Presentation on theme: "SCANNING THE MARKETING ENVIRONMENT"— Presentation transcript:
1 SCANNING THE MARKETING ENVIRONMENT CHAPTERSCANNING THE MARKETING ENVIRONMENT
2 External Marketing Environment DemographicsSocialChangeEconomicConditionsPolitical &Legal FactorsTechnologyCompetitionEnvironmentalScanningTarget MarketProductDistributionPromotionPriceExternal Environment is not controllableEver-ChangingMarketplaceNotes: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?
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 billionGrowth in developing nationsShift of age structure of populationsRising income levels and living standardsImplications?
6 Social Forces - Demographics The U.S. Population – 297 MillionGrowth by immigration = niche marketsGenerational CohortsBaby Boomers-‘46-’64Generation X-’65-’76Generation 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 2.5MEx-ChicagoMicropolitan Statistical Area %10,000-50,000 urban center; large suburb collarEx-Carbondale
8 Macroeconomic Conditions ECONOMIC FORCES-EconomyMacroeconomic ConditionsInflation-rise in prices without rise in wagesRecession-drop in income, production and employmentMicroeconomic ConditionsConsumer IncomeGross Income – 100% of earningsDisposable Income-85% of earningsDiscretionary Income-15% of earnings
9 ECONOMIC FORCESDisposable vs Discretionary incomeImplications?
11 Technological Factors New technology is a weapon against inflation and recessionU.S. excels at basic researchJapan excels at applied researchInformation technology and the Internet have increased productivity
15 Product-Related Regulation REGULATORY FORCESProduct-Related RegulationConsumer ProtectionNutritional Labeling & Education Act (1990)Consumer Product Safety Act (1972)Consumer Product Safety CommissionThe above and other laws came aboutdue to cultural shift towards Consumerism
16 Advertising and Promotion-Related Legislation REGULATORY FORCESAdvertising and Promotion-Related LegislationFTC Act of 1914-no deceptive ads or practicesPenalties are:Cease and Desist OrderCorrective AdvertisingDo Not Call RegistryChildren’s online privacy Protection Act 1998CAN-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 DemographicsDemographics describes a population according to selected characteristics such as age, gender, ethnicity, income, and occupation.
19 Baby BoomersBaby boomers is the generation of children born between 1946 and 1964.
20 Generation XGeneration X includes the 15% of the U.S. population born between 1965 and 1976.
21 Generation YGeneration Y includes the 72 million Americans born between 1977 and 1994.
22 CultureCulture incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group.
23 EconomyThe economy pertains to the income, expenditures, and resources that affect the cost of running a business and household.
24 TechnologyTechnology refers to inventions from basic engineering research or innovations from applied science research.
25 CompetitionCompetition refers to the alternative firms that could provide a product to satisfy a specific market’s need.
26 ConsumerismConsumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions.