

IncreasedRegulation

IncreasedRegulation

Issues in the TechnologicalEnvironment

Issues in the TechnologicalEnvironment

To protect Consumers- Protect companies from unfair competition- Protect Society from uncontrolled Behavior

To protect Consumers- Protect companies from unfair competition- Protect Society from uncontrolled Behavior

Economic Economic FactorsFactors

•Income Distribution•Saving Debt and Credit availability•Inflation•Recession

Economic Factors Affecting Economic Factors Affecting MarketingMarketing

Distribution of Consumer Income(Socio-econ Groups)

Distribution of Consumer Income(Socio-econ Groups)

Inflation: If price rise is higher than increase

in personal income

Inflation: If price rise is higher than increase

in personal income

Recession: Low Econ growth period.

Part of Business Cycle (Prosperity, Recession, Depression, Recovery)

Recession: Low Econ growth period.

Part of Business Cycle (Prosperity, Recession, Depression, Recovery)

Key Economic Factors of Interest to

Marketers

Key Economic Factors of Interest to

Marketers

Types of Economies:Types of Economies:

TypeType DescriptionDescription

Subsistence Subsistence

Raw Material Exporting

Raw Material Exporting

IndustrializingIndustrializing

IndustrialIndustrial

Agricultural based AfghanistanAgricultural based Afghanistan

Saudi Arabia, IndonesiaSaudi Arabia, Indonesia

Malaysia, SingaporeMalaysia, Singapore

High Saving rate, availability of credit High Saving rate, availability of credit

Lessons to learn Lessons to learn

Adjust yourself to the external Adjust yourself to the external environmentenvironment

Avoid Dinosaur Dilemma.Avoid Dinosaur Dilemma.

Plan for changePlan for change

Avoid surprises.Avoid surprises.

Create Opportunity from EnvironmentCreate Opportunity from Environment

Avoid them to become threats.Avoid them to become threats.

Adjust yourself to the external Adjust yourself to the external environmentenvironment

Avoid Dinosaur Dilemma.Avoid Dinosaur Dilemma.

Plan for changePlan for change

Avoid surprises.Avoid surprises.

Create Opportunity from EnvironmentCreate Opportunity from Environment

Avoid them to become threats.Avoid them to become threats.