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To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 1
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 2
THE MAIN PURPOSE OF THIS CHAPTER IS THINKING ABOUT NEW OPPORTUNITIES IN THE DIFFERENT ENVIRONMENTS
• OBJECTIVES AND RESOURCES OF THE FIRM
• COMPETITIVE ENVIRONMENT
• ECONOMIC / TECHNICAL ENVIRONMENT
• POLITICAL / LEGAL ENVIRONMENT
• CULTURALC / SOCIAL ENVIRONMENT
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 3
The Marketing Environment
• The “environment” is constantly changing and it is creating, and, destroying business opportunities
translation - “there are now many people from different countries and different cultures that all live together - these people all have different opinions about stuff”
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 4
Figure 2.1 Components of the Marketing Environment
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 5
The Competitive Environment
• The Interactive process that occurs in the marketplace in which competing organizations seek to satisfy markets.
• When companies develop a marketing plan that includes some new product, and new advertising - the consumer reaction has an effect on other companies trying to sell the same stuff
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 6
The Competitive EnvironmentIn many areas of business, competition is tough
and intense• fast food• entertainment• consumer products ie. Cars, clothing• companies are very sensitive to the marketing
actions of their competitors and try to counteract this with their own innovative marketingeg. Coke vs. Pepsi, Wendy’s vs. Macdonalds
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 7
• inter-product
• product substitute
• alternative gratification
Types of Competition(competition comes from 3 different sources)
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 8
inter-product
• competition among marketers of similar products
•competition can be national, or international
•eg. Different companies elling cross training shoes (Reebok, Nike, Brooks)
Types of Competition
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 9
product substitute
• competition among marketers of products that can be substituted for each other
•Aluminum beer cans vs. steel beer cans
•Paper bags vs. plastic bags
Types of Competition
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 10
product substitute
• Sometimes when a new technological development allows for lower production costs, new products will come into the market and compete with other older previously established products
•eg. Wood 2x4s and steel 1x3s
Types of Competition
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 11
alternative gratification
• All firms are competing for the consumers wallet
•ie. Reeboks or Nike cross trainers (inter-product)
•Reeboks cross trainers vs. Hi-tec sandals (product substitute)
•Shoes vs. hats (alternative gratification)
Types of Competition
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 12
Remember that when any new product is launched, you have to monitor the customer’s reaction in order to make any changes to the features.
At the same time remember that all your competitors will also buy the product to take it apart and see in detail what special components you incorporated into the new design.
- reverse engineering
Competition
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 13
Objectives ShouldGuide the firms
• Engage in activities that provide a socially and economically useful function
• Develop an organization to carry on the business and implement its strategies
• Earn enough profit to survive
“Objectives should set the firm’s course”
Page 60
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 14
Organize to Innovate
• G• O• P• S• T
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 15
Organize to Innovate
• Goal• Objectives• Plans• Strategy• Tactics
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 16
Profit
• “… a firm must make a profit to survive …”• “… management must specify the time period
involved”• how long can you afford to wait, before you
eitherA. go bankruptB. begin making “serious” money
Page 61
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 17
Mission Statement• “… sets out the organization’s basic purpose
for being…”
• “… focus on a few key goals”
• use language which is motivating and creates enthusiasm
• choose words which allow you to be understood by other people
• provide guidelines for executive decision making
Page 61
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 18
The Mission Statement, which fosters the Corporate goal, and objectives, should lead to the marketing objectives
Page 62
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 19
The Pressure of Competition
Page 63
Japanese companies had better manufacturing techniques and Japanese bikes were cheaper - so Harley had to work harder at making their production costs less - at the same time they worked hard to create an “image” so people would want to pay more for their bigger bikes.
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 20
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 21
• Monopoly
• Oligopoly
• Monopolistic Competition
• Pure Competition
Types of Competitive Structures
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 22
Monopoly
A monopoly exists when a firm offers a product that has no close substitutes. Because the organization has no competition, it controls supply of the product completely and can erect barriers to potential competitors
Types of Competitive Structures
Page 65
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 23
Oligopoly
“A few sellers, or large firms, and many smaller ones”
Types of Competitive Structures
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 24
Oligopoly
An Oligopoly exists when a few sellers control the supply of a large portion of the product.
Example - 6 main banks in Canada (soon to be reduced to 4)
Types of Competitive Structures
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 25
Monopolistic Competition
”Is a market situation that develops when a market has;1. Different products2. Sellers feel they do have some competition“Each firm is trying to get control in their own little market”
Types of Competitive Structures
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 26
Monopolistic Competition
This exists when a firm with many different competitors attempts to develop a marketing strategy to differentiate its product.Example LEVI
- there are many different brands of jeans
- what LEVI has done is try to make its marketing “unique” so their product “stands out”.
Types of Competitive Structures
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 27
Pure Competition
“Many buyers and sellers”
easy for buyers and sellers to get involved
people have little difficulty in starting their own business
Types of Competitive Structures
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 28
Pure Competition
This exists when there are a large number of sellers, and nobody has a dominant position.
The closest example to this is the weekend “farmers markets” that allow farmers to sell agricultural products to individual customers.
Types of Competitive Structures
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 29
Competitor Analysis
Page 65
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 30
Competitor Analysis
“The best way for a manager to avoid competition, is to find better ways to satisfy customer needs…”
IF your people cannot come up with any new ideas, one thing you can do is look at what the competition is doing, and see if you want to copy that, or change it slightly, or develop a totally new variation.
Page 65
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 31
Competitor Analysis
“You compare the strengths and weakness of your current Marketing Strategy [= target market + marketing mix], with what competitors are doing…”
Page 64
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 32
Competitor Analysis
Where do you get information about competitors
•“monitor local newspapers”
•“middlemen”, brokers, agents
•employee newsletters
•web sites
•sub-contractors
•people who no longer work there Page 64
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 33
Competitor Analysis
So instead of stealing the information -
Take the people
- its called “Competitive Executive Recruitment”
Page 64
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 34
Anticipate Competition
What will Motorola do when Nokia comes up with a small phone like the Startac?
Page66
Only 3.08 pounds with battery. $900 US
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 35
Competitive Barriers• Things which make it difficult for other
companies to compete in a market
• Things which make it tough to do business there
• government regulations• advertising rules• distribution alliances• “getting cooperation in the channel”• patent protection
Page 66
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 36
Economic and Technological Environments
“We will treat the economic and technological environments separately”
Page 68
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 37
Page68
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 38
The factors in a region or country that affect the production, distribution, and consumption of its wealth. Key elements are monetary resources, inflation, employment, and productive capacity.
Economic Environment
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 39
The applications of knowledge based on scientific discoveries, inventions, and innovations.
Technological Environment
Advances in technology frequently lead to price reductions due to
- newer more efficient production methods ie. circuit boards
- new materials create better components ie. Lithium batteries for cell phones and laptop computers
Page 74
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 40
Technological Environment
Biggest challenge is keeping up with the pace of changes
eg.
•386, 486, 486DX, Pentium, Pentium II
•3 1/2 drive , CD ROM, DVD
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 41
Socio-Cultural Environment
CONSUMERISM
- making business more responsible to the consumer
- the evolution of consumer rights
- product safety
- false advertising etc.
- environmental and socially responsible
Not mentioned in 9th edition
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 42
Socio-Cultural Environment
CONSUMERISM
- “ … a social movement that seeks to increase the rights and powers of consumers and buyers…”
Ralph Nader
To accompany Basic Marketing, Shapiro, 9th Cdn Ed. ppt slides created and Copyright by Tim Richardson
Chapter 3
Marketing 106
Slide 43
Political Environment
