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SCANNING THE MARKETING
ENVIRONMENT
CHAPTER
External Marketing Environment
DemographicsDemographics
SocialChangeSocial
Change
EconomicConditionsEconomicConditions
Political & Legal FactorsPolitical &
Legal Factors
TechnologyTechnology
CompetitionCompetition
EnvironmentalEnvironmentalScanningScanning
Target Market
ProductDistributionPromotion
Price
ProductDistributionPromotion
Price
External Environment External Environment is not controllableis not controllable
Ever-ChangingEver-ChangingMarketplaceMarketplace
An environmental scan of today’s marketplace
A lack of time to do anything but work, commute to work, handle family situations, do
housework, shop, eat, sleep...
Social Forces-The Poverty of Time
SOCIAL FORCES- Demographics
Implications?
The World Population at a Glance – 6.4 billion
Growth in developing nations
Shift of age structure of populations
Rising income levels and living standards
The U.S. Population – 297 Million Growth by immigration = niche markets
Generational Cohorts
• Baby Boomers-‘46-’64
• Generation X-’65-’76
• Generation Y-’77-’94 - (Millennials) techno-savvy, live for today
-Increased earnings-seek youth-Well educated, more tolerant, practical
Social Forces - Demographics
SOCIAL FORCES
• Demographics
Population Shifts toward West & South – Why?
• Metropolitan Statistical Area – 362-80%50,000- urban center; suburban collar up to 2.5MEx-Chicago
• Micropolitan Statistical Area-573-10%•10,000-50,000 urban center; large suburb collarEx-Carbondale
ECONOMIC FORCES -Economy
• Macroeconomic Conditions– Inflation-rise in prices without rise in wages– Recession-drop in income, production and employment
• Microeconomic Conditions– Consumer Income
Gross Income – 100% of earnings Disposable Income-85% of earningsDiscretionary Income-15% of earnings
ECONOMIC FORCES
Implications?
Disposable vs Discretionary income
Income Distribution of U. S. Households
• New technology is a weapon against inflation and recession
• U.S. excels at basic research• Japan excels at applied research
• Information technology and the Internet have increased productivity
Technological Factors
COMPETITIVE FORCES -Competition
REGULATORY FORCES
• Protecting Competition
Sherman Antitrust Act (1890) – no monopolies
Clayton Act (1914)- no monopoly activity
Robinson-Patman Act (1936)-no differential pricing to undercut “little” guy
REGULATORY FORCES
Company Protection
• Patent Law-for ideas and inventions
• Product-Related Regulation
• Copyright Law -for written works
• Digital Millennium Copyright Act (1998) -for DVD’s, MP3’s & software
REGULATORY FORCES
Consumer Protection
• Nutritional Labeling & Education Act (1990)
•The above and other laws came about due to cultural shift towards Consumerism
• Product-Related Regulation
• Consumer Product Safety Act (1972)
Consumer Product Safety Commission
REGULATORY FORCES
• Advertising and Promotion-Related Legislation
•Penalties are:•Cease and Desist Order• Corrective Advertising
FTC Act of 1914-no deceptive ads or practices
Do Not Call Registry Children’s online privacy Protection Act 1998 CAN-SPAM Act (2004)
Environmental Scanning
Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.
Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.
Demographics
Demographics describes a population according to selected characteristics such as age, gender, ethnicity, income, and occupation.
Demographics describes a population according to selected characteristics such as age, gender, ethnicity, income, and occupation.
Baby Boomers
Baby boomers is the generation of children born between 1946 and 1964.Baby boomers is the generation of children born between 1946 and 1964.
Generation X
Generation X includes the 15% of the U.S. population born between 1965 and 1976.
Generation X includes the 15% of the U.S. population born between 1965 and 1976.
Generation Y
Generation Y includes the 72 million Americans born between 1977 and 1994.Generation Y includes the 72 million Americans born between 1977 and 1994.
Culture incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group.
Culture incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group.
Culture
The economy pertains to the income, expenditures, and resources that affect the cost of running a business and household.
The economy pertains to the income, expenditures, and resources that affect the cost of running a business and household.
Economy
Technology refers to inventions from basic engineering research or innovations from applied science research.
Technology refers to inventions from basic engineering research or innovations from applied science research.
Technology
Competition refers to the alternative firms that could provide a product to satisfy a specific market’s need.
Competition refers to the alternative firms that could provide a product to satisfy a specific market’s need.
Competition
Consumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions.
Consumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions.
Consumerism