Transcript 4-8

Chapter 4:
Evaluating
Opportunities in the
Changing Marketing
Environment
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
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
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
How Major Objectives should be
Changed
1] In Writing
2] Discuss the Reason for the change in
objectives with people involved
3] Describe the process for getting to the
new objectives
Remember, you do not want to change
objectives too often
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Limits on Opportunity Search
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4-5
Financial Strength
Producing Capability
and Flexibility
Marketing Strengths
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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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 McGraw-Hill Companies, Inc., 1999
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Measuring the Competition For a
Local Market
1] Start with your known competitors
2] Consult the Yellow Pages
3] Ask your customers
4] Keep your eyes open
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Measuring the Competition for a
Regional or National Business
1] Read your trade press carefully
2] Make notes at trade shows
3] Get a list of all members of your National
or Regional Trade Association
4] Look at Wholesalers & Retailers
5] Web & News Sources
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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Measuring Your Competitors
Strategy
Make Sure you measure ALL elements of
the marketing mix
Product
Price
Place
Promotion
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Where Do you Find This
Information?
1] Trade Shows
2] Trade Press
3] Obtaining Price Lists
4] Purchasing & testing Competitor Brands
5] Visit Competitors Stores
6] Check public warehouses
7] Monitor local newspapers
8] Web & Other News Sources
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
What Next?
1] Write down this information - with dates
2] Use measurable criteria
3] Think! What are competitor’s strengths,
weaknesses, market trends?
4] Most important - where are the strategy
gaps? Consider this from the
CUSTOMER’S View.
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
The Economic and
Technological Environment
Global Economy
Rapid Change
Key
Economic
Forces
Interest Rates
4-7
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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The Impact of Technology
Technology is the application of science to
convert an 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., 1999
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The Political and Legal Environment
Nationalism
Consumerism
Characteristics
of the Political
Environment
Regional
Groupings
4-9
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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Key Ideas in the U.S. Legal
System
1] Promote Competition
2] Warn About Dangerous Products
3] Enforce Contracts
4] Protect Children
5] There is variation between states
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Important Laws Affecting Marketing
 Sherman Act (1890)
 prohibits conspiracy to reduce competition
 example: price "fixing" agreements among competing
firms
 Federal Trade Commission Act (1914)
 prohibits unfair methods of competition
 example: use of deceptive advertising
 Robinson-Patman Act (1936)
 prohibits most types of price-related discrimination
 example: offering "advertising allowances" to some
middlemen but not others (without cost justification)
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Federal Antimonopoly Laws & the Four Ps
Law
Product
Place
Sherman Act
Monopoly or
Monopoly or
(1890) Monopoly or
conspiracy to control conspiracy to control
conspiracy in
a product
distribution channels
restraint of trade
Forcing sale of some Exclusive dealing
Clayton Act (1914)
products with
contracts (limiting
Substantially lessens
others—tying
buyers’ sources of
competition
contracts
supply)
Federal Trade
Commission Act
(1914) Unfair
Unfair policies
methods of
competition
Robinson-Patman
Act (1936)
Tends to injure
competition
Prohibits paying
allowances to
“direct” buyers in
lieu of middlemen
costs (brokerage
charges)
Wheeler-Lee
Amendment (1938) Deceptive packaging
Unfair or deceptive
or branding
practices
Antimerger Act
Buying producers or
(1950) Lessens
Buying competitors
distributors
competition
Magnuson-Moss
Act (1975)
Product warranties
Unreasonable
practices
Promotion
Price
Monopoly or
conspiracy to fix or
control prices
Price discrimination
by manufacturers
Deceptive ads or
selling practices
Deceptive pricing
Prohibits “fake”
advertising
allowances or
discrimination in
help offered
Prohibits price
discrimination on
goods of “like grade
and quality” without
cost justification,
and limits quantity
discounts
Deceptive ads or
selling claims
Deceptive pricing
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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The Cultural and Social Environment
Time
Poverty
Economic
Power
Career
Opportunity
4-11
Cultural Trend:
The Changing Roles of Women
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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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 4-6
4-12
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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 4-6
4-13
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
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 4-6
4-14
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Evaluating Opportunities
Industry Attractiveness
Low
Medium
High
Medium
No Growth
Low
Business Strength
High
Borderline
Growth
Exhibit 4-7
4-15
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Continuum of Environmental Sensitivity
Insensitive
Industrial
products
Sensitive
Basic
commodity-type
consumer
products
Consumer
products that
are linked to
cultural
variables
Exhibit 4-8
4-16
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Mission Statement Provides Guidance
 Mission statement helps set the course of a firm by
explicitly stating the organization’s basic purpose
for being
 May make it clear that some opportunities
(target market or marketing mix alternatives)
are not related to the mission
 Some opportunities may be a good fit with
mission, but not as good a fit or as high a
priority as others
 Mission statement works in combination with
specific objectives and should relate to screening
criteria used to evaluate strategy alternatives
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
http://www.benjerry.com/activism/missionstatement/
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill