Transcript No Slide Title

The Marketing Environment and
Marketing Strategy
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Environmental
scanning
Environmental forces
Social
Economic
Technological
Competitive
Regulatory

– Purposes
– Objectives and
challenges
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
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Strategic Planning
Business-Unit
Strategies--core
competencies
Issues in creating a
strategy
Choosing your battles
carefully
THE MARKETING ENVIRONMENT
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The Marketing Environment
The importance of
the environment
 Some forces and
their implications

– e.g., truth in
lending laws;
antitrust laws,
economic cycles;
changing
demographics
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Environmental Scanning and
Analysis
SCANNING
ANALYSIS
ACTION
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Elements of The Environment
Social
 Economic
 Technological
 Competitive
 Regulatory
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THE MARKETING ENVIRONMENT
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Social Forces
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Demographics—
more
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–
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Older citizens
Unmarried singles
Immigrants
Ethnic diversity
Family changes
– “Blended” families
– Non-traditional
households
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Cultural changes
– Roles of women
– Values
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E.g., fitness
Longer work hours for
some; yet also more
people working part
time
Changing cultural
standards (e.g., were
Beatle members’
haircuts that
offensive?)
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Economic Forces
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Consumer Income
– Nominal vs.
inflation adjusted
– Impact of inflation
– Disposable vs. pretax income
– Discretionary
income
– Regional influences
– Economic cycles
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“Teach a parrot to say ‘supply”
and ‘demand” and you have a
learned economist!” Paul
Samuelson.
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Economic Cycles
State of Cycle Good Aspects Bad Aspects
Prosperity
“Soft
Landing”
Recession
Depression
Recovery
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Affluence; high
employment
Dangers of inflation
reduced
Danger of inflation;
high interest rates
Layoffs
Lower interest rates;
low levels of
inflation
May be able to get
bargains
Low growth (vicious
cycle); job loss
Economic growth;
job growth
Rising interest rates;
inflation
Vicious cycle; severe
job loss
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Technological Forces
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Changes in technology may
make business obsolete;
e.g.,
– buggy whips (automobile)
– airport at Gander,
Newfoundland (longer range
aircraft)
– Federal Express (fax machine;
Internet)
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New opportunities—e.g.,
specialty online retailers,
mass customization
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Competition
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Levels
– Discretionary income
– Product competition
– Brand competition
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Market structures
– Monopoly (e.g., electric power)
– Oligopoly (e.g., cars, OPEC)
– Monopolistic competition (e.g.,
supermarkets)
– Pure competition (commodities;
e.g.,
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Competition
– benefits the consumer
– is increasingly global
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Issues in Competition
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Barriers to entry
– Financial
– Technological
– Intellectual
property
– Brand recognition
– Running businesses
– Distribution
channels
– Other asset (e.g.,
landing rights)
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Power of
– Buyers
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Substitutes available
– Direct
– Indirect
– Suppliers
Existing
competitors and
substitutes
 Potential
competition—DO
NOT
underestimate!
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Political Forces
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Lobbying by
– business groups
(e.g., honey lobby)
– consumer/politic
al groups (e.g.,
labor unions; senior
lobby)
– foreign interests
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Legal and Regulatory
Environment
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Laws and Regulations
– for safety
– for consumer protection
– to protect special interests
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Dangers of litigation--anyone
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Examples:
can sue, and juries often buy it!
– Antitrust
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Fair competition
Pricing
– “Truth in Lending”--have to tell
people real costs of financing; car
leases now regulated
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Antitrust Law
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Provisions
– Must compete fairly; no
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collusion
predation
No, now that
you mention
it, I don’t
trust you!
– Must not abuse market power; no
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“excessive” market share
“tying”--requiring people to buy a less
desired item to get a desired one; e.g.,
– must buy service to get Xerox copier
– Ford only drilled a slot if you bought a
radio
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Strategy
 Plan
– to achieve desired objectives (e.g.,
profit, market share)
– based on available resources (e.g.,
financial, patents, trademarks, people,
brand name/image , distribution
channels)
– subject to choices made (e.g.,
willingness to take risk, short run vs.
long run goals)
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Strategy, Marketing, and the
Organization
DESIRED
OUTCOMES
RESEARCH,
ANALYSIS
AND PLANNING
IMPLEMENTATION
STRATEGY
RESULTS
EVALUATION
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Dimensions of Strategy
 Ultimate
organizational objective
– Profit
– Non-profit
 Level
– Corporate
– Business Unit
– Functional
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Some Issues in Strategy
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The Business
– What is it?
– Should not define too
narrowly or too broadly
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The Mission
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Scope
Customers
Markets
Technology
Values
Values and culture
 Goals and
objectives
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Profit
Revenue
Market share
Unit sales
Employee welfare
Social responsibility
Technological leadership
Other
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Considerations in Strategies
Customers
 Competencies
 Competitors
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Selecting Target Consumers
Demand
measurement/fore
casting
 Market
segmentation
 Target marketing
 Market positioning
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The Boston Consulting Group
(BCG) Matrix
© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
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Strengths, Weaknesses, Opportunities,
and Threats (SWOT) Analysis
STRENGTHS
WEAKNESSES
STRATEGY
OPPORTUNITIES
THREATS
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SWOT--Microsoft
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Strengths
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Technology
Market share
Barriers to entry
Brand name
Cash
Weaknesses
– Non-Windows
division (e.g., MSN,
games)
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Opportunities
– Hardware
 e.g.,
home networks
– Services
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Threats
– Recession
– Legal
– Regulatory
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Microsoft: Implications
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Decision on
whether to stay in
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– ISP business
– Game business
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If the decision is to
stay:
– Should more
resources be
invested?
– Possible focus or
differentiation?
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Dealing with
decline in demand
due to recession
– Price cuts?
– “Hold out?”
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Political relations to
limit future legal
problems
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SMAC Criteria for Strategic
Plans
Specific
 Measurable
 Achievable
 Consistent
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