Scanning Environment

8/13/2019 Scanning Environment

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Gathering Information and

Scanning the Environment


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Needs and Trends

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Fadsshort-lived and without social, economic,and political significance.

Trendsdirection or sequence of events that hassome momentum and durability.

Megatrendslarge social, economic, political,and technological changes


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Trends Shaping the

Business Landscape

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Profound shifts in centers ofeconomic activity(Asia(excluding Japan)13% ofWorld GDP; Western Europe >30%)

Increases in public-sectoractivity(aging of populationnew levels of efficiency andcreativity from public sector)

Change in consumerlandscape(billion newconsumers to enter globalmarketplace in next decade andU.S. Latinos 2015 spendingpower equivalent to 60% ofChinese consumers.

Technological connectivity

(change way people live) Scarcity of well-trained talent

(33 mm university-educatedyoung professionals indeveloping countries is morethan double the number indeveloped ones

Increase in demand fornatural resources(Oil demandprojected to grow by 50% innext two decades and watershortages may constraint growthin many countries)

Emergence of new globalindustry structures(barbell-like structurefew large, narrowmiddle, lot of smallercompanies)

Ubiquitous access toinformation(open sourceapproach)

Management shifts from art toscience(algorithmic decision-making techniques and

sophisticated software) Increase in scrutiny of big

business practices(be able toargue and demonstrateintellectual, social, andeconomic case for business)


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Environmental Forces

3-4

Demographic

Economic

Socio-cultural

Natural Technological

Political-legal


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What is Demographic environment?

The demographic environment includes thestudy of human populations in terms of:

size,

density,

location, age,

sex,

race,

occupation,

other statistical information.


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Population and Demographics

3-6

Population growth

Population age mix

Ethnic markets

Educational groups

Household patterns

Geographical shifts


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World Population Growth World population shows explosive growth, in

2000 it was 6.1 billon and it is projected toexceed 7.9 billon by 2025I

India

Close to one billion population

Growth rate over 2% per annum

Life expectancy from 48 years in 1947 to 70 years in 2001

Explosive population growth has majorimplication for business.

For Example--GOLDMAN SCAHS report has

projected that India in next 30 year might growup to 3rdlargest economy in world


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Population Age Mix

In population age mix marketers are increasinglyrecognizing the potential of youth segment(marketers are focused on youth )

For example--Titan the well-known watch marketer

Introduced a range of Sunglasses which is callEye Gear under the brand Fast Track


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LOWEST AVERAGE AGE

aVERAGE AGE 25 YEARS IS THE LOWEST ASCOMPARED TO OTHER COUNTRIES.

IT WILL BE 28 YEARS IN 2020 AND 53 WOULDBE UNDER THE AGE OF 30 BY 2020


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Copyright 2009 Pearson Education,

Inc. Publishing as Prentice Hall3-10


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Household Patterns

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http://www.fmf.uni-lj.si/~mohar/Pict/Gore97BB.jpghttp://www.gay.com/


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ECONOMIC ENVIRONMENT

Market requires purchasing power as well aspeople.

Purchasing power depends upon current income,

prices, debt, credit, saving etc.

Marketers must pay careful attention to trends

affecting purchasing power.


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OF ECONOMIC SLOWDOWN

20 JAN 2008 (Economic times)


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INCOME DISTRIBUTION

Macroeconomic indicators provides overallhealth of economy as well as direction of

economic growth.

Marketers needs to understand the distribution of

income to make more meaningful conclusions.


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Driven from Consumption Throughout the 1.1 Billion

Population

5-7 million

Super Rich

7080 million

Afford Cars, Private Healthcare &

Foreign travel

250 - 300 million

Afford goods like Refrigerators , Scooters& Colour TVs

600-700 million (Generally Rural)

Afford simple industrial productse.g. bicycles , radios , textiles

Poverty Line = income less than $ 1/day

Source: McKinsey,

60 % of Indias population are under 24 years
http://images.google.com/imgres?imgurl=http://upload.wikimedia.org/wikipedia/en/thumb/2/23/Indian_Couple_on_Bicycle.jpg/180px-Indian_Couple_on_Bicycle.jpg&imgrefurl=http://en.wikipedia.org/wiki/Bicycle&h=250&w=180&sz=15&hl=en&start=1&tbnid=Vj2HXGk35I5f2M:&tbnh=111&tbnw=80&prev=/images?q=lower+class+indians&ndsp=20&svnum=10&hl=en&lr=&sa=N


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With High Private ConsumptionGDP

US$ 935 billion

Private Consumption

US$580 Billion(62%)

Public Spending and CapitalFormation

US$ 355Billion (38%)

RetailUS$ 342 Billion

(59%)

Non RetailUS$ 238 Billion

(41%)

Urban (5,100 towns)

US$ 154 Billion(45%)

Rural (6,27,000 villages)US$ 188 Billion

(55%)

Modern retailUS$ 12 billion8% of urban retail spends

Modern retailNegligible

Food

Apparel

Beverages

Footwear

Consumer

durables

Appliances

Stationery

Kitchen utensils

Furniture

Furnishings

Sports goods

Health & Beauty

Personal Care

Jewellery

Timing

Transport

CommunicationRecreation

CulturalServices

Education

Rent

UtilitiesOther Services

Source: Central Statistical Organization (CS0) and Technopak AnalysisConversion rate: 1 US$ = 40.86 Rs.


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Types of Industrial Structures

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Industrial

economies

Subsistenceeconomies

Raw-material-

exporting

economies

Industrializing

economies


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IndiaAn Industrializing

Economy

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Saudi Arabia

A Raw-Material Exporting Economy

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SOCIALCULTURAL

ENVIRONMENT

Purchasing power is directed

towards certain goods &services.

People absorb, unconsciously aworldview that defines relationship

to organization, to themselves, to

society, to nature, and to universe.


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Microsoft steps up on search R&D IN

EUROPE

This is because maximum usage is inEuropean countries.


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Social-Cultural Environment

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Views of themselves(pleasure seeker, self-realization, etc.) Views of others(concern about homeless, crime,

victims, social surrogatestelevision, home videogames, etc.)

Views of organizations(company downsizing andcorporate accounting scandals, etc.) Views of society(defend societypreservers; run

itmakers; can get fromtakers; change itchangers; looking for something deeperseekers;

leave it--escapers Views of nature(natures fragility and finiteness) Views of the universe(religious, etc.)


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Most Popular

Indian Leisure Activities

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Reading TV Watching

Spending time with

family

Going to movies

Going out to Eat

Computer activities Walking

Exercise

Listening to music Shopping


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Natural Environment

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Shortage of

raw materials

Increasedenergy costs

Anti-pollution

pressures

Governmental

protections


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NATURAL ENVIRONMENT

Deterioration of natural environment is majorconcern.

Cities like Mumbai, Bangalore etc. reached

dangerous levels.

Some regulation hit industries very hard--Steel

industry


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Microsofts environmental contribution

Microsoft announces a new green wireless mouse.

This is environment friendly because it uses six

month long battery.

K t A idi


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Keys to Avoiding

Green Marketing Myopia

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Consumer Value Positioning(designenvironmental products to perform as well asalternatives; products that have healthbenefits; fixed price for renewable energy

products) Calibration of Consumer Knowledge

(connect environmental products attributeswith desired consumer valuepesticide-free;

solar powered); use of internet. Credibility of Product Claims

(environmental product and consumer benefitclaims)


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POLITICAL LEGAL


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POLITICAL- LEGAL

ENVIRONMENT

Marketing decisions are strongly affected by

development in political and legal environment.

Increase in business legislation Protecting the welfare of consumers

Gilvec Patent, Consumer protection act, RTI,

weights and measures Food bill , NAREGA


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Political-Legal Environment

Increase in

business legislation

(e.g., unfair competition,

protect society)

Growth of special

interest groups

(e.g., consumerist movement)

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