Transcript Foundations of Marketing - Eurasia International University

of
MARKETING
Chapter
2
The
Environment
for Marketing
Decisions
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The Environment for Marketing Decisions
Chapter
2
Objectives
1. Identify the environmental factors that affect marketing decisions.
2. Identify three categories of competition faced by marketers, and
outline the issues to consider in developing a competitive
strategy.
3. Illustrate the association between marketing plans and the
technological environment.
4. Demonstrate how the sociocultural environment influences
marketing decisions.
5. Show how the economic environment has a bearing on marketing
planning.
6. Explain the major legislative framework that regulates marketing
activities.
2-1
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The Environment for Marketing Decisions
Chapter
2
Environmental Planning
• Process by which the marketing
manager gathers and sorts information
about the marketing environment.
2-2
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The Environment for Marketing Decisions
Chapter
2
Figure 2.1
Components of the Marketing Environment
Economic
Conditions
The
Marketing
Plan
Sociocultural
environment
Competition
Political-legal
climate
Customers
Technology
2-3
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The Environment for Marketing Decisions
Chapter
2
Competitive Environment
• The interactive process that occurs in
the marketplace in which different
organizations seek to satisfy similar
markets.
2-4
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The Environment for Marketing Decisions
Chapter
2
Types of Competition
• Inter-product or direct
• Product-substitute or indirect
• Alternative-gratification
2-5
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The Environment for Marketing Decisions
Chapter
2
Technological Environment
• The applications of knowledge based
on scientific discoveries, inventions,
and innovations.
2-6
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The Environment for Marketing Decisions
Chapter
2
Key Factors of the Technological
Environment
• Computer technology
• Internet
2-7
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The Environment for Marketing Decisions
Chapter
2
Sociocultural Environment
• The mosaic of societal and cultural
components that are relevant to the
organization’s business decisions.
2-8
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The Environment for Marketing Decisions
Chapter
2
Key Factors of the Sociocultural
Environment
• General readiness of society to accept
a marketing idea
• Trust and confidence in business
• Mixed society
• Towns and rural communities
• Gender
• Consumerism
2-9
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The Environment for Marketing Decisions
Chapter
2
Economic Environment
• Factors in a region or country that
affect the production, distribution, and
consumption of its wealth.
• Key elements are monetary resources,
inflation, employment, and productive
capacity.
2-10
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The Environment for Marketing Decisions
Chapter
2
Stages of the Business Cycle
•
•
•
•
Recession
Depression
Recovery
Prosperity
2-11
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Chapter
2
Inflation and Stagflation
Inflation
• Rising price level resulting in reduced
purchasing power for the consumer.
Stagflation
• High unemployment and a rising price
level at the same time.
2-12
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The Environment for Marketing Decisions
Chapter
2
Fiscal and Monetary Policy
Fiscal Policy
• Receipts and expenditures of
government.
Monetary Policy
• Manipulation of the money supply and
market rates of interest.
2-13
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2
Demarketing
• The process of cutting consumer
demand for a product, because the
demand exceeds the level that can
reasonably be supplied by the firm or
because doing so will create a more
favourable corporate image.
2-14
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The Environment for Marketing Decisions
Chapter
2
Political - Legal Environment
• The laws and interpretation of laws that
require firms to operate under
competitive conditions and to protect
consumer rights.
2-15
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The Environment for Marketing Decisions
Chapter
2
Key Factors in Political - Legal
Environment
• Free-enterprise society
• Competition Act
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The Environment for Marketing Decisions
Chapter
2
The Competition Act prohibits:
• Combinations that lessen competition.
• Mergers or monopolies detrimental to
the public.
• Deceptive trade practices.
2-17
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