1. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Chapter 2 Environmental Analysis Marketing Gilbert A. Churchill, Jr. J. Paul Peter

2. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Environmental Scanning Slide 2-1 Environmental Scanning : the practice of tracking external changes that can affect markets, including demand for goods and services. Personal Computer Industry Typewriter Industry Home Security Industry Tourism Industry OpportunityThreat Technological Advances (Positive Change) Increase in Crime Rate (Negative Change)

3. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 2-2 Economic Environment definition: the overall economy, including business cycles, consumer income and spending pattern. Economic Environment Political and Legal Environment Social Environment Natural Environment Technological Environment Competitive Environment TM PP PP

4. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 2-3 Basic Pattern of a Business Cycle Figure 2.2 Level of Business Activity Time Prosperity Recession Recovery

5. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 2-4 The Political and Legal Environment definition: the laws, regulations and political pressures affecting marketers. Economic Environment Political and Legal Environment Social Environment Natural Environment Technological Environment Competitive Environment TM PP PP

6. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 2-5 The Social Environment definition: the people in a society and their values, beliefs and behaviors. Economic Environment Political and Legal Environment Social Environment Natural Environment Technological Environment Competitive Environment TM PP PP

7. Slide 2-6 Population Changes: 1990-2010 Figure 2.4 Percent gain 15.0 to 50.1 5.0 to 14.9 0 to 4.9 Loss Source: U.S. Bureau of the Census, Current population Reports, Series P-25. No. 1053, Projections of the population of States by Age, Sex, and race: 10\990 Alaska Hawaii

8. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 2-7 The Natural Environment definition: the natural resources available to or affected by the organization. Economic Environment Political and Legal Environment Social Environment Natural Environment Technological Environment Competitive Environment TM PP PP

9. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 2-8 The Technological Environment definition: scientific knowledge, innovations and inventions that result from research. Economic Environment Political and Legal Environment Social Environment Natural Environment Technological Environment Competitive Environment TM PP PP

10. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 2-9 Competitive Environment definition: all the organizations that could potentially create value for the organization’s customers. Economic Environment Political and Legal Environment Social Environment Natural Environment Technological Environment Competitive Environment TM PP PP

11. Types of Competitive Forces Threat of Substitute Products Bargaining Power of Buyers Rivalry among Existing Competitors Bargaining Power of Suppliers Threat of New Entrants Figure 2.5 Slide 2-10 Source: Adapted with permission from Michael F. Porter, “Industry Structure and Competitive Strategy: Keys to Productivity:, Financial Analysts Journal, July-August 1980. ©1980. The Financial Analysts Federation, Charlottesville, VA. All rights reserved.