The Changing Marketing Environment Chapter 3

The Uncontrollable Environment This chapter takes an in-depth look at the uncontrollable marketing environment in Canada today. Organizations cannot effect the marketing environment, instead they are affected by it. Successful organizations spot trends in the environment and capitalise on these trends.

The Environmental Forces Remembering from Chapter 1, The uncontrollable factors include: Social Forces Economic Forces Technological Forces Competitive Forces Regulatory Forces

The Environmental Forces Social Forces Social forces relate to changes, and events that are occurring in society. Key indicators of change are: Demographic Shifts Demographics is a study/measure of peoples ages, sex, income levels, where they live, and ethnicity. Be aware or key terms such as Mature Housholds, Baby Boomers, Generation X, Blended Families and Regional Marketing. Cultural Changes Culture is a reflection of a societies shared values and Beliefs. Attitudes are changing and so is the makeup of our society. People are more conscious of Value and the Natural Environment

The Environmental Forces Economic Forces Economics deals with issues of income and expenditures in our society. Key measures of change in economic conditions arise from changes in: The Canadian economy at large (macroeconomics) Consumer Income Gross Income - Taxes = Disposable Income Disposable Income - necessities = Discretionary Income

The Environmental Forces Technological Forces Technology is changing faster than ever. Witness how quickly your new computer will become obsolete. This rapid change poses quite a large challenge for many organizations. See Social Media Slideshow E-Business The Internet has made doing business anywhere & anytime possible.

The Environmental Forces Competitive Forces Competition refers to the number of alternatives a consumer has when buying a particular product or service. There are varying degrees of competitive environments. Monopoly - No Competition - only one seller Oligopoly - Limited Competition - Two or three sellers Monopolistic Competition - Many sellers offering substitutable products (Coke, Pepsi, Orange Juice) Pure Competition - Many sellers selling similar or same products.

The Environmental Forces Components of Competition Barriers to Entry Competition may affect a company’s ability to enter a market easily. There may be many Barriers to Entry in place to limit the growth of competition Suppliers of raw material may help limit competition in an industry by refusing to sell to a new entrant. Buyers of products may aid in limited competition by being reluctant to buy from an new entrant into the market. Competitors may try to limit competition buy forcing new entrants out of the market. Global Competition has helped to increase the overall level of competition. Many companies are forming world-wide partnerships called Strategic Alliances.

The Environmental Forces Regulatory Forces Regulation is a basic set of rules/laws set down by either the industry in question (self-regulation) or by government that effects how that business operates. Most regulation is designed to: Protect Customers Protect Competition To stem off government imposed regulation, many industries have decided to self-regulate. Consumerism is a movement among consumers to fight for better protection from bad or corrupt business practices and bad products.