Transcript Chapter 3: The Global Marketing Environment

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Chapter 3
Scanning Marketing Environment
DR RUSHDY WADY
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The objectives
Of this Chapter is to
• Describe the environmental forces that affect the
company’s ability to serve its customers.
• Explain how changes in the demographic and
economic environments affect marketing
decisions.
• Identify the major trends in the firm’s natural and
technological environments.
• Explain the key changes in the political and
cultural environments.
• Discuss how companies can react to the
marketing environment.
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THE MARKETING ENVIRONMENT
• INTRODUCTION
INTRODUCTION
• INTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT
• EXTERNAL
ENVIRONMENT
EXTERNAL
ENVIRONMENT
SWOT ANALYSIS
• SWOT ANALYSIS
THE MARKETING ENVIRONMENT
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Marketing Environment
• Marketing:
• We have discussed before the meaning of
Marketing and we said that marketing is .
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Marketing Environment
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• Marketing Environment- consists of the
actors and forces outside marketing that
affect marketing management’s ability to
develop and maintain successful
relationships with its target customers.
• Includes:
–Microenvironment - forces close to the company
that affect its ability to serve its customers.
–Macroenvironment - larger societal forces that
affect the whole microenvironment.
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The Marketing Environment
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Demographic
Company
Economic
Cultural
Publics
Suppliers
Company
Customers
Competitors
Natural
Political
Intermediaries
Technological
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The Microenvironment
Company
Publics
Forces Affecting a
Company’s Ability to
Serve Its
Customers
Suppliers
Intermediaries
Competitors
Customers
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The Company’s
Microenvironment
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• Company’s Internal Environment- functional
areas such as top management, finance, and
manufacturing, etc.
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• Suppliers - provide the resources needed to
produce goods and services and are an
important link in the “value delivery
system”.
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1. Suppliers
Marketers must watch supply availability –
and pricing
Effective partnership relationship –
management with suppliers is essential
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1. Marketing intermediaries
Help to promote, sell and distribute goods to –
final buyers
Include resellers, physical distribution firms, –
marketing services agencies and financial
intermediaries
Effective partner relationship management is –
essential
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Marketing services agencies are the »
marketing research firms, advertising
agencies, media firms, and marketing
consulting firms that help the company
target and promote its products to the
right markets.
Financial intermediaries help finance »
transactions or insure against the risks
associated with the buying and selling
of goods.
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– Marketing intermediaries form an important
component of the company’s overall value
delivery system.
-Today’s marketers recognize the importance
of working with their intermediaries as
partners rather than simply as channels
through which they sell their products.
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The Company’s
Microenvironment
• Customers - five types of markets that
purchase a company’s goods and
services.
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Types of Customer Markets
International
Markets
Consumer
Markets
Company
Government
Markets
Business
Markets
Reseller
Markets
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•
Customers
•
- Consumer markets consist of individuals and households that
buy goods and services for personal consumption
•
- Business markets buy goods and services for further
processing or for use in their production process.
» Reseller markets buy goods and services to resell at a
profit.
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» - Government markets are made up of government
agencies that buy goods and services to produce public
services or transfer the goods and services to others who
need them.
- International markets consist of buyers in other countries,
including consumers, producers, resellers, and governments.
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• Competitors - those who serve a target
market with similar products and services
against whom a company must gain
strategic advantage.
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- Marketers
must
gain
strategic
advantage by positioning their offers
strongly against competitors’ offerings
in the minds of consumers.
- No single competitive marketing strategy
is best for all companies. Each firm
should consider its own size and industry
position compared to those of its
competitors.
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• Publics - A public is any group that has an
actual or potential interest in or impact on
an organization’s ability to achieve its
objectives.
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Types of Publics
Financial i.e. Banks
Media i.e. Newspapers
Government i.e. Regulations
Citizen-Action i.e. Consumer Groups
Local i.e. Neighborhood Residents
General Public
Internal i.e. Employees
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» Financial publics influence the
company’s ability to obtain funds.
» Media publics carry news, features,
and editorial opinion.
» Government publics regulate public
safety, truth in advertising, and other
matters.
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» Citizen-action publics include
consumer organizations, environmental groups, minority groups, and
others.
» Local publics include neighborhood
residents and community
organizations.
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» The general public may be concerned
about the company’s products and
activities.
» Internal publics include workers,
managers, volunteers, and the board
of directors.
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The Macroenvironment
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Demographic
Cultural
Forces that Shape
Opportunities
and Pose Threats
to a Company
Political
Economic
Natural
Technological
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The Company’s
Macroenvironment
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• Demographic - studies populations in terms
of age, gender, race, occupation, location
and other statistics.
• Economic - factors that affect consumer
purchasing power and spending patterns.
• Natural - natural resources needed as inputs
by marketers or that are affected by
marketing activities.
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The Company’s
Macroenvironment
• Technological - forces that create new
technologies, creating new product and
market opportunities.
• Political - laws, agencies and groups that
influence and limit organizations and
individuals in a given society.
• Cultural - institutions and other forces that
affect a society’s basic values, perceptions,
preferences, and behaviors.
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Key U.S. Demographic Trends
Changing Age Structure
Population is getting older
Changing Family Structure
Marrying later, fewer children,
working women, and nonfamily households
Geographic Shifts
Moving to the Sunbelt and suburbs (MSA’s)
Increased Education
Increased college attendance
and white-collar workers
Growing Ethnic and Racial Diversity
Caucasian, 13% African-American, %72
Hispanic & 3% Asian%11
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•
Demography is the study of human populations in terms
of size, density, location, age, gender, race, occupation,
and other statistics. It involves people, and people make
up markets.
•
Changes in the world demographic environment have
major implications for business.
•
The single most important demographic trend in the
United States is the changing age structure of the
population.
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•
•
•
The “traditional household” consists of a
husband, wife, and children (and sometimes
grandparents).
In the United States today, married couples with
children now make up only about 34 percent of
the nation’s 105 million households, and this
percentage is falling.
The number of working women has increased
greatly, growing from under 30 percent of the
U.S. workforce in 1950 to just over 60 percent
today.
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•
This is a period of great migratory movements
between and within countries.
•
Over the past two decades, the U.S. population
has shifted toward the Sunbelt states. The West
and South have grown, while the Midwest and
Northeast states have lost population.
•
For more than a century, Americans have been
moving from rural to metropolitan areas.
•
The shift in where people live has also caused a
shift in where they work. One in five Americans is
now working out of the home with the help of
electronic conveniences.
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•
The U.S. population is becoming better educated
•
In 2002, 84 percent of the U.S. population over
age 25 had completed high school and 27
percent had completed college, compared with
69 percent and 17 percent in 1980.
•
The workforce is also becoming more white
collar. Between 1950 and 1985, the proportion of
white-collar workers rose from 42 percent to 54
percent, that of blue-collar workers declined from
47 percent to 33 percent, and that of service
workers increased from 12 percent to 14 percent.
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• The United States is called a melting pot—
diverse groups from many nations and cultures
have melted into a single, more homogenous
whole. Instead, though, the United States seems
to have become more of a “salad bowl” in which
various groups have mixed together but
maintained their diversity by retaining and
valuing important ethnic and cultural differences.
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•
Marketers are facing increasingly diverse markets, both
at home and abroad.
•
Most large companies now target specially designed
products and promotions to one or more ethnic groups.
•
Diversity goes beyond ethnic heritage. For example,
many major companies have recently begun to explicitly
target gay and lesbian customers.
•
Another attractive segment is the more than 54 million
people with disabilities in the United States; they
represent almost $1 trillion in annual spending power.
•
Marketers should pay attention to income distribution as
well as average income.
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Economic Environment
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Changes
in Income
Economic
Development
Inflation
and
Recession
Key
Economic
Concerns for
Marketers
Changing
Consumer
Spending
Patterns
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Inflation
•
Prices rise with no wage increase
Purchasing Power decreases
•
Increase profit margins by increasing
efficiency
•
Consumers reaction:
– Search for lowest prices
– Rely on coupons and sales
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Recession
•
Income, production and employment fall
•
Reduced demand for goods and services
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Recession Marketing Strategies
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 Improve existing products
 Maintain customer services
 Introduce new products
 Emphasize top-of -the line products
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•
- The economic environment consists of factors that
affect consumer purchasing power and spending
patterns
– Nations vary greatly in their levels of distribution of
income.
•
- Subsistence economies are ones in which the
population consumes most of their own agricultural and
industrial output
•
Industrial economies are those with rich markets for
many different kinds of goods.
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•
- Value marketing has become the watchword for many
marketers. They are looking for ways to offer today’s
more financially cautious buyers greater value.
•
Marketers should pay attention to income distribution as
well as average income.
•
In the United States, the top is populated by upper-class
consumers, whose spending patterns are not affected by
current economic events.
•
The middle class is somewhat careful about its spending,
but can still afford the good life some of the time.
•
The working class must stick close to the basics of food,
clothing, and shelter.
•
The underclass must count their pennies when making
even the most basic purchases.
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• Table 3.1 shows the proportion of
total expenditures made by U.S.
households at different income
levels for major categories of
goods and services.
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•
Consumers at different income levels have
different spending patterns.
•
Some of these differences were noted over a
century ago by Ernst Engel, who studied how
people shifted their spending as their income
rose. Engel’s laws generally have been
supported by later studies.
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Natural Environment
Shortages of
Raw Materials
Increased
Pollution
Governmental
Intervention
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Factors Affecting
the
Natural
Environment
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•
- The natural environment involves the natural
resources that are needed as inputs by
marketers or that are affected by marketing
activities.
•
Environmental concerns have grown steadily
during the past three decades.
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– Marketers should be aware of several trends in the
natural environment.
- The first involves growing shortages of raw
materials. Air and water may seem to be infinite
resources, but some groups see long-run
dangers.
* A second environmental trend is increased
pollution. Industry will almost always damage
the quality of the natural environment.
* A third trend is increased government
intervention in natural resource management.
The governments of different countries vary in
their concern and efforts to promote a clean
environment.
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• Concern for the natural environment has
spawned the so-called green movement.
Enlightened companies are developing
environmentally sustainable strategies and
practices in an effort to create a world economy
that the planet can support indefinitely.
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Technological Environment
Rapid Pace of
Change
Unlimited
Opportunities
Issues in the Technological
Environment
Increased
Regulation
Practical, Affordable
Products
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Technological & Resource Factors
•
New technology helps firm cope
with other environmental factors
•
New technology helps firm carrying out
and easy apply of research
•
Information technology helps economic
growth
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• Technological Environment
–The technological environment is perhaps the
most dramatic force now shaping our destiny.
–New technologies create new markets and
opportunities. However, every new technology
replaces on older technology.
– Marketers should watch the technological
environment closely.
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Political Environment
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Some Trends in the Political Environment
Include:
Increasing
Legislation Designed
to Protect Groups
Changing Government
Agency
Enforcement
Increasing Emphasis
on Ethics and
Socially Responsible
Actions
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• Political Environment
– The political environment consists of laws, government
agencies, and pressure groups that influence or limit
various organizations and individuals in a given society.
– Well-conceived legislation can encourage competition
and ensure fair markets for goods and services.
– Governments develop public policy to guide
commerce.
– Legislation affecting business around the world has
increased steadily over the years.
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• Understanding the public policy
implications of a particular marketing
activity is not a simple matter. Marketers
must work hard to keep up with changes in
regulations and their interpretations
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– Business legislation has been enacted for a
number of reasons.
» The first is to protect companies from each
other.
» The second purpose of government
regulation is to protect consumers from
unfair business practices.
» The third is to protect the interests of
society against unrestrained business
behavior.
» International marketers will encounter
dozens, or even hundreds, of agencies set
up to enforce trade policies and regulations.
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– Business is also government by
social codes and rules of
professional ethics.
– Enlightened companies encourage their
managers to look beyond what the regulatory
system allows and simply “do the right thing.”
These socially responsible firms actively seek
out ways to protect the long-run interests of
their consumers and the environment.
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»The recent rash of business scandals and
increased concerns about the environment
have created fresh interest in the issues of
ethics and social responsibility.
»The boom in e-commerce and Internet
marketing has created a new set of social
and ethical issues. Online privacy issues are
the primary concern.
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– To exercise their social responsibility and build
more positive images, companies are now
linking themselves to worthwhile causes.
» Cause-related marketing has become a
primary form of corporate giving.
» Cause-related marketing has stirred some
controversy. Critics worry that cause-related
marketing is more a strategy for selling than
a strategy for giving.
» If handled well, cause-related marketing can
greatly benefit both the company and the
cause.
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Cultural Environment
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Of
Oneself
Of
the Universe Cultural Values
Of
Nature
of a
Society
Of
Society
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Of
Others
Of
Organizations
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– The cultural environment is made up of
institutions and other forces that affect a
society’s basic values, perceptions,
preferences, and behaviors. People grow up in
a particular society that shapes their basic
beliefs and values.
» Core beliefs and values are passed on from
parents to children and are reinforced by
schools, churches, business, and
government.
» Secondary beliefs and values are more open
to change.
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• Although core values are fairly persistent,
cultural swings do take place. Marketers
want to predict cultural shifts in order to
spot new opportunities or threats.
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– The major cultural values of a society are
expressed in people’s views.
» People vary in their emphasis on serving
themselves versus serving others.
» Recently, observers have noted a shift from
a “me society” to a “we society” in which
more people want to be with and serve
others.
» People vary in their attitudes toward
corporations, government agencies, trade
unions, universities, and other
organizations. By and large, people are
willing to work for major organizations and
expect, them, in turn, to carry out society’s
work.
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» People vary in their attitudes toward
their society.
» People vary in their attitudes toward
the natural world.
» People vary in their beliefs about the
origin of the universe and their place in
it.
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Responding to the
Marketing Environment
Environmental Management Perspective •
Taking a proactive approach to –
managing the microenvironment and
the macro environment by taking
aggressive (rather than passive)
actions to affect the publics and
forces in the marketing
environment.
How? Hire lobbyists , run –
“advertorials”, file law suits and
complaints, and form agreements.
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• Many companies view the marketing environment
as an uncontrollable element in which they must
react and adapt. They passively accept the
marketing environment and do not try to change
it.
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– Other companies take a proactive stance
toward the marketing environment.
» Rather than simply watching and reacting,
these firms take aggressive actions to affect
the publics and forces in their marketing
environment.
» Such companies hire lobbyists to influence
legislation affecting their industries and
stage media events to gain favorable press
coverage. They press lawsuits and file
complaints with regulators to keep
competitors in line, and they form
contractual agreements to better control
their distribution channels.
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Rest Stop:
Reviewing
the
Concepts
• Describe the environmental forces that affect the
company’s ability to serve its customers.
• Explain how changes in the demographic and
economic environments affect marketing
decisions.
• Identify the major trends in the firm’s natural and
technological environments.
• Explain the key changes in the political and
cultural environments.
• Discuss how companies can react to the
marketing environment.
Copyright 2000 Prentice Hall ‫س‬