1. SCANNING THE MARKETING ENVIRONMENT
CHAPTER 3

2. FIGURE 3-1 Environmental forces affecting the organization, as well as its suppliers and customers

3. SOCIAL FORCES Demographics The Population Trend
Mature household
The Baby Boom, Generation X, and Generation Y
Baby boomers
Generation X
Generation Y
Name some examples of demographics

4. Key US Demographic Trends
Changing Age Structure
Population is aging; many divisions
Changing American Family
Later marriage, fewer children, working
women, and nontraditional households
Geographic Shifts
Moving to the Sunbelt, suburbs,
“micropolitan areas”
Better-Educated & More White-Collar
Increased college attendance
and white-collar workers
Increasing Diversity
72% Caucasian, 13% African-American,
11% Hispanic & 3% Asian

5. Group Discussion
Identify a company that has done a good job of reacting to:
Baby Boomers, or
Generation X, or
Generation Y
What did the company do well?
Compare this company to one that has done a poor job. What did they do poorly?
Can you see how demographics can affect a company. External force that the company can not change, but must work with.

6. Social Forces The American Family Population Shifts
Blended family
Population Shifts
Racial and Ethnic Diversity

7. Social Forces Regional Marketing Culture
The Changing Attitudes and Roles of Women
Changing Values
Value consciousness

8. 1. Explain the term regional marketing.
Concept Check
1. Explain the term regional marketing.
A: A strategy of developing marketing plans to reflect specific area differences in taste, perceived needs, or interests.

9. 2. What are the marketing implications of blended families?
Concept Check
2. What are the marketing implications of blended families?
A: Products may have to be redesigned to reflect this societal change, such as Hallmark creating cards for step-parents, step-siblings, etc.

10. Economic Forces
Macroeconomic Conditions

11. Economic Forces
Gross Income
Total amount of money made in one year by a person, household or family unit
Disposable Income
Money left over after paying taxes
Discretionary Income
Money that remains after paying for taxes and necessities

12. Technology of Tomorrow Electronic Business Technologies
Technological Forces
Technology of Tomorrow
Electronic Business Technologies
Marketspace
Electronic commerce
Internet and World Wide Web
Commercial online services
Intranet
Extranets

13. Alternate Forms of Competition
Competitive Forces
Alternate Forms of Competition
Pure competition
Monopolistic competition
Oligopoly
Monopoly
Components of Competition
Barriers to Entry
Existing Competitors and Substitutes

14. FIGURE 3-E Continuum of competition

15. FIGURE 3-F The five competitive forces

16. Concept Check
1. What is the difference between a consumer’s disposable and discretionary income?
A: Disposable income is the money a consumer has left after paying taxes to use for food, clothing, and shelter. Discretionary income is the money that remains after paying for taxes and necessities.

17. 2. In pure competition there are _______ number of sellers. a large
Concept Check
2. In pure competition there are _______ number of sellers.
a large

18. Protecting Competition Product-Related Legislation
Regulatory Forces
Protecting Competition
Product-Related Legislation
Company Protection
Consumer Protection
Consumerism
Both Company and Consumer Protection

19. Regulatory Forces
Pricing Related Legislation
Distribution-Related Legislation
Advertising and Promotion-Related Legislation
Control Through Self-Regulation

20. Environmental Scanning
The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends is called environmental scanning.

21. Social Forces
The social forces of the environment include the demographic characteristics of the population and its values.

22. Demographics
Describing the population according to selected characteristics such as their age, gender, ethnicity, income, and occupation is referred to as demographics.

23. Mature Households
Mature households are headed by people over 50 years old and represent the fastest-growing age segment in the population.

24. Baby Boomers
The generation of children born between 1946 and 1964 is know as the baby boomers.

25. Generation X
Generation X includes the 15% of the U.S. population born between 1965 and 1976.

26. Generation Y
Generation Y refers to Americans born after 1976, the year that many baby boomers began having children.

27. Blended Family
A blended family is formed when divorced people remarry and merge into a single household.

28. Regional Marketing
Regional marketing focuses on developing marketing plans to reflect specific area differences in taste preferences, perceived needs, or interests.

29. Culture
Culture incorporates the set of values, ideas, and attitudes of a homogenous group of people that are transmitted from one generation to the next.

30. Value Consciousness
Value consciousness is the concern for obtaining the best quality, features, and performance of a product for a given price.

31. Economic Forces
The economy pertains to the income, expenditures, and resources that affect the cost of running a business and household.

32. Gross Income
The total amount of money made in one year by a person, household, or family unit is referred to as gross income.

33. Disposable Income
Disposable income is the money a consumer has left after paying taxes to use for food, shelter and clothing.

34. Discretionary Income
Discretionary income is the money that remains after paying for taxes and necessities.

35. Technology
Technology refers to inventions or innovations from applied science or engineering research.

36. Marketspace
Marketspace is an information- and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings.

37. Electronic Commerce
Any activity that uses some form of electronic communication in the inventory, exchange, advertisement, distribution, and payment of goods and services is often called electronic commerce

38. Internet
The Internet is an integrated global network of computers that gives users access to information and documents.

39. World Wide Web
The World Wide Web is part of the Internet that supports a retrieval system that formats information and documents into Web pages.

40. Commercial Online Services
Commercial online services offer electronic information and marketing services to subscribers who are charged a monthly fee.

41. Intranet
An Intranet is an Internet/Web based network used within the boundaries of an organization.

42. Extranets
Extranets use Internet-based technologies to permit communication between a company and its suppliers, distributors, and partners.

43. Regulation
Regulation consists of restrictions state and federal laws place on business with regard to the conduct of its activities.

44. Consumerism
Consumerism is a “grassroots” movement to increase the influence, power, and rights of consumers in dealing with institutions.

45. Competition
Competition refers to the alternative firms that could provide a product to satisfy a specific market’s needs.

46. Barriers to Entry
Barriers to entry are business practices or conditions that make it difficult for new firms to enter the market.

47. Self-Regulation
In self-regulation an industry attempts to police itself.