Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 3 3-1 chapter 3 Prepared by Angela Zigras, Seneca College Deborah Baker, Texas

Chapter 3 3-1Copyright © 2002 by Nelson, a division of Thomson Canada Limited.

chap

ter

3

Prepared byPrepared byAngela Zigras, Seneca CollegeAngela Zigras, Seneca College

Deborah Baker, Texas Christian UniversityDeborah Baker, Texas Christian University

THE THE

MARKETING MARKETING

ENVIRONMENTENVIRONMENT


You will learn to ...You will learn to ...

1.1. Discuss the external environment of Discuss the external environment of marketing, and explain how it affects a firm.marketing, and explain how it affects a firm.

2. Describe the social factors that affect 2. Describe the social factors that affect marketing.marketing.

3. Explain the importance to marketing 3. Explain the importance to marketing managers of current demographic trends.managers of current demographic trends.

4. Explain the importance to marketing 4. Explain the importance to marketing managers of multiculturalism and growing managers of multiculturalism and growing ethnic markets.ethnic markets.


You will learn to ...You will learn to ...

5. Identify consumer and marketer reactions 5. Identify consumer and marketer reactions to the state of the economy.to the state of the economy.

6. Identify the impact of technology on a firm.6. Identify the impact of technology on a firm.

7. Discuss the political and legal 7. Discuss the political and legal environment of marketing.environment of marketing.

8. Explain the basics of foreign and 8. Explain the basics of foreign and domestic competition.domestic competition.

9. 9. Discuss corporate social responsibility.Discuss corporate social responsibility.


Target MarketTarget Market

A defined group most likely

to buy a firm’s product.


Understanding the External Understanding the External EnvironmentEnvironment

“Environmental Scanning”

By collecting and

evaluating environmental

information marketers can

identify future marketing

opportunities and threats


External Marketing EnvironmentExternal Marketing Environment

DemographicsDemographics

SocialChangeSocial

Change

EconomicConditionsEconomicConditions

Political & Legal FactorsPolitical &

Legal Factors

TechnologyTechnology

CompetitionCompetition

EnvironmentalScanning

Target Market

ProductDistributionPromotion

Price

ProductDistributionPromotion

Price

External Environment is not controllable Ever-Changing

Marketplace


SocialSocial

DemographicDemographic

EconomicEconomic

TechnologicTechnologic

Political and LegalPolitical and Legal

CompetitiveCompetitive

External Environmental

Factors

External Environmental

Factors

External Marketing EnvironmentExternal Marketing Environment


Environmental ManagementEnvironmental Management

When a company

implements strategies that

attempt to shape the

external environment with

which it operates


Social FactorsSocial Factors

ValuesValues

AttitudesAttitudes

LifestyleLifestyle

Social FactorsSocial Factors


Marketing Oriented ValuesMarketing Oriented Values

ModernismModernism

Cultural CreativityCultural Creativity

TraditionalismTraditionalism

Today’s Today’s Marketing-Marketing-Oriented Oriented

ValuesValues


Marketing-Oriented ValuesMarketing-Oriented Values

CulturalCreativityCultural

Creativity

TraditionalismTraditionalism

ModernismModernism

Interested in new products and services

“Heartlanders” with nostalgic views

Place high value on success, materialism, technology


Is work consuming a huge portion Is work consuming a huge portion of your time?of your time?

The Poverty of Time

A lack of time to do

anything but work,

commute to work, handle

family situations, do

housework, shop, eat,

sleep...


Component LifestylesComponent Lifestyles

The practice of choosing

goods and services that

meet one’s diverse needs

and interests rather than

conforming to a single,

traditional lifestyle.


Role of Families & WomenRole of Families & Women

Over 50% of all females are in the workforce

Rising purchasing power from dual-income families

Change of “traditional” purchasing roles


Demographic FactorsDemographic Factors

AgeAge

LocationLocation

EthnicityEthnicity

DemographicsDemographics


Generation Y: Born to ShopGeneration Y: Born to Shop

Born between 1981 and 1994

Size creates immense marketing impact

Influenced by changing demographics and technology

Respond to ads differently


Generation X: Savvy and CynicalGeneration X: Savvy and Cynical


First generation of latchkey children

Indulge themselves with meals/alcohol, clothing, and electronics


Baby Boomers: A Mass MarketBaby Boomers: A Mass Market


Cherish youth, convenience, and individuality

Individualism has led to a personalized economy


Personalized EconomyPersonalized Economy

Delivering goods and

services at a good value

on demand.


Product Characteristics in a Product Characteristics in a Personalized EconomyPersonalized Economy

CustomizationCustomization

ImmediacyImmediacy

ValueValue

Products are custom designed and marketed to small target markets

Products are delivered at the consumer’s convenience

Businesses must price competitively or create innovative products


Older Consumers: Older Consumers: Not Just GrandparentsNot Just Grandparents

Age “50 plus”

Healthier, wealthier, better educated

Considerable purchasing power

Market potential not fully tapped


Canadians on the MoveCanadians on the Move

Over 16% of Canadians

move each year

Canadians experience both

immigration and migration


Growing Ethnic MarketsGrowing Ethnic Markets

Canadian population is becoming a multicultural society and workforce

Over two-thirds of immigrants to Canada are “visible minorities”


MulticulturalismMulticulturalism

When all major ethnic

groups in an area--

such as a city, county, or

census tract--are roughly

represented.


Multicultural MarketingMulticultural Marketing

StitchingNiches

StitchingNiches

MarketingStrategy

forMulticultural

Markets

MarketingStrategy

forMulticultural

Markets

EthnicEthnic

AgeAge

IncomeIncome

LifestyleLifestyle


Stitching NichesStitching Niches

A strategy for

multicultural marketing

that combines ethnic,

age, income, and lifestyle

markets, on some

common basis, to form

a large market.


Economic FactorsEconomic Factors

Distribution of Consumer

Income

Distribution of Consumer

Income

InflationInflation

RecessionRecession

Economic Areas of Concern to

Marketers


InflationInflation

Prices rise with no wage increasePurchasing Power decreases

Increase profit margins by increasing efficiency

Consumers reaction:– Search for lowest prices– Rely on coupons and sales


RecessionRecession

Income, production and employment fall

Reduced demand for goods and services


Recession Marketing StrategiesRecession Marketing Strategies

Improve existing productsImprove existing products

Introduce new productsIntroduce new products

Maintain customer servicesMaintain customer services

Emphasize top-of-the line productsEmphasize top-of-the line products


Basic ResearchBasic Research

Pure research that aims to

confirm an existing theory

or to learn more about a

concept phenomenon.


Applied ResearchApplied Research

An attempt to develop new

or improved products.


Technological & Resource FactorsTechnological & Resource Factors

New technology helps firm cope with other environmental factors

Internet has created new challenges

Internet has helped marketers operate more efficiently through better communications


Political and Legal FactorsPolitical and Legal Factors

Consumers

Businesses Society

Government

Laws and Regulations Laws and Regulations ProtectProtect


Legal and Regulatory AgenciesLegal and Regulatory Agencies

Competition Bureau (Bill C-2) 1986

Quebec’s Bill 101 (provincial)

The Canadian Code of Advertising Standards

The Canadian Broadcasting Association

The Canadian Direct Marketing Association


Competitive FactorsCompetitive Factors

How many competitors?

How big are competitors?

How interdependent is industry?

ControlControl


Global CompetitionGlobal Competition

More foreign firms are entering market

Foreign firms now compete on product quality

Global markets are highly competitive

NAFTA - Free trade agreement with U.S and Mexico


Corporate Social ResponsibilityCorporate Social Responsibility

EthicalEthicalDo what is right.Do what is right.

LegalLegalObey the Law.Obey the Law.

EconomicEconomicBe profitable.Be profitable.

PhilanthropicPhilanthropicBe a good citizen.Be a good citizen.

Documents

Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 3 3-1 chapter 3 Prepared by Angela Zigras, Seneca College Deborah Baker, Texas