Transcript Essentials of Marketing, 8th Edition

Chapter 4:
Evaluating
Opportunities in the
Changing Marketing
Environment
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 2000
Irwin/McGraw-Hill
Chapter 4 Objectives
When you finish this chapter, you should
1. Know the variables that shape the
environment of marketing
strategy planning.
2. Understand why company
objectives are important in
guiding marketing strategy
planning.
3. See how the resources of a firm
affect the search for
opportunities.
4. Know how the different kinds of
competitive situations affect
strategy planning.
4-2
5. Understand how the economic
and technological environment
can affect strategy planning.
6. Know why you might be sent to
prison if you ignore the political
and legal environment.
7. Know about the cultural and
social environment and key
population and income trends
that affect it.
8. Understand how to screen and
evaluate marketing strategy
opportunities.
9. Understand the important new
terms.
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 2000
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The Importance of Objectives
Provide
Guidelines
Setting
Company
Objectives
Be
Explicit
Coordinate
Effort
Lead to Marketing
Objectives
4-3
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© The McGraw-Hill Companies, Inc., 2000
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A Hierarchy of Objectives
Company
Objectives
Production
Objectives
Finance
Objectives
Product
Objectives
Marketing
Objectives
Place
Objectives
Personal
Selling
Objectives
HR
Objectives
Promotion
Objectives
Mass Selling
Objectives
R&D
Objectives
Price
Objectives
Sales
Promotion
Objectives
Exhibit 4-1
4-4
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© The McGraw-Hill Companies, Inc., 2000
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Limits on Opportunity Search
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4-5
Financial Strength
Producing Capability
and Flexibility
Marketing Strengths
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The Competitive Environment
Kinds of Markets
Competitor Analysis
Key
Concepts
in the
Competitive
Environment
Competitive Rivals
Competitive Barriers
Information on Competitors
4-6
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The Economic and
Technological Environment
Global Economy
Rapid Change
Key
Economic
Forces
Interest Rates
4-7
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The Impact of Technology
Technology is the application of science to
convert and economy’s resources to output
Technology impacts marketing both through
opportunities for new products and new
ways (processes) for handling marketing
functions
 Example: consider the Internet
 Products: software for computer users
 Process: selling from a web site
4-8
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 2000
Irwin/McGraw-Hill
The Political and Legal Environment
Nationalism
Consumerism
Characteristics
of the Political
Environment
Regional
Groupings
4-9
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© The McGraw-Hill Companies, Inc., 2000
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Some Important U.S. Federal
Regulatory Agencies
Agencies
Responsibilities
Federal Trade Commission (FTC)
Enforces laws and develops guidelines
regarding unfair business practices
Food and Drug Administration (FDA)
Enforces laws and develops regulations to
prevent distribution and sale of hazardous
consumer products
Consumer Product Safety Commission
(CPSC)
Enforces Consumer Product Safety Act
Federal Communications Commission
(FCC)
Regulates interstate wire, radio, and
television
Environmental Protection Agency (EPA)
Develops and enforces environmental
protection standards
Office of Consumer Affairs (OCA)
Handles consumer complaints
4-10
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© The McGraw-Hill Companies, Inc., 2000
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The Cultural and Social Environment
Example of a Cultural Trend:
The Changing Roles of Women
Time
Poverty
Economic
Power
Career
Opportunity
4-11
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Identifying Potential Markets
Money
Growth
Concentration
Literacy
4-12
Focus:
Relative Buying Power
Focus:
Rate of Growth
Focus:
Population Density
Focus :
Communication Concerns
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© The McGraw-Hill Companies, Inc., 2000
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US Population Trends
Regional Differences
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4-13
Birthrate
Aging Population
Changing Household
Composition
Shifts to Suburban
Areas
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Changes in U.S. Birthrate, 1935-2005
25.0
Birthrate
26
19.4
19
18.7
16.6
13
1935
4-14
After a peak between 1950
and 1955, U.S. Birthrates
declined steadily until
1975. Following a brief
rise in rates finishing
about 1990, rates have
again begun to fall.
14.6
1970
14.0
2005
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© The McGraw-Hill Companies, Inc., 2000
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Sales and Cost Curves of
Two Strategies
Product A
Dollars
Sales
0
Total cost
1
2
3
4
In this graphic, a
too-narrow focus on the
first year’s results might
cause the marketing
manager to abandon this
product as too costly.
5
Years
Exhibit 4-8
4-15
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© The McGraw-Hill Companies, Inc., 2000
Irwin/McGraw-Hill
Sales and Cost Curves of
Two Strategies
Product B
In this graphic, a
too-narrow focus on
the first year’s results
might cause the
marketing manager
to adopt the product
prematurely, since its
performance in year
one is misleading.
Sales
Total cost
0
1
2
3
4
5
Years
Exhibit 4-8
4-16
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 2000
Irwin/McGraw-Hill
Sales and Cost Curves of
Two Strategies
Product A
Product B
Sales
Sales
Dollars
Total cost
0
Total cost
1
2
3
Years
4
5
0
1
2
3
4
5
Years
Seen together, it is easy to see that Product A offers a
vastly better overall return than does Product B
Exhibit 4-8
4-17
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© The McGraw-Hill Companies, Inc., 2000
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Evaluating Opportunities
Industry Attractiveness
Low
Medium
High
Medium
No Growth
Low
Business Strength
High
Borderline
Growth
Exhibit 4-9
4-18
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© The McGraw-Hill Companies, Inc., 2000
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Continuum of Environmental Sensitivity
Insensitive
Industrial
products
Sensitive
Basic
commodity-type
consumer
products
Consumer
products that
are linked to
cultural
variables
Exhibit 4-10
4-19
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 2000
Irwin/McGraw-Hill
Key Terms
Mission Statement
Competitive Environment
Competitor Analysis
Competitive Rivals
Competitive Barriers
Economic and Technological
Environment
Technology
4-20
Nationalism
NAFTA
Consumerism
Cultural and Social Environment
Gross National Product (GNP)
Metropolitan Statistical Area
Senior Citizen
Strategic Business Unit (SBU)
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© The McGraw-Hill Companies, Inc., 2000
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