Marketing Chapter 3

The Marketing Environment

ObjectivesTo understand:

The importance of environmental scanningThe importance of economic and competitive factors in

marketingThe laws associated with marketingNew technology and its impact on marketingSocio cultural issues marketers deal with

Examining & Responding to the Marketing Environment

Environmental Scanning:Process of collecting info about forces in the marketing

environment.Internet - great way to gather data :)Observations - look at competitionGives edge over competitorsMust know how to use this information! Dugh!

Environmental AnalysisProcess of assessing and interpreting information gathered

through environmental scanningHelps identify threats & opportunitiesHelps with strategic planningLooks at accuracy of data and how it can help

How Do Marketers Respond To Environmental Forces?

Proactive - try to make changes to better their own situation

Reaction - deal with the environment and make no change

Competitive ForcesCompetition - other organizations market products

that are similar or the same in the same geographic area.Four Types of Competitors:

Brand: same prod same price same customerProduct: same prod different featuresGeneric: Total Budget:

Competitive StructuresMonopoly - One competitor (no subs) Water Utility

Oligopoly - Few competitors (may have barriers to get into the market)

General Motors (cars)

Monopolistic Competition - Many competitors (diff prods w/ many subs) ex: Levi Jeans

Pure Competition - Unlimited competitors (unregulated farmers market) Do not influence price or supply of goods. Not common

Economic ForcesBusiness Cycle

ProsperityRecessionDepressionRecovery

Economic Forces Cont.Buying Power

IncomeDisposable Income - after taxDiscretionary Income - after bills paid

Willingness to Spend: satisfaction and ability

Political ForcesLegislation & Regulations

Political officials influence marketingMarketers should maintain good relations (donations, etc)Government are huge purchasers of goods/services! :)

Legal & Regulatory ForcesFederal Laws

TrademarkAnti-Trust LawsConsumer Protection

Federal Trade Commission

Technological ForcesTransformed US Economy

Communications - marketers can reach out to all consumers and markets

Email - the number 1 use for the Internet!

Socio cultural ForcesInfluences in a society - change peoples beliefs, etc.

Offer marketers challengers/opportunities3 Major Areas

DemographicsCultural ValuesConsumerism