Principles of MarketingMKT 333

Chapter 4Evaluating Opportunities in the Changing Marketing Environment

Three Basic Objectives Provide Guidelines

Engage in specific activities that will provide a socially and economically useful function

Develop an organization that can carry on the business and implement its strategies

Earn enough profit to survive

Organizational Mission

A statement of company purpose. Explains why the organization exists and what it hopes to

accomplish.An organizational mission: Sets the direction for the company Defines the business

Marketing Environments

MarketingMarketingMixMix

DomesticDomesticEnvironmentEnvironment

ForeignForeignEnvironmentEnvironment

OrganizationOrganization

SocioculturalSociocultural

DemographicDemographic

Politics andPolitics andlawlaw

Science and technologyScience and technology

PhysicalPhysicalenvironmentenvironment

Economic &Economic &competitivecompetitive

Broad societal forces that shape every Broad societal forces that shape every business and nonprofit marketer.business and nonprofit marketer.

The Macroenvironment

Physical Environment

The environment consisting of natural resources The environment consisting of natural resources and other aspects of the natural world.and other aspects of the natural world.

Includes:Includes: Natural resourcesNatural resources ClimateClimate

Physical Environment

Green Marketing: Marketing activities beneficial to the physical environment.

“Green” products “Green” packaging

Competitive Forces

CompetitiveCompetitiveMarketMarketStructuresStructures

Pure competitionPure competition

MonopolisticMonopolisticcompetitioncompetition

OligopolyOligopoly

MonopolyMonopoly

Competitor Analysis

A tool to help us evaluate the strengths and weaknesses of competitors

Economic Forces

Economic Measures: Gross Domestic Product (GDP): Total value of

goods and services produced by capital and workers in a country.

Gross National Product (GNP): Total value of goods and services produced by a nation, regardless of location.

Economic Forces

Interest Rates Inflation

Science and Technology

Science: Accumulation of knowledge about humans and the environment.

Technology: Application of science to practical purposes.

Includes: Information technology Communications

Politics and Law

Political environment: Practices and policies of governments.

Legal environment: Laws and regulations and their interpretation.

How do politics and law affect marketing?

Can limit the actions marketers take

can require certain actions be taken

can prohibit certain actions

Antitrust Laws

Federal laws which promote competition in U.S. markets.

Sherman Anti-trust Act Clayton Act Federal Trade Commission Act

Consumer Protection Law

Product Safety Labeling Health standards

International Law

Legal systems vary tremendously by country

Multinational Marketing Groups

Sociocultural Environment

The institutions, values, beliefs, and behaviors of a society.

Includes: Culture Social values Beliefs

Social Environment

Migration Age Income Ethnicity Urbanization Literacy

1935 1970 2005

13

19

26

Birt

hrat

e25.0

18.7

19.4

14.614.0

16.6

After a peak between 1950 and 1955, U.S. Birthrates declined steadily until 1975. Following a brief rise in rates finishing about 1990, rates have again begun to fall.

4-14

Changes in U.S. Birthrate, 1935-2005

Insensitive Sensitive

Basiccommodity-typeconsumerproducts

Industrialproducts

Consumerproducts thatare linked to

culturalvariables

Exhibit 4-104-19

Continuum of Environmental Sensitivity

CustomersNeeds and other

SegmentingDimensions

CompanyObjectives

& Resources

CompetitorsCurrent &Prospective

S.S.W.W.O.O.T.T.

TargetTargetMarketMarket

Product Place

PromotionPrice

External Market EnvironmentTechnological Political & LegalSocial & Cultural Economic

Segmentation& Targeting

Differentiation & Positioning

Narrowing down to focused strategy with quantitative and qualitative screening criteria

Exhibit 18-1

18-4

Overview of the marketing strategy planning process