Transcript 05 M`ing Enviro nment

The Marketing
Environment
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Key Terms
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Demography
Echo boomers (baby boomlet generation)
Economic environment
Environmental management perspective
Financial intermediaries
Generation X
Macroenvironment
Marketing environment
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Key Terms
• Marketing intermediaries
• Marketing services agencies
• Microenvironment
• Political environment
• Suppliers
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“It is useless to tell a river to stop running; the best
thing is to learn how to swim in the direction it is
flowing.”
-Anonymous
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Chapter Objectives
• List and discuss the importance of the
elements of the company’s microenvironment
• Describe the macro-environmental forces
that affect the company’s ability to serve its
customers
• Explain how changes in demographic and
economic environments affect marketing
and describe the levels of competition
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Chapter Objectives
• Identify the major trends in the firm’s
natural and technological environments
• Explain the key changes that occur in the
political and cultural environments
• Discuss how companies can be proactive
rather than reactive when responding to
environmental trends
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The Company’s Microenvironment
• The Company
• Suppliers
• Marketing Intermediaries
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The Company’s Microenvironment
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The Company
• Marketing managers must work with all
departments of a company
• All Departments have an impact on the
marketing department’s plans and actions
• “Think Consumer”
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Suppliers
• Suppliers are firms and individuals that
provide the resources needed by the
company to produce its goods and services
• Suppliers can seriously affect marketing
plans
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Marketing Intermediaries
• Marketing intermediaries help the
company promote, sell, and distribute its
goods to the final buyers
• Marketing service agencies help formulate
and implement marketing strategies
• Financial intermediaries help hospitality
companies finance their transactions
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The Company’s Macro-environment
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Competitors
• To be successful, a company must satisfy
needs and wants of consumers better than
competitors
• A company should monitor three variables
when analyzing each of its competitors
– Share of Market
– Share of Mind
– Share of Heart
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Competition
•
Is the “enemy” or anyone who
competes for the same market
customers?
Understand the competition as well as
the capabilities of your competitors
Macro-competition
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Any business that competes for the same
customers in the same product class at
the same point in time
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Competitive Intelligence
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Information on what the competition is
doing, its position and intentions as well as
its strengths and weaknesses
Public information
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Media
Trade press
Trade associations
Company brochures
Flyers and advertisements
Annual reports
Talk directly to the competition or customers
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Competitive Intelligence
Actual market share
–
The amount of
business a firm
actually receives in
relative proportion to
its direct competitors
in the same product
class
Fair market share
– The amount of
business a firm
expects to receive in
relative proportion to
its direct competitors
in the same product
class
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Market Share
Hotel
Actual
Rooms
Rooms Sold
A
300
220
B
500
350
C
1200
500
YOUR
HOTEL
600
350
TOTAL
2600
1420
Occupancy %
Fair Share %
Actual Share
%
Rooms
sold/actual
rooms
Your
capacity/
Total capacity
Your
occupancy/
Total market
occupancy
73.3%
(220/300)
24.7%
(350/1420)
23.1%
(600/2600)
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Using Competitive Intelligence
Sustainable competitive advantage happens
when:
– Customers perceive a consistent difference in
important attributes between one firm or
property and its competition
– The difference is the result of a capability gap
between the firm and its competitors
– Both the difference in important attributes and
the capability gap can endure/bear over time
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Choosing the Right Competition
• Success lies in thorough analysis of
the current situation
• Determine which other firms in the
same product class are pursuing the
same customers at the same point
in time
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Demographic Environment
• Demography is the study of human
populations in terms of size, density,
location, age, gender, race,
occupation, and other statistics
• Demographics change over time and
companies must keep up with them
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Demographic Environment
Baby boomers – 77 Million post-World War
II babies born between 1946-1964
Generation X – 45 million born between
1965-1976, the “birth dearth”
Generation Y (echo boomers) – 72 million
born between 1977-1994
Generation Z (techno boomers) – born after
-1996
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Economic Environment
• The economic environment consists of
factors that affect consumer
purchasing power and spending
patterns
• It is not enough to have people, the
people must have buying power
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Economic Environment
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Includes economics that effect hospitality
including:
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recession
Inflation
employment levels
personal discretionary income
foreign exchange rates
Foreign development and investment as
economies grow stronger
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The Global Economy
Global economic dealings, such as
currency exchange rates, have a large
impact on travel and tourism across
the world
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Natural Environment
• The natural environment consists of
natural resources required by marketers
or affected by marketing activities
• Anyone involved in tourism is responsible
for protecting the environment and
ensuring sustainability
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Ecological/natural environment
–
Includes issues related to our natural
environment
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Ecotourism
Disposal
Recycling
Pollution
– Ecological gains in the hotel industry
have largely taken place
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Technological Environment
• The hospitality industry is greatly affected
by changes in technology
– The Internet, computerized systems, key cards,
etc.
• Faces opposition by those who believe it
threatens privacy, simplicity, and even the
human race
• The most dramatic force affecting tourism
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Technological Environment
– Consideration of technology impact
from both a consumer and business
perspective
– Potentially a source of competitive
advantage
– Instrumental in hospitality and tourism
– Have potential to increase customer
satisfaction
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Political Environment
The political environment is made
up of laws, government agencies,
and pressure groups that influence
and limit the activities of various
organizations and individuals in
society
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Political Environment
– Has an impact on hospitality both in the
current government and in destinations
interested in developing tourism
– Government changes can affect
business opportunities and influence
global expansion
– Government interested in tax earnings
and employment potentials
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Political Trends
• Increased legislation and regulation
affecting business
• Changing government Agency Enforcement
• Increased emphasis on socially responsible
actions and ethics
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Cultural Environment
• The cultural environment includes
institutions and other forces that
affect society’s basic values,
perceptions, preferences, and
behaviors
– Persistence of cultural values
– Subcultures
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Regulatory environment
–
Government regulations or ordinances that
affect consumers and businesses
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Local
State
Federal
Can have great impact on costs and profits
Some countries have different and
sometimes undeveloped regulatory and
legal environments, or those that are not
recognized or followed
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Linked Environmental Factors
• Environmental factors can also work together
to bring about change
– Americans now eat more meals prepared
outside than inside the home
– Low-carb diets
– Grocery stores competing with restaurants
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Responding to the Marketing Environment
• Many companies feel the marketing
environment is uncontrollable
• An environmental management perspective
takes action to sway the marketing
environment
• Take a proactive rather than a reactive
approach
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Environmental Scanning
1. Determine environmental areas that
require monitoring
2. Determine how the information will
be collected
3. Implement data collection plan
4. Analyze data and use in market
planning process
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Environmental Scanning
5. Examining the external environment
to determine potential opportunities
and threats that could affect a
business
6. Requires an awareness of what is
going on in order to be proactive
rather than reactive
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Technological
Environment
Ecological
Environment
Bargaining
Power of
Suppliers
Threat of
Substitute
Products
Rivalry Among
Established Firms
Economic
Environment
Sociocultural
Environment
Risk of Entry by
Potential Competitors
Bargaining Power
Of Buyers
Five Forces Model
Regulatory
Environment
Political
Environment
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Using Marketing Information
• Simple data collection is not
sufficient
• Information must be:
– Reliable
– Timely
– Used in decision making
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Discussion Questions
A. What environmental trends will affect the
succes of a first class hotel chain, such as
Hyatt or Hilton, over the next 10 years? If you
were corporate director of marketing for this
type of hotel, what plans would you make to
deal with these trends?
B. Explain how environmental trends have
effected the food and the beverage offerings
a business class hotel such as Sheraton etc.
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End of chapter
slides
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