Marketing chapter 3a scanning the marketing environment

McGraw-Hill/Irwin

Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.


LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 3, YOU SHOULD BE ABLE TO:

LO1

Explain how environmental scanning provides information about
social, economic, technological, competitive, and regulatory forces.

LO2

Describe how social forces such as demographics and culture can
have an impact on marketing strategy.

LO3

Discuss how economic forces such as macroeconomic conditions
and consumer income affect marketing.
3-2


LEARNING OBJECTIVES (LO)
AFTER READING CHAPTER 3, YOU SHOULD BE ABLE TO:

LO4

Describe how technological changes can affect marketing.

LO5

Discuss the forms of competition that exist in a market and key
components of competition.

LO6

Explain the major legislation that ensures competition and
regulates the elements of the marketing mix.

3-3


ENVIRONMENTAL SCANNING

LO1

 Environmental Scanning
 SWOT

•

Tracking Environmental Trends

•

Example: Coffee Marketers

•

An Environmental Scan of Today’s
Marketplace

3-4


Social-Cultural Environment

1.

The relationship between the marketer and society and its
culture

2.

U.S. population is getting older, birthrates are falling and it is
becoming more diverse

3.

Marketers must be sensitive to society’s demographic shifts
and changing values


Social-Cultural Environment
Cultural Diversity

1.

U.S. diverse society composed of various sub-markets

2.

Each has unique values, cultural characteristics, consumer preferences,
and purchasing behavior

3.

Social-cultural context exerts more influence on marketing decisionmaking in international sphere

4.

Marketers redesign packages and modify products and advertising
messages to suit tastes and preferences of different cultures


Social-Cultural Environment
Consumerism

1.

Social force that aids and protects the buyer by exerting legal,
moral, and economic pressures on business

2.

Increasing consumer activism in recent years

3.

Firms must weigh consumer demands with profit objectives

•

Dilemma: pleasing customers vs. remaining viable


Social-Cultural Environment
Consumerism

President JFK’s rules of thumb on consumer rights:

1.

Right to choose freely

2.

Right to be informed

3.

Right to be heard

4.

Right to be safe

Framework for consumers-rights legislation

Social-Cultural Environment
Ethics

1.

Concerns matters of right and wrong:
Responsibility of individuals and firm to do

what is right

2.

Increased emphasis on marketing ethics

3.

Means promising customers and business partners not to
sacrifice quality and fairness for profit


Ethical Questions in Marketing

Product

Distribution

•Planned obsolescence
•Product quality and safety

•Product warranties
•Fair packaging and labeling
•Pollution

•Exclusive territories
•Dumping
•Dealer rights
•Predatory competition
•Marginal outlines
Ethical

Promotion

•Bait-and-switch advertising
•Promotional allowances
•Bribery

Issues

Price

•Price fixing
•Price discrimination
•Price increases
•Deceptive pricing


Social-Cultural Environment
Social Responsibility

1.

Consists of marketing philosophies, policies, procedures and actions that
have enhancement of society’s welfare as a primary objective

2.

An obligation to give equal weight to profits. Consumer satisfaction and
social well-being in evaluating firm’s performance:
Qualitative as well as quantitative

3.

Means promising customers and business partners not to sacrifice quality
and fairness for profit


FIGURE 3-1 Environmental forces affect the organization, its suppliers, and its
customers

3-12


FIGURE 3-2 An environmental scan of today’s marketplace shows the many
important trends that influence marketing

3-13


SOCIAL FORCES

LO2

DEMOGRAPHICS

 Social Forces

 Demographics

•

World Population

•

U.S. Population

3-14


FIGURE 3-3 Distribution of the world’s population

3-15


LO2

SOCIAL FORCES
DEMOGRAPHICS—GENERATIONAL COHORTS

 Baby Boomers: 1946 - 1964
 Generation X: 1965 - 1976
 Generation Y: 1977 - 1994
 Millennials: 1995 +
 Generational Marketing
3-16


Olay, Hyatt, and Motorola
Which generational cohort is being reached?

3-17


LO2

SOCIAL FORCES
DEMOGRAPHICS—THE AMERICAN HOUSEHOLD

 Marital Status

 Cohabitation

 Blended Family

3-18


SOCIAL FORCES

LO2

DEMOGRAPHICS—POPULATION SHIFTS

 Regional Shift in the U.S.

 Shifts Within States

•

Suburbs

•

Exurbs

•

Penturbia
3-19


SOCIAL FORCES

LO2

Statistical Areas



Metropolitan Statistical Area



At least one urbanized area of 50,000 or more people and
adjacent territory that has a high degree of social and
economic integration



Shifts Within States



At least one urban cluster of at least 10,000 but less than 50,000
people and adjacent territory that has a high degree of social
and economic integration

3-20


SOCIAL FORCES

LO2

DEMOGRAPHICS—POPULATION SHIFTS



Statistical Areas (SA): Illinois

• Combined SA: NE Illinois

• Micropolitan SA: Dixon, IL

• Metropolitan SA: St. Louis, MO & SW IL

• Metropolitan Division: Chicagoland

3-21


SOCIAL FORCES

LO2

DEMOGRAPHICS—RACIAL & ETHNIC DIVERSITY

 Composition
 Trends

•

African Americans

•

Hispanics

•

Asian Americans

 Multicultural Marketing
3-22


FIGURE 3-4 Racial and ethnic groups (excluding whites) are concentrated in
geographic regions of the United States

3-23


SOCIAL FORCES

•

Culture – set of values, ideas, and attitudes that are learned and shared among
members of a group



The Changing Attitudes and Roles of Men
and Women

 Career mothers
 Increased participation in organized sports
 Internet has made gender, race, and ethnicity
disappear

 Most believe men and women should share most
responsibilities equally
Slide 3-20


ECONOMIC FORCES

LO3

MACROECONOMIC CONDITIONS

 Economy

•

Inflation

•

Recession

•

Consumer Sentiment

3-25