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Marketing: An IntroductionArmstrong, Kotler, Trifts, Buchwitz, Gaudet
5th Canadian Edition
With DUANE WEAVERWith DUANE WEAVER
CHAPTER 4
Analyzing the Marketing Environment
with Duane Weaver
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Outline• Environmental Forces• MicroEnvironment• MacroEnvironment• Macro: Demographics• Generational Groups• Canadian Impacts
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Environmental Forces
• Forces that affect firm’s success • Microenvironment: • Forces with direct impact to the company• Internal & External
• Macroenvironment: • External forces with direct impact across industries
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Environment Impact on Decisions
MicroMicroenvironment• Stakeholders (aka: publics): • Groups with interest in or impact on
a firm’s ability to achieve objectives• Strategic decisions must consider
impact on all stakeholders
The Company
Suppliers
Marketing Intermediaries
Customers
Competitors
Publics
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Environment Impact on DecisionsMacroMacroenvironmental Forces: • external & non controllable• Main sources of opportunities and threats• Strategic decisions stem from developing trends
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Environment Impact on Decisions
•Macro: Demographics
• The study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics.
• Marketers track changing age and family structures, geographic population shifts, educational characteristics and population diversity.
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Environment Impact on Decisions
Three largest generational groups:
Baby Boomers
• 1947-1966• 9.8 million• Wealthy but hard
hit by recession
Generation X
• 1967-1976• 7 million• Highly educated• Experientially
driven
Millennialsor Generation Y
• 1977-2000• 10.4 million• Tech savvy• Personally centered
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Just so you Know
When it celebrated its110th year of operations in 2013, Harley Davidson ® was simultaneously confronted with an inevitable fork in the road. It’s target market, male baby boomers, were slowly but surely aging away from profitability. While a significant number of Gen X and millennials would be there to carry the torch, HD ® saw the looming threat of the demographic shift.
Faced with the dilemma of introducing a new product for a new market, while still maintaining a current product for a current market – all the while protecting the brand that got you there in the first place – how would you advise the motorcycle company to proceed?
Visit www.harley-davidson.com to see how it approaches generational marketing
Hog Wild Generational Marketing
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Environment Impact on DecisionsCanadian Impacts
• Canadian family/household are changing:• Growing market of “non-traditional” households• Growing “crowded nest” syndrome• Fewer families have children• More dual-income families
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Geographic shifts in population:• Growth rates across Canada are not uniform• Rural to urban migration continues• Buying habits differ by region• Growth in telecommuting market
Environment Impact on DecisionsCanadian Impacts
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• Better educated, white-collar population:• Increased demand for higher quality• Increased understanding of value• Creates demand in different products
Environment Impact on DecisionsCanadian Impacts
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• Increasing diversity:• Large and growing visible minority market• Growth in recognized disabilities• Acceptance of LGBT and gay marriages
Environment Impact on DecisionsCanadian Impacts
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• Factors that affect spending• Changes in income • Consumption frenzy, record personal debt• Economic crisis leading to consumer frugality• Value marketing is key to success
• Changes in spending patterns• Engel’s laws note that consumers at different income levels have different
spending patterns
Environment Impact on DecisionsCanadian Impacts
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Economic Changes
• Changes in income• 1980’s – consumption frenzy.• 1990’s – “squeezed consumer.”• 2000’s – value marketing.
• Income distribution• Upper class – major market for
luxury goods.• Middle class – careful but has
the good life.• Working class – sticks to the
basics.• Underclass – counts every
penny first.
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Technological Environment
• Technology advances • Creating new markets and opportunities• Increasing obsolescence • Accelerating customer needs• Resulting in constantly evolving
regulations
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Political Environment
Regulatory Trends:• Evolving laws influence organizations• Marketing activities face:• Increasing legislation• Changing government agency enforcement• Society’s emphasis on ethics and socially responsible behavior
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Cultural Environment
• Standard acceptable belief system that affects a society’s basic values• Core beliefs slow to change• Secondary beliefs are more open to change
CORE
Secondary
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Cultural Environment
• Society’s major cultural views are expressed in people’s views of:• Themselves• Others• Organizations• Society• Nature• The Universe
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Responding to the Marketing Environment
Reactive Proactive• Wait for change; then react • Anticipate change; act now
• Missed opportunities • Seized opportunities
• Damage from threats • Mitigate impact of threats