Chapter 2 The Marketing Environment and Marketing Ethics

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Chapter 2 The Marketing Environment and
Marketing Ethics
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(No Transcript)
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Environmental Scanningand Environmental
Management

• Environmental Scanning is the process of
  collecting information about the external
  marketing environment to identify and interpret
  potential trends

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Environmental Influences
Legal Regulatory Technological
Sociocultural
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THE COMPETITIVE ENVIRONMENT

• Competitive Environment The interactive process
  that occurs in the marketplace among marketers of
  directly competitive products, marketers of
  products that can be substituted for one another,
  and marketers competing for the consumers
  purchasing power.

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Key terms

• Sales units sold
• Category penetration of people that has used
  the product at least once.
• Market share Sales of brand / Total industry
  sales.
• EXCEL Spreadsheet

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Sales by make of automobile
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How to compute Market Share?

• Lets say industry X has three firms.
• A sells 50 units
• B sells 40 units
• C sells 10 units
• Total Industry Sales

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Market Share (contd.,)

• Market share for A Sales of brand A / Total
  industry sales
• Market share for A
• Market share for B
• Market share for C

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Market Share

• There are three brands, Asterix, Bloom, and
  Caston. Asterix sold 400 units last year at 10
  /unit, Bloom sold 500 units last year at 5
  /unit, and Caston sold 100 units at 20 /unit.
• Compute the MS (in units sold and in revenues)
  for Asterix, Bloom, and Caston.
• MSi Sales of Brandi / Total Sales of all brands
• MSAsterix 400 / 1000 40
• MSBloom 500 / 1000 50
• MSCaston 100 / 1000 10

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Market Share in terms of revenues

• Revenues Price Total Units Sold
• Revenues for Asterix
• Revenues for Bloom
• Revenues for Caston
• Total Revenues 8500.
• MS Asterix (in terms of revenues)
• MS Bloom
• MS Caston

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Market Share Light Beers
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Market Share
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Types of Competition
Direct
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Types of Competition
Direct
Indirect
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Types of Competition
Direct
Indirect
General (Budget)
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Developing a Competitive Strategy
3. How should we compete?
2. If so, in what marketsshould we compete?
1. Should wecompete?
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Political-Legal Factors

• Political-Legal Environment Component of the
  marketing environment consisting of laws and
  interpretations of laws that require firms to
  operate under competitive conditions and to
  protect consumer rights.

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Government Regulation --The Four Phases

• Began in the late 19th century
• Aimed at to maintaining a competitive
  environment by reducing the trend toward
  monopolies
• Included - Sherman Antitrust Act -
  Clayton Act - Federal Trade
  Commission Act

Protection of Competitors
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Government Regulation --The Four Phases

• Began during the depression era of the 1930s
• Meant to protect independent merchants against
  competition from larger chain stores
• Included the Robinson-Patman Act

Protection of Small Businesses
Protection of Competitors
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Government Regulation --The Four Phases

• Began mainly in the 1960s
• Increased focus on consumer protection
• Included - consumer credit
  protection act - consumer product
  safety commission
• FDA

Protection of Consumers
Protection of Small Businesses
Protection of Competitors
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Government Regulation --The Four Phases
Industry Deregulation

• Began in the late 1970s
• Focused on deregulating specific industries
• Included - Airline Deregulation Act -
  Telecommunications Act

Protection of Consumers
Protection of Small Businesses
Protection of Competitors
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Other Regulatory Forces

• Consumer interest groups
• National Coalition Against Misuse of Pesticides
• Special-interest groups
• American Association of Retired People (AARP)
• Self-regulatory groups
• Council of Better Business Bureaus

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THE ECONOMIC ENVIRONMENT

• Economic Environment Factors that influence
  consumer buying power and marketing strategies,
  including stage of the business cycle, inflation,
  unemployment, resource availability and income.

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Business Cycles

• Cyclical patterns consisting of the stages of
  prosperity, recession, depression, and recovery.

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Economic Environment

• Macroeconomics
• GDP total income (or expenditure) of everyone
  in the economy
• Interest Rates
• Inflation the change in the overall level of
  prices.
• Microeconomics
• Buying Power
• Future Expectations

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Economic Environment

• Buying Power and Income
• Gross Income
• Pre-Tax Income
• Disposable Income
• After-Tax Income used for basic monthly expenses
  (food, clothing shelter)
• Discretionary Income
• The money used for savings and fun

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THE TECHNOLOGICAL ENVIRONMENT

• The technological environment represents the
  application of knowledge in science, inventions,
  and innovations to marketing.

Technology as a disequilibriating force
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THE SOCIAL-CULTURAL ENVIRONMENT

• Marketings social-cultural environment the
  relationship between marketing and society and
  its culture.
• Recognizing Trends

Demography - Study of populations
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Population Cohorts

• Gen Y 60 mil.,
• Information and technology savvy, very discerning
• Gen X 40 mil.,
• Gender equality, accept diversity
• Baby boomers 78 mil.,
• Individualistic, independent, material, affluent

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The Socio-cultural Environment

• Cultural diversity
• Ethnic distribution changing
• Gender Diversity
• Population Issues
• Population growth slowing
• Aging population
• Changing sex roles
• Desire for convenience (Poverty of time)
• Emphasis on health and fitness