Chapter03

Chapter 3Chapter 3The Marketing E iEnvironment

Marketing Environmental Forces: Scanning, Analysis, Response

Competitive Economic Political

Scanning, Analysis, Response

TargetM k t

Product Price

Market

Place Promotion

3 | 2Copyright © Houghton Mifflin Company. All rights reserved. 2 | 2Legal Regulatory Technological Socio-cultural

Marketing EnvironmentThe Marketing EnvironmentalThe Marketing Environmental

forces affect a marketer’s ability to facilitate exchanges in three ways:exchanges in three ways:

They influence customers’ Product Pricepreferences and needs

They may affect buyers’TargetMarketThey may affect buyers

reactions to the firm’s marketing mix.

PlacePromotion

They help determine whether and how marketing

3 | 3Copyright © Houghton Mifflin Company. All rights reserved. 3 | 3

activities will be performed.

Examining and Responding to the Marketing Environmentg

• Environmental ScanningThe collecting of information about forces in the marketing environment;marketing environment;Sources of Information?

http://www.lib.uni.edu/ris/businessp• Environmental Analysis

Assessing and interpreting the information gathered through environmental scanningthrough environmental scanning

• Accuracy• Consistencyy• Significance – Opportunity or Threat?• Responding to Environmental Forces

R ti i i


Reactive – passive viewProactive – attempt to shape and influence

COMPETITIVE FORCESBrand competitorsSimilarSimilar

benefits/features/pricesDirect competitionProduct competitorsSame product class; different

features/benefitsfeatures/benefitsGeneric competitorsVery different product;

ti fi b i dsatisfies same basic needTotal budget competitorsCompeting for same

3 | 5Copyright © Houghton Mifflin Company. All rights reserved.(Volvic brand competitors include

Fiji and Evian. Page 60)

Competing for same customer’s dollars

Wh t iblWhat possible competitor ptypes are being targeted?targeted?

3 | 6Copyright © Houghton Mifflin Company. All rights reserved.

Reprinted with permission of Tropicana Products, Inc.

How does Kleenex differentiate its products to carve out its niche?products to carve out its niche?


© 2004 Kimberly-Clark Worldwide, Inc.Reprinted with Permission.

Economic Forces

• Economic Conditions

• Marketer responses?

40

50

60 ProsperityProsperityExpansionExpansion

10

20

30

RecessionRecession RecoveryRecovery

-20

-10

0200A 200B 200C 200D 200E


-30 DepressionDepression

Gains In Buying Power (1990-2010)

400%450%

250%300%350%400%

100%150%200%250%

0%50%

100%

tes cks

ans

ans nic

White

Black

Amer. In

dian

Asian

Hispan


Augustachronicle.com, “Minority Buying Power”, Oct. 22, 2005,http://chronicle.augusta.com/diversity/2005/buying-power.shtml

Economic Forces• Buying Power

A function of economic conditions and size of resources

IncomeDisposable income vs. Discretionary income

CreditIncrease current buying power at the expense of….

WealthUse to make current purchasesGenerate additional incomeEnables acquisition of large amounts of credit

• Willingness to SpendC id ti ? E t ti ?


Considerations? Expectations?influenced by the ability to buy and numerous psychological and social forces.

Ranking Products Consumers Would Cut Back on if Spending DecreasedBack on if Spending Decreased


Wacky WarningsA 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


A box of birthday cake candles says: DO NOT use soft wax as ear plugs or for any other function that involves insertion into a body cavity.”

Legal and Regulatory Forces• Pro-competitive Legislation: p g

(FTC) influences marketing activities most; Designed to:

titipreserve competitionprevent the restraint of trade and the

monopolizing of marketsp gprevent illegal competitive trade

practices• Consumer Protection Legislation• Consumer Protection Legislation

Designed to protect customers from:deceptive trade practices and the sale of

hazardous productsadulterated and mislabeled food and drugs

the invasion of personal privacy and


the invasion of personal privacy and the misuse of personal information by firms

Political Forces: Maintaining Relations

To influence the creation of laws and regulations affecting industries and specific businessesbanking health care agri-business oil defensebanking, health care, agri-business, oil, defense telecommunications, labor, construction, etc.

Lobbyists work to communicate businesses’ concerns about issues affecting their industries and markets

Assist in securing foreign marketsCampaign contrib tions of corporate related indi id alsCampaign contributions of corporate-related individuals

and PACs may provide influence


Major LawsMajor Laws AffectingMarketing DecisionsDecisions


TECHNOLOGICAL FORCES

•Impact of TechnologyImpact of TechnologyEffects include:

D iDynamicsReachSelf-Sustaining

•Adoption and Use of Technology


Technology(Monster.com has changed the way people search for jobs. Page 72)

Adoption and Use of TechnologyWould You Like to Buy a Fuel-Cell

Car?Car?Why or Why Not?y y


SOCIOCULTURAL FORCES

Th i fl i i tThe influences in a society and its culture(s) that change

l ’ ttit d b li fpeople’s attitudes, beliefs, norms, customs, and lif t llifestyles.


Top Trends That Changed America

1. Diversity: Record immigration changes the face of the nation2. 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 y4. Globalization: One world, increasingly one economy.5. Global warming: Whatever the cause, weather patterns change.6 Gay rights: From statehouses to military cultural issues grow6. Gay rights: From statehouses to military, cultural issues 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.


Issues Of Sociocultural Forces

Demographics and Diversity Characteristics:

Age, gender, race, ethnicity

Marital/parental status, income, education

Impact on Marketers?

• Cultural ValuesCultural Values

Health

Family

Environment


Others??

Chapter03

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