Chapter 2
The Marketing Environment
Learning Objectives
• Understand the importance of monitoring change in the marketing environment
• Describe how trends in the demographic, socio-cultural, economic, and technological environment affect marketing
• Recognize the impact competition has on companies and their marketing programs
• Understand the regulatory forces that encourage free market competition, and protect consumers from questionable marketing practices
2
Environmental Change
3
Changed the way the consumer:
• Collects information• Communicates• Contributes
Changed the way the consumer:
• Collects information• Communicates• Contributes
The Internet
The Internet
Marketing Environment
4
ChangesChanges
Awareness of changes
Awareness of changes
Thwart threatsThwart threats
OpportunitiesOpportunities
Marketing Environment
5
Marketing Environment
The knowledge from a marketing environmental scan Relevant products, services, and ideas
6
Demographic Forces
• Statistics Canada provides access to demographics information
• Companies can complete their own demographics research
7
Demographic Forces - Age
Aging Population
8
People 50+ control 75% of Canadian household net
worth
People 50+ control 75% of Canadian household net
worth
Demographic Forces
9
Demographic Forces – Diverse Generations
Baby Boomers• 60% of consumer goods and service
expenditures• Have redefined the concept of aging
10
Demographic Forces – Diverse Generations
Generation X• 12% of the population• Not brand loyal• Self-reliant• Entrepreneurial• Educated
11
Demographic Forces – Diverse Generations
Generation Y• 27.5% of the population• Technology and sports
12
Demographic Forces - Urbanization
13
Demographic Forces – Ethnic Diversity
• 2/3 of Canada’s population growth is due to immigration
14
Demographic Forces – Non-Traditional Families
Changes in family structure:• More common-law relationships• Single-parent families• Blended families• Same-sex marriages
15
Socio-Cultural Forces
• Marketers monitor socio-cultural forces so they can capitalize on new opportunities
16
Socio-Cultural Changes
• Ethnic foods• Health and fitness• Environmental awareness• Changing gender roles
17
Economic Forces
• A change in the economy impacts a person’s ability to purchase
18
Economic Forces
Key economic indicators:• Inflation rate• Unemployment rate• Economic growth rate
19
Microeconomic Forces
• Gross income• Disposable income• Discretionary income
20
Technological Forces
• What new inventory are being introduced and how consumers are accepting these technological forces
21
Technological Advances
• Internet and search engines• Email, text, and instant messaging• Social networking sites• Video sharing sites• Downloading• Blogs • Online TV• Cell phones
22
Technological Forces
23
Competitive Forces
• An analysis of direct competitors and indirect competitors is necessary in designing a marketing strategy that is responsive to competition
24
Competition
Types of Competitive Markets
25
Regulatory Forces
• A marketer must be aware of regulations that affect how they do business
26
Regulatory Groups
• Competition Bureau• Canadian Radio & Television &
Telecommunications Commission (CRTC)
• Advertising Standards Council (ASC)• Canadian Marketing Association
(CMA)• Better Business Bureau (BBB)
27
Marketing Environmental Scan
• The process of continually acquiring information on events occurring outside the organization to identify trends, opportunities, and threats to your business
28BACK
Demographics
• The statistical data on a population according to characteristics such as age, gender, ethnicity, income, and occupation
29BACK
Baby Boomers
• People born between 1946 and 1964
30BACK
Generation X
• People born between 1965 and 1976
31BACK
Generation Y
• People born between 1975 and 1995
32BACK
Socio-Cultural Forces
• Cultural values, ideas, and attitudes, and society’s morals and beliefs
33BACK
Economy
• The collective income, expenditures, and resources that affect the cost of running a business or household
34BACK
Gross Income
• Total amount of money made in one year by a person, household, or family unit, including taxes
35BACK
Disposable Income
• Balance of income left after paying taxes that is used for spending and savings
36BACK
Discretionary Income
• Money that consumers have left after paying taxes and buying necessities
37BACK
Technological Forces
• Inventions from applied science or engineering research
38BACK
Direct Competitors
• Similar products sold in the same category
39BACK
Indirect Competitors
• Products competing for the same buying dollar in a slightly different, but related, category
40BACK
Competition
• Alternative products that can satisfy a specific market’s needs
41BACK
Regulations
• Restrictions placed on marketing practices by government and industry associations
42BACK