1. THE MARKTING ENVIRONMENT

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1. THE MARKTING ENVIRONMENT

• Environment Scanning The process of collecting
  information about the forces in the marketing
  environment.
• Environmental Analysis
• Assessing implications and
• deriving implications for your firm

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Objectives Of Environmental Scanning
?

• Detect scientific, technical, economic, social
  and political trends/events
• Define potential threats, opportunities, or
  changes implied by trends/events
• Promote future orientation in management/staff
  thinking
• Alert management/staff to trends converging,
  diverging, speeding up, slowing down or
  interacting

Horizon Site, Environmental Scanning by James
Morrison, 1992, http//horizon.unc.edu/courses/pap
ers/enviroscan/
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Scanning Involves

• Observation
• Secondary Sources
• Business
• Trade
• Government
• General-interest publications
• Marketing research
• Cautions
• Know how to use information
• Dont gather too much information

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Responding To Environmental Forces

• Accept as uncontrollable- passive and reactive
• Attempt to influence and shape them-proactive
• Constructive
• Bring desired results
• Are limits

(Toyota responding to environmental forces. Page
59)
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LEVEL OF MARKET COMPETITION
Competition Budget
Competition Generic
Competition Product Category
Competition Product Form
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Society of Competitive Intelligence Professionals

• Monitoring Competition
• Helps determine competitors strategies and their
  effects on firms strategies
• Guides development of competitive advantage and
  adjusting firms strategy
• Provides ongoing information about competitors
• Assists in maintaining a marketing orientation

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Competitive Structures

• Royal Mail Monopoly

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Factors Contributing To Creation Of Oligopolies
?

• Plentiful, inexpensive money for buyouts
• Investor emphasis on gross income growth rather
  than profit margins
• Optimism about ever-expanding consumption
• Laissez-faire attitude about industry
  concentration
• Key brands/brand management important
• New international markets
• Looser rules on transnational ownership
• Felt as best bet for corporate survival

Oligopoly Watch, First principle of
oligopolies, Oct. 2003, http//www.oligopolywatch
.com/2003/10/07.html
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Monitoring Competition

• Price- most competitors monitor
• Do more than analyze information
• Develop ongoing system for gathering information
• Understand market - customer needs
• Helps in recognition of own strategy flaws

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3. ECONOMIC FORCES

• Economic Conditions
• Buying Power
• Willingness to Spend

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Economic Conditions

• Business Cycle
• Prosperity
• Recession
• Depression
• Recovery

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Buying Power

• Income
• Disposable Income
• Discretionary Income
• Wealth

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Gains In Buying Power (1990-2010)
Augustachronicle.com, Minority Buying Power,
Oct. 22, 2005,http//chronicle.augusta.com/divers
ity/2005/buying-power.shtml
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Willingness To Spend

• An inclination to buy because of expected
  satisfaction from a product, influenced by the
  ability to buy and numerous psychological and
  social forces.

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American Consumer Satisfaction Index
?
Figure 3.1
Source American Customer Satisfaction Index,
University of Michigan Business School, Sept.
2005, www.theacsi.com
U.S. Automakers Slippingin Consumer
Satisfaction
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4. POLITICAL FORCES

• Legislation enacted
• Legal decisions interpreted by courts
• Regulatory agencies created and operated
• Marketers
• Adjust to conditions
• Influence through contributions

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Top Corporate DonorsBy Political Party
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5. LEGAL ANDREGULATORY FORCES

• Procompetitive legislation- preserves competition
• Consumer Protection legislation
• Protect people from harm
• Prohibit hazardous products
• Information disclosure
• Particular marketing activities
• Encourage compliance
• Regulatory Agencies
• Self-Regulatory forces

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Legal Forces

• - Objectives
• - protect companies from each other
• - protect consumers from companies
• - improve competition
• - protect society
• these objectives are sometimes often in
  conflict

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Federal Trade Commission Enforcement Tools
Figure 3.2
Source www.ftc.gov.
Federal Trade Commission Website
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Advertising and the FTC

• - ad substantiation
• - drop ads
• - affirmative disclosure
• - corrective ads
• - counter ads
• - implied uniqueness
• - comparative ads

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Product

• - product liability
• - tort reform
• - fair packaging/labeling
• - warranty protection

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Channels

• tying arrangements
• collusion

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Pricing

• - discriminatory pricing
• - price fixing
• - conscious parallel action
• - price signaling
• - price protection
• - free riders

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Major Laws AffectingMarketing Decisions
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Regulatory Agencies
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Self-Regulatory Forces

• Trade Associations
• Better Business Bureau
• National Advertising Review Board
• Advantages
• Less expensive
• More realistic
• Limitations
• Nonmember firms do not have to abide
• Lack of enforcement tools
• Often less strict

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Direct-To-Consumer Pharmaceutical Guidelines
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6. TECHNOLOGICAL FORCES

• Impact of Technology
• Effects include
• Dynamics
• Reach
• Self-Sustaining
• Adoption and Use of Technology

(Monster.com has changed the way people search
for jobs. Page 72)
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7. SOCIOCULTURAL FORCES

• The influences in a society and its culture(s)
  that change peoples attitudes, beliefs, norms,
  customs, and lifestyles.

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Issues Of Sociocultural Forces

• Demographic and diversity characteristics
• Age, gender, race, ethnicity
• Marital/parental status, income, education
• Cultural Values
• Health
• Family
• Environment
• Consumerism- efforts to protect consumers rights