Presentation on theme: "SCANNING THE MARKETING ENVIRONMENT"— Presentation transcript:
1 SCANNING THE MARKETING ENVIRONMENT CHAPTERSCANNING THE MARKETING ENVIRONMENT
2 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Explain how environmental scanning provides information about social, economic, technological, competitive, and regulatory forces.Describe how social forces such as demographics and culture and economic forces such as macroeconomic conditions and consumer income affect marketing.
3 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Describe how technological changes can affect marketing.Discuss the forms of competition that exist in a market, key components of competition, and the impact of competition on corporate structures.
4 AFTER READING THIS CHAPTER YOU SHOULD BE ABLE TO: Explain the major legislation that ensures competition and regulates the elements of the marketing mix.
6 Apple iPod Video How has the entertainment world changed?
7 ENVIRONMENTAL SCANNING IN THE NEW MILLENNIUM An Environmental Scan of Today’s Marketplace
8 FIGURE 3-1 Environmental forces affecting the organization, as well as its suppliers and customers
9 FIGURE 3-2 An environmental scan of today’s marketplace
10 SOCIAL FORCES Social Forces Demographics The World Population at a GlanceThe U.S. PopulationGenerational CohortsBaby BoomersMillennialsGeneration XGenerational MarketingGeneration Y
11 Olay Total Effects Which generational cohort is being reached?
12 American Express Which generational cohort is being reached? This advertisement is an example of how companies are responding to the economic trend toward money management as many workers approach retirement. The copy reads “Imagine feeling prepared for retirement.”
13 DKNY Kids Which generational cohort is being reached?
14 Motorola Which generational cohort is being reached?
15 SOCIAL FORCES Demographics Population Shifts Statistical Areas Metropolitan Statistical AreaMicropolitan Statistical AreaMetropolitan DivisionsCombined Statistical Areas
16 SOCIAL FORCES Demographics Culture Racial and Ethnic Diversity Multicultural MarketingCultureChanging Values
17 FIGURE 3-3 Racial and ethnic concentrations in the United States (excluding whites)
18 1. Describe three generational cohorts. Concept Check1. 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 2. Why are many companies developing multicultural marketing programs? Concept Check2. 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 Concept Check3. 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 Macroeconomic Conditions ECONOMIC FORCESEconomyMacroeconomic ConditionsConsumer IncomeGross IncomeDisposable IncomeDiscretionary Income
22 FIGURE 3-4 Income distribution of U. S. households
23 What happens when discretionary income rises? Cunard Queen MaryWhat happens when discretionary income rises?
24 TECHNOLOGICAL FORCESTechnologyTechnology of TomorrowTechnology’s Impact on Customer Value
25 Memorex Thumb Drive What products might be replaced with this?
26 Napster What products might be replaced with this?
27 What products might be replaced with this? LG Plasma Screen TVWhat products might be replaced with this?
28 Bayer How does technology change the marketplace? The technological trend created by advances in cancer drugs is illustrated by this Bayer ad. Their Science for a Better Life” campaign describes Bayer HealthCare’s efforts to “improve both cancer diagnosis and the monitoring of cancer therapy.”
29 Electronic Business Technologies TECHNOLOGICAL FORCESElectronic Business TechnologiesMarketspaceElectronic CommerceIntranetExtranets
30 Alternative Forms of Competition COMPETITIVE FORCESCompetitionAlternative Forms of CompetitionPure CompetitionMonopolistic CompetitionOligopolyPure MonopolySmall Businesses as Competitors
31 FIGURE 3-A Continuum of competition This figure compares the four forms of competition on three dimensions.
32 Concept Check1. 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 2. How does technology impact customer value? Concept Check2. 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 3. In pure competition there are a ____ number of sellers. large Concept Check3. In pure competition there are a ____ number of sellers.large
41 Advertising- and Promotion-Related Legislation REGULATORY FORCESAdvertising- and Promotion-Related LegislationFTC Act of 1914Cease and Desist OrderCorrective AdvertisingDo Not Call RegistryCAN-SPAM Act (2004)Control through Self-Regulation
42 Does self-regulation work? BBBOnlineDoes self-regulation work?
43 Concept Check1. The _______________ Act was punitive toward monopolies, whereas the _______ Act was preventative.Sherman AntitrustClayton
44 2. Describe some of the recent changes in trademark law. Concept Check2. 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 Concept Check3. 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 USING THE WEB TO SCAN THE ENVIRONMENT GOING ONLINE
47 Going Online1. What is the current (to the minute) population of the United States? What is the projected population of the United States in 2050?Current2050
48 Going Online2. What population or social trends can be identified with UN information?
49 FLYTE TYME PRODUCTIONS, INC.: THE BEST IDEA WINS VIDEO CASE 3
51 VIDEO CASE 3 Flyte Tyme Productions 1. 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.
52 VIDEO CASE 3 Flyte Tyme Productions 2. About 80 percent of start-up businesses fail within five years. What reasons explain Flyte Tyme’s continuing success?
53 VIDEO CASE 3 Flyte Tyme Productions 3. 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?
54 VIDEO CASE 3 Flyte Tyme Productions 4. What promotional and distribution strategies should Flyte Tyme use to get its music in front of prospective buyers?
55 SUPPLEMENTAL LECTURE NOTE 3-1 TRENDS THAT MAY CHANGE MARKETING IN THE FUTURESUPPLEMENTAL LECTURE NOTE 3-1
56 CONDUCTING AN ENVIRONMENTAL SCAN FOR A PANASONIC DVR IN-CLASS ACTIVITY 3-1
60 COMPETITIVE INTELLIGENCE: FULD & COMPANY IN-CLASS ACTIVITY 3-2
61 FIGURE 3-B Porter’s five competitive forces This figure displays the five competitive forces that drive competition in an industry. The model is based on Michael Porter’s work on competitive analysis.
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 Social ForcesThe social forces of the environment include the demographic characteristics of the population and its values.
65 DemographicsDemographics describes a population according to selected characteristics such as age, gender, ethnicity, income, and occupation.
66 Baby BoomersBaby boomers is the generation of children born between 1946 and 1964.
67 Generation XGeneration X includes the 15% of the U.S. population born between 1965 and 1976.
68 Generation YGeneration Y includes the 72 million Americans born between 1977 and 1994.
69 Multicultural Marketing Multicultural marketing consists of combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races.
70 CultureCulture incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group.
71 EconomyThe economy pertains to the income, expenditures, and resources that affect the cost of running a business and household.
72 TechnologyTechnology refers to inventions or innovations from applied science or engineering research.
73 MarketspaceMarketspace is an information- and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings.
74 CompetitionCompetition refers to the alternative firms that could provide a product to satisfy a specific market’s need.
75 RegulationRegulation consists of restrictions state and federal laws place on business with regard to the conduct of its activities.
76 ConsumerismConsumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions.
77 Self-RegulationSelf-regulation is an alternative to government control where where an industry attempts to police itself.