the marketing environment

Monitoring the environment
• Intelligence – gathering should be recognized as important marketing functions • Trends, new developments should be constantly identified in each of the 6 environments
Political and legal forces
• Monetary and fiscal policies government spending, interest rates, money supply, tax legislation • Legislation regarding business competition, consumer interest protection 1. Norway bans premiums, contests as unfair instruments for promoting products 2. Thailand requires food processors selling national brands to market low-price brands
Social-cultural environment
• Society shapes our beliefs, values and norms 1. emphasis on quality of life 2. changing gender roles 3. Interest in health, nutrition and spiritual wellbeing • Tobacco industry
Economic conditions
• Inflation: prices rise at a faster rate than personal income, a decline in consumer buying power Low inflation Cost containment and productivity • Interest rates: used as an important tool by government to direct or influence economy 1. high interest rates: low spending in long – term purchases, such as housing 2. low interest rates: more spending • Employment levels disposable income and discretionary income
Chapter 2
The marketing environment
The marketing environment
• The external environment within which an organization carries out its marketing programs is largely beyond the control of an individual organization • Changing marketing environments constantly present opportunities and threats
Economic conditions
• • • • • Business cycle stages Inflation Interest rates Employment levels, … What people buy, when and how?
Stages of a business cycle
Economic conditions
• Stages of business cycle 1. Prosperity: economic growth, companies add new products and enter new markets – to expand marketing programs 2. Recession: a period of contraction for consumers and companies. High unemployment rate, spending cut back 3. Recovery: moving from recession to prosperity. Companies expand marketing efforts
Βιβλιοθήκη Baidu
Competitive structure
structure C number C size P nature Seller price control Entry pure Very many Small homogeneo us None Very easy monopolistic Many Varied differentiated Some - D Easy oligopoly Few Large H or D Some – with care Difficult monopoly One none Unique complete Very different
Technology
• Every new technology is a force for “creative destruction” • Major technological breakthroughs carry a three-fold market impact: 1. Start entirely new industries 2. Radically alter or virtually destroy existing industries Auto and railroads, television and newspapers, etc. 3. Stimulate unrelated markets and industries: home appliances and frozen food – additional free time to engage in other activities • A mixed blessing: improve lives in one area, creating environmental and social problems in others. Cars, television
Economic conditions
Competition Demographics Company’s Marketing program
Social and cultural forces Political and legal forces
Technology
The macro – environment of a company’s marketing program
Demography
• The statistical study of human population and its distribution • The aging population • The growing single parent and DINK families • The regional population shift • The increasing proportion of the population who have ethnic origins
Competitive structure
• • • • Pure competition: an ideal Monopolistic competition: most prevalent, differential advantage Oligopoly: a few large sellers Monopoly: one firm only
Competition
• Competitors’ marketing activities (their products, pricing, distribution and promotional programs) present a major influence shaping our own marketing system • A company’s marketing program is also influenced by the type of competitive structure in which it operates