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Presentation on theme: "SCANNING THE MARKETING ENVIRONMENT"— Presentation transcript:


2 External Marketing Environment
Demographics Social Change Economic Conditions Political & Legal Factors Technology Competition Environmental Scanning Target Market Product Distribution Promotion Price External Environment is not controllable Ever-Changing Marketplace Notes: This slide (exhibit 2.4) demonstrates the continuous evolution in the external marketing environment. The external environmental factors include demographics, social change, economic conditions, political and legal factors, technology, and competition. The external environment can not be controlled by management. However, the marketing mix (the Four Ps) can be controlled and reshaped to influence the target market. The target market is a defined group that is most likely to buy a firm’s products. Discussion/Team Activity: Discuss the evolution and changes in the computer industry during the last twenty years. How has the external environment changed? How has the target market and marketing mix changed? What external environmental conditions are challenging the computer industry today? What reshaping would you recommend to enhance the drop in computer sales?

3 An environmental scan of today’s marketplace

4 Social Forces- The Poverty of Time
A lack of time to do anything but work, commute to work, handle family situations, do housework, shop, eat, sleep... Notes: Consumers place value on nonmaterial accomplishments, such as having control of their lives and taking time off work. This was clearly demonstrated after the September 11 terrorist attack. A poverty of time means that people will decrease the amount of time spent doing things they dislike. This includes performing less housework and home maintenance, and dining out more. The purchase of brand names makes buying decisions quicker and easier. Small shops are favored over large ones, and technology is used to reduce transaction times. Discussion/Team Activity: What businesses and services provide helpful solutions to the poverty of time issue?

5 SOCIAL FORCES- Demographics
The World Population at a Glance – 6.4 billion Growth in developing nations Shift of age structure of populations Rising income levels and living standards Implications?

6 Social Forces - Demographics
The U.S. Population – 297 Million Growth by immigration = niche markets Generational Cohorts Baby Boomers-‘46-’64 Generation X-’65-’76 Generation Y-’77-’94 - (Millennials) techno-savvy, live for today -Increased earnings-seek youth -Well educated, more tolerant, practical

7 SOCIAL FORCES Demographics
Population Shifts toward West & South – Why? Metropolitan Statistical Area – % 50,000- urban center; suburban collar up to 2.5M Ex-Chicago Micropolitan Statistical Area % 10,000-50,000 urban center; large suburb collar Ex-Carbondale

8 Macroeconomic Conditions
ECONOMIC FORCES -Economy Macroeconomic Conditions Inflation-rise in prices without rise in wages Recession-drop in income, production and employment Microeconomic Conditions Consumer Income Gross Income – 100% of earnings Disposable Income-85% of earnings Discretionary Income-15% of earnings

9 ECONOMIC FORCES Disposable vs Discretionary income Implications?

10 Income Distribution of U. S. Households

11 Technological Factors
New technology is a weapon against inflation and recession U.S. excels at basic research Japan excels at applied research Information technology and the Internet have increased productivity


13 Protecting Competition
REGULATORY FORCES Protecting Competition Sherman Antitrust Act (1890) – no monopolies Clayton Act (1914)- no monopoly activity Robinson-Patman Act (1936)- no differential pricing to undercut “little” guy

14 Product-Related Regulation
REGULATORY FORCES Product-Related Regulation Company Protection Patent Law -for ideas and inventions Copyright Law -for written works Digital Millennium Copyright Act (1998) -for DVD’s, MP3’s & software

15 Product-Related Regulation
REGULATORY FORCES Product-Related Regulation Consumer Protection Nutritional Labeling & Education Act (1990) Consumer Product Safety Act (1972) Consumer Product Safety Commission The above and other laws came about due to cultural shift towards Consumerism

16 Advertising and Promotion-Related Legislation
REGULATORY FORCES Advertising and Promotion-Related Legislation FTC Act of 1914-no deceptive ads or practices Penalties are: Cease and Desist Order Corrective Advertising Do Not Call Registry Children’s online privacy Protection Act 1998 CAN-SPAM Act (2004)

17 Environmental Scanning
Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.

18 Demographics Demographics describes a population according to selected characteristics such as age, gender, ethnicity, income, and occupation.

19 Baby Boomers Baby boomers is the generation of children born between 1946 and 1964.

20 Generation X Generation X includes the 15% of the U.S. population born between 1965 and 1976.

21 Generation Y Generation Y includes the 72 million Americans born between 1977 and 1994.

22 Culture Culture incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group.

23 Economy The economy pertains to the income, expenditures, and resources that affect the cost of running a business and household.

24 Technology Technology refers to inventions from basic engineering research or innovations from applied science research.

25 Competition Competition refers to the alternative firms that could provide a product to satisfy a specific market’s need.

26 Consumerism Consumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions.


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