Chapter 4 Scanning the Marketing Environment Chapter 4 Scanning the Marketing Environment STEP????

Kotler on Marketing Today you have to run faster to stay in place.

Companies often fail to recognise how changes in the environment may influence their ultimate performance. GM, BMW

Managers must recognize the influence of environmental forces on marketing by anticipating, reacting and adapting to external forces ENVIRONMENTAL OPPORTUNITIES ENVIRONMENTAL CONSTRAINTS Marketing Decision Making

 Tracking Trends & Identifying Opportunities in the Marketing Environments: Macroenvironment -- BIG Picture Macroenvironment -- BIG Picture Microenvironment -- Closer-In Microenvironment -- Closer-In Internal environment -- you & me Internal environment -- you & me

ENVIRONMENTAL SCANNING The collection and interpretation of information about environmental forces that may affect the future of an organization. Practice of tracking external changes that can affect markets, including demand for goods and services

The Business World is like an Orange... … you’ve got to peel away a few layers to get to the good stuff!

Peeling the “Orange” Target Consumers Product PlacePrice Promotion Purchasing R&D Production M arketin g Competitors Intermediaries Publics Suppliers Demographic Economic Technological Natural Political Legal Social Cultural Engineering Logistics Finance Accounting

Marketing Environment Marketing Environment -- the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers. Marketing Environment -- the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers. Macroenvironment - larger societal forces that affect the microenvironment. Macroenvironment - larger societal forces that affect the microenvironment. Microenvironment - forces close to the company that affect its ability to serve its customers. Microenvironment - forces close to the company that affect its ability to serve its customers. Internal environment – other departments and non-marketing personnel within the organization. Internal environment – other departments and non-marketing personnel within the organization.

 Economic Environment  Income Distribution  Savings, Debt, and Credit Availability Identifying and Responding to the Major Macroenvironment Forces

 Natural Environment  Shortage of Raw Materials  Increased Energy Cost  Anti-Pollution Pressures  Changing Role of Governments Identifying and Responding to the Major Macroenvironment Forces

 Technological Environment  Accelerating Pace of Change  Unlimited Opportunities for Innovation Identifying and Responding to the Major Macroenvironment Forces

 Varying R&D Budgets  Increased Regulation of Technological Change  Political-Legal Environment  Legislation Regulating Business  Growth of Special-Interest Groups  Consumerist movement Identifying and Responding to the Major Macroenvironment Forces

 Social-Cultural Environment  Views of themselves  Views of others  Views of organizations  Views of society  Views of nature  Views of universe Identifying and Responding to the Major Macroenvironment Forces

 High Persistence of Core Cultural Values  Existence of subcultures  Subcultures  Shifts of Secondary Cultural Values Through Time Identifying and Responding to the Major Macroenvironment Forces

The Company’s Microenvironment Suppliers - provide the resources needed to produce goods and services and are an important link in the “value delivery system”. Marketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers. i.e. resellers. Customers - types of markets that purchase a company’s goods and services.

Competitors - those who serve a target market with similar products and services against whom a company must gain strategic advantage. Competitors - those who serve a target market with similar products and services against whom a company must gain strategic advantage. Publics - any group that perceives itself having an interest in a company’s ability to achieve its objectives. Publics - any group that perceives itself having an interest in a company’s ability to achieve its objectives.

The Internal Environment The Internal Environment has to do with the other employees in your company. It includes not only your department, but all departments within the company. When all departments are pulling in the same direction, the company has a legitimate chance for success.

Responding to the Marketing Environment Environmental Management Perspective Taking a proactive approach to managing the microenvironment and the macroenvironment by taking aggressive (rather than passive) actions to affect the publics and forces in the marketing environment.