THE MAJOR ELEMENTSSOCIALECONOMICPOLITICALLEGALTECHNOLOGICALCOMPETITIVE

GLOBAL ENVIRONMENT AFFECTSdecisions about • the marketing strategies• activities• Positions• institutions employed by your organizationThe decisions you can control depend upon the

uncontrollable factors in the market. • Identify strengths, weakness, opportunity and threat.

MARKET OPPORTUNITY AND THREATS

Changes in the marketing environment can directly affect specific markets.

Market opportunities typically arise when markets increase in size or new markets are created.

population growth, increases in income, and lower interest rates should present market opportunities.

OPPORTUNITY CONTD…Social changes, such as more women in the workforce

and as heads of households, can affect who makes the car buying decision, thus creating market opportunities.

THREATS• slow population growth, reduced incomes, and higher

interest rates would present threats.• E.G. for the car market, there would be fewer people

with the financial ability to purchase cars given the above factors.

• E.G. Legislation requiring automakers to improve gas mileage is an example of political decision and threat.

OPPORTUNITY• The legislation, however, might also be viewed as an

opportunity to create new markets for cars with extremely good gas mileage or those that use alternative fuels, such as the electric car.

• Changes in the technological environmentprovide opportunities to produce these high-mileage or

alternative-fuel cars.

SCANNING THE ENVIRONMENT

THE SOCIAL ENVIRONMENTIncludes all factors and trends related to groups of

people, including their number, characteristics, behavior, and growth projections.

Consists of: Demographic and cultural environment.

DEMOGRAPHIC ENVIRONMENT• The demographic environment refers to the size,

distribution, and growth rate of groups of people with different characteristics.

• The demographic characteristics of interest to marketers relate in some way to purchasing behavior, because people from different

countries, cultures, age groups, or household arrangement often exhibit different purchasing behaviors.

GLOBAL PERSPECTIVEMarketers have to be familiar with the demographics

of different countries.Population size and growth rateMust consider developing countries as well.Urban and rural population.Population ageFamily trends- married people with children

CULTURAL ENVIRONMENT• factors and trends related to how people liveand behave.• values, ideas, attitudes, beliefs, andactivities of specific population subgroups, greatly affect

consumers’ purchasingbehavior.

ISLAMIC COUNTRIESUnited in Faith.Islam -submission to the will of God.Islam consumer practices fast (ramzan), prayers,

zakat (charity), pilgrimage (hajj).Source of Law: Quran.Properly slaughtered meat can be consumed.Swine, dead meat etc prohibited.

ISLAMIC COUNTRIES CONTD…Women should guard their beauty.Should not display beauty to strangers.

NIKE AD

CULTURAL DIVERSITYA cultural group’s characteristics affect the types of

products it desires and how it purchases and uses those products.

E.G. Canned food will have a bigger market in U.S.A. than in India.

CHANGING ROLESMore women enter the workforce and household

compositions change, typical household roles are altered.

Women also support financially.Therefore, household activities will be equally shared. Shopping will be done by both men and women.

EMPHASIS ON HEALTH AND FITNESS

• Eating nutritious food.• Diet conscious customers.- E.G. Diet drinks.

DESIRE FOR CONVINIENCE• More working women.• Increase in purchasing power.• Save time.• Increase in products that provide convenience such as

vacuum cleaner, microwave, etc.

CONSUMERISM• Protect the rights of consumers.• Consumer awareness and education.• Legal rights of the consumers.• Demand for higher quality and service.• Increase in environmentalism.

ECONOMIC ENVIRONMENTfactors and trends related to income levelsand the production of goods and services.affect the purchasing power of the markets.E.G. Tax free U.A.E. is a trade hub. E.G. Currency fluctuations.E.G. India has low per capita income, but potential

market for MNCs such as KFC, Coca Cola, Pepsi. Sub groups have power .

POLITICAL / LEGAL ENVIRONMENTfactors and trends related to governmental activities

and specific laws and regulations that affect marketing practice.

closely tied to the social and economic environments.international, state, and local levels.

KEY US LAWS AFFECTING MARKETING

A. Promoting competitionAct Purpose• Sherman Act (1890) Prohibits monopolistic practices• Clayton Act (1914) Prohibits anticompetitive activities• Federal Trade Commission Act (1914) Establishes regulatory

agency to enforce laws against unfair competition• Robinson–Patman Act (1936) Prohibits price

discrimination• Lanham Trademark Act (1946) Protects trademarks &

brand names• Magnusson–Moss Act (1975) Regulates warranties• US–Canada Trade Act (1988) Allows free trade between US

& Canada

KEY US LAWS AFFECTING MARKETING

B. Protecting consumers & societyAct Purpose• Food, Drug, and Cosmetics Act (1938) Regulates food, drug &

cosmetic industries• Fair Packaging and Labeling Act (1966) Regulates packaging &

labeling• Child Protection and Toy Safety Act (1969) Prevents marketing of

dangerous products to children• Consumer Credit Protection Act (1968) Requires full disclosure of

financial charges for loans• Fair Credit Report Act (1970) Regulates reporting & use of credit

information• Fair Debt Collections Practice Act (1970) Regulates methods for

collecting debts• Child Protection Act (1990) Regulates advertising on children’s

television programs• Americans with Disabilities Act (1990) Prohibits discrimination

against consumers with disabilities

IMPORTANT INDIAN REGULATORY AGENCIES AND ACTS• Food Corporation of India Act, 1964• Essential Commodities Act, 1955• Bureau of Indian Standards Act, 1986• Standards of Weights and Measures Act, 1976• The Consumer Protection Act, 1986• The Monopolies & Restrictive Trade Practices Act,

1969• Competition Commission of India (CCI)• Monopolies and Restrictive Trade Practices

Commission (MRTPC).

TECHNOLOGICAL ENVIRONMENTfactors and trends related to innovationsthat affect the development of new products or the

marketing process.new-product development, affect how marketing

activities are performed, or both.Technology changes the way in which companies

function.E.G. Television, radio, internet, fax machine.

COMPETITIONBrand Competition- E.G. Nike, Reebok, Adidas all

provide the same products under different brand name.

Product Competition- E.G. Food Chains, Dominos, KFC, Pizza Hut, McDonalds.

Expand product offerings.Competitive advertising.