1. The Marketing Environment

2. THE MARKETING ENVIRONMENT
The external forces that directly or indirectly influence a firm’s acquisition and allocation of resources and its creation of products

3. Uncontrollable Factors
Social
Economic
Product
Price
Place
Promotion
Customer
Technological
Regulatory
Competitive

4. THE ENVIRONMENT AFFECTS EVERYONE

5. Proper Scan Identify CORRECT environment Identify key facts and trends
Proper scale: global, national, regional, local
Proper industry
Determine key competitors
Identify key facts and trends
Earlier is better
Assess impact quickly/accurately
Localize trends if business is local
Use scan to make forward-looking decisions

6. Competitive Forces
Competition: firms that market similar or substitute products
Who does your customer consider when looking to satisfy the need for what you do?
When analyzing competition:
Consider the competitive structure
Identify key competitors
SWOT
Competitive advantages
Marketing mix

7. Total Budget (Indirect) Competitors
Types of Competition
Brand Competitors
Product Competitors
Generic Competitors
Total Budget (Indirect) Competitors

8. Competitive Structures
Monopoly
One competitor
Many, typically big, barriers
No close product substitutes
Maintain monopoly status
No competition
Pure competition

9. Competitive Structures
Oligopoly
Few competitors
Some barriers
Homogeneous or differentiated products
Focus on competitor reactions to events
No competition
Pure competition

10. Competitive Structures
Monopolistic Competition
Many competitors
Fewer barriers
Product differentiation, many substitutes
Focus on differentiating product/brand
No competition
Pure competition

11. Competitive Structures
Pure Competition
Unlimited competitors
no barriers to entry
Countless substitutes
Theoretical situation
No competition
Pure competition

12. Economic Forces
Economic Conditions
Buying Power
Willingness to Spend

13. Business Cycle A pattern of economic fluctuations that has four stages
Prosperity
Recession
Depression
Recovery

14. Buying Power and Willingness to Spend
Buying Power = resources (typically money) that can be traded in an exchange
Gross income: total income
Disposable income: after tax money used for necessities
Discretionary income: money left over after covering taxes and necessities
Willingness to Spend is
closely related to Ability to Buy
“Cash or credit”

15. Legal/Regulatory and Political Forces
Legislation
Legal decisions by courts
Regulatory agencies
Self-regulatory forces
Marketers
Adjust to conditions
Influence through contributions

16. Legal and Regulatory Forces
Regulatory Agencies
Federal Trade Commission (FTC)
Food and Drug Administration (FDA)
Federal Communications Commission (FCC)
Environmental Protection Agency (EPA)
Self-Regulatory Forces
Better Business Bureau
National Advertising Review Board (NARB)

17. Technology
Technology is the application of knowledge and tools to solve problems and/or perform tasks more efficiently
Inventions or innovations

18. Technology Characterized by:
Falling costs
Increasingly new products/rapid obsolescence of old products
Can transform entire industries and/or societies

19. Social
The influences in a society and its culture(s) that change people’s attitudes, values and/or lifestyles
Examples
Demographic shifts
“Going green”
Increasing customer sophistication
Population migration