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Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-1 SCANNING THE MARKETING ENVIRONMENT C HAPTER.

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Presentation on theme: "Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-1 SCANNING THE MARKETING ENVIRONMENT C HAPTER."— Presentation transcript:

1 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-1 SCANNING THE MARKETING ENVIRONMENT C HAPTER

2 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-2 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 1.Explain how environmental scanning provides information about social, economic, technological, competitive, and regulatory forces. 2.Describe how social forces such as demographics and culture and economic forces such as macroeconomic conditions and consumer income affect marketing.

3 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-3 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 3.Describe how technological changes can affect marketing. 4.Discuss the forms of competition that exist in a market, key components of competition, and the impact of competition on corporate structures.

4 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-4 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: 5.Explain the major legislation that ensures competition and regulates the elements of the marketing mix.

5 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-5 IT’S SHOW TIME!

6 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-6 Apple iPod Video How has the entertainment world changed?

7 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-7 ENVIRONMENTAL SCANNING IN THE NEW MILLENNIUM Environmental Scanning An Environmental Scan of Today’s Marketplace

8 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-8 FIGURE 3-1 FIGURE 3-1 Environmental forces affecting the organization, as well as its suppliers and customers

9 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-9 FIGURE 3-2 FIGURE 3-2 An environmental scan of today’s marketplace

10 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-10 SOCIAL FORCES Social Forces Demographics  The World Population at a Glance  The U.S. Population  Generational Cohorts Baby Boomers Baby Boomers Generation X Generation X Generation Y Generation Y Generational Marketing Generational Marketing Millennials Millennials

11 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-11 Olay Total Effects Which generational cohort is being reached?

12 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-12 American Express Which generational cohort is being reached?

13 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-13 DKNY Kids Which generational cohort is being reached?

14 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-14 Motorola Which generational cohort is being reached?

15 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-15 SOCIAL FORCES Demographics  Population Shifts Metropolitan Statistical Area Metropolitan Statistical Area Statistical Areas Statistical Areas Micropolitan Statistical Area Micropolitan Statistical Area Metropolitan Divisions Metropolitan Divisions Combined Statistical Areas Combined Statistical Areas

16 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-16 SOCIAL FORCES Demographics  Racial and Ethnic Diversity Multicultural Marketing Multicultural Marketing Culture  Changing Values

17 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-17 FIGURE 3-3 FIGURE 3-3 Racial and ethnic concentrations in the United States (excluding whites)

18 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-18 Concept Check 1. Describe three generational cohorts. A: (1) Baby boomers is the generation born between 1946 and (2) Generation X is the 15 percent of the U.S. population born between 1965 and (3) Generation Y is the 72 million Americans born between 1977 and 1994.

19 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-19 Concept Check 2. Why are many companies developing multicultural marketing programs? A: (1) The racial and ethic diversity of the U.S. is changing rapidly due to the increases in the African American, Asian, and Hispanic populations, which increases their economic impact. (2) An accurate understanding of the culture of each group is essential if marketing efforts are to be successful.

20 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-20 Concept Check 3. How are important values such as “health and fitness” reflected in the marketplace today. A: Millions of Americans are trying to live a healthier lifestyle. In response, companies have developed vitamins, exercise equipment, fitness drinks, magazines, and other products to target these consumers.

21 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-21 ECONOMIC FORCES Economy Macroeconomic Conditions  Gross Income  Disposable Income Consumer Income  Discretionary Income

22 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-22 FIGURE 3-4 FIGURE 3-4 Income distribution of U. S. households

23 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-23 Cunard Queen Mary What happens when discretionary income rises?

24 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-24 TECHNOLOGICAL FORCES Technology Technology of Tomorrow Technology’s Impact on Customer Value

25 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-25 Memorex Thumb Drive What products might be replaced with this?

26 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-26 Napster What products might be replaced with this?

27 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-27 LG Plasma Screen TV What products might be replaced with this?

28 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-28 Bayer How does technology change the marketplace?

29 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-29 TECHNOLOGICAL FORCES Electronic Business Technologies  Intranet  Extranets  Marketspace Marketspace  Electronic Commerce

30 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-30 COMPETITIVE FORCES Competition Alternative Forms of Competition  Pure Competition  Monopolistic Competition  Oligopoly  Pure Monopoly Small Businesses as Competitors

31 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-31 FIGURE 3-A FIGURE 3-A Continuum of competition

32 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-32 Concept Check 1. What is the difference between a consumer’s disposable and discretionary income? A: Disposable income is the money a consumer has left after paying taxes to use for food, clothing, and shelter. Discretionary income is the money that remains after paying taxes for necessities.

33 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-33 Concept Check 2. How does technology impact customer value? A: (1) Consumers assess value on the basis of other dimensions, such as quality, service, and relationships, due to the decline in the cost of technology. (2) Technology provides value through the development of new products. (3) Technology has changed the way existing products are produced through recycling and precycling.

34 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-34 Concept Check 3. In pure competition there are a ____ number of sellers. large

35 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-35 REGULATORY FORCES Regulation Protecting Competition  Sherman Antitrust Act (1890)  Clayton Act (1914)  Robinson-Patman Act (1936)

36 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-36 REGULATORY FORCES  Company Protection Patent Law Patent Law Product-Related Regulation Copyright Law Copyright Law Digital Millennium Copyright Act (1998) Digital Millennium Copyright Act (1998)

37 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-37 REGULATORY FORCES  Consumer Protection Nutritional Labeling Nutritional Labeling Consumerism Consumerism Product-Related Regulation Consumer Product Safety Act (1972) Consumer Product Safety Act (1972)  Consumer Product Safety Commission Consumer Product Safety Commission

38 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-38 REGULATORY FORCES  Both Company and Consumer Protection Landham Act (1946) Landham Act (1946) Trademark Law Revision Act (1988) Trademark Law Revision Act (1988) Madrid Protocol (2003) Madrid Protocol (2003) Federal Dilution Act (1995) Federal Dilution Act (1995) Product-Related Regulation

39 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-39 Kleenex, Band-Aid, and Q-Tips Becoming generic trademarks?

40 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-40 REGULATORY FORCES Pricing-Related Legislation  Exclusive Dealing Distribution-Related Legislation  Requirement Contracts  Exclusive Territorial Distributorships  Tying Arrangement

41 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-41 REGULATORY FORCES Advertising- and Promotion-Related Legislation Cease and Desist Order Cease and Desist Order Corrective Advertising Corrective Advertising Control through Self-RegulationControl through Self-Regulation  FTC Act of 1914  Do Not Call Registry  CAN-SPAM Act (2004)

42 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-42 BBBOnline Does self-regulation work?

43 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-43 Concept Check 1. The _______________ Act was punitive toward monopolies, whereas the _______ Act was preventative. Sherman Antitrust Clayton

44 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-44 Concept Check 2. Describe some of the recent changes in trademark law. A: The Trademark Law Revision Act (1988) allows companies to secure rights to a name before its actual use by declaring an intent to use the name. Also, the U.S. Supreme Court recently ruled that a company now may obtain trademarks for colors associated with their products.

45 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-45 Concept Check 3. How does the Better Business Bureau encourage companies to follow its standards for commerce? A: Companies must agree to follow BBB standards before they are allowed to display the BBB logo.

46 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-46 USING THE WEB TO SCAN THE ENVIRONMENT GOING ONLINE

47 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide What is the current (to the minute) population of the United States? What is the projected population of the United States in 2050? Going Online 2050Current

48 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide What population or social trends can be identified with UN information? Going Online

49 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-49 FLYTE TYME PRODUCTIONS, INC.: THE BEST IDEA WINS VIDEO CASE 3

50 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-50 VIDEO CASE 3 Flyte Tyme Productions

51 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide Based on the case information and what you know about today’s music industry, conduct an environmental scan for Flyte Tyme to identify key trends. For each of the five environmental forces (social, economic, technological, competitive, and regulatory), identify trends that are likely to influence it in the near future. VIDEO CASE 3 Flyte Tyme Productions

52 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide About 80 percent of start-up businesses fail within five years. What reasons explain Flyte Tyme’s continuing success? VIDEO CASE 3 Flyte Tyme Productions

53 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide What marketing factors and actions must Jimmy Jam and Terry Lewis consider in developing music for (a) a new, unknown artist and (b) an established artist like Janet Jackson? VIDEO CASE 3 Flyte Tyme Productions

54 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide What promotional and distribution strategies should Flyte Tyme use to get its music in front of prospective buyers? VIDEO CASE 3 Flyte Tyme Productions

55 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-55 TRENDS THAT MAY CHANGE MARKETING IN THE FUTURE SUPPLEMENTAL LECTURE NOTE 3-1

56 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-56 CONDUCTING AN ENVIRONMENTAL SCAN FOR A PANASONIC DVR IN-CLASS ACTIVITY 3-1

57 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-57 Panasonic Digital Video Recorder TV Ad

58 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-58 Panasonic DVR Print Ads (Brochure)

59 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-59

60 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-60 COMPETITIVE INTELLIGENCE: FULD & COMPANY IN-CLASS ACTIVITY 3-2

61 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-61 FIGURE 3-B FIGURE 3-B Porter’s five competitive forces

62 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-62 Fuld & Company Brochure

63 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-63 Environmental Scanning Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.

64 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-64 Social Forces The social forces of the environment include the demographic characteristics of the population and its values.

65 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-65 Demographics Demographics describes a population according to selected characteristics such as age, gender, ethnicity, income, and occupation.

66 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-66 Baby Boomers Baby boomers is the generation of children born between 1946 and 1964.

67 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-67 Generation X Generation X includes the 15% of the U.S. population born between 1965 and 1976.

68 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-68 Generation Y Generation Y includes the 72 million Americans born between 1977 and 1994.

69 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-69 Multicultural marketing consists of combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races. Multicultural Marketing

70 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-70 Culture incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group. Culture

71 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-71 The economy pertains to the income, expenditures, and resources that affect the cost of running a business and household. Economy

72 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-72 Technology refers to inventions or innovations from applied science or engineering research. Technology

73 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-73 Marketspace is an information- and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings. Marketspace

74 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-74 Competition refers to the alternative firms that could provide a product to satisfy a specific market’s need. Competition

75 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-75 Regulation consists of restrictions state and federal laws place on business with regard to the conduct of its activities. Regulation

76 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-76 Consumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions. Consumerism

77 Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 3-77 Self-regulation is an alternative to government control where where an industry attempts to police itself. Self-Regulation


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