The Marketing Environment
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THE MARKETING ENVIRONMENT
3-1
Target Market
A defined group most likely to buy a firm’s product.
3-2
Understanding the External Environment “Environmental Scanning” By collecting and evaluating environmental information marketers can identify future marketing opportunities and threats
3-3
External Marketing Environment External Environment is not controllable
Social Change
Ever-Changing Marketplace
Demographics
Economic Conditions
Product Distribution Promotion Price Competition
Target Market Political & Legal Factors
Environmental Scanning
Technology
3-4
External Marketing Environment Social Demographic Economic External Environmental Factors
Technologic Political and Legal Competitive 3-5
Environmental Management When a company implements strategies that attempt to shape the external environment with which it operates
3-6
Social Factors Social Factors
Values
Lifestyle Attitudes
3-7
3-8
Attitude
3-9
3-10
3-11
3-12
Lifestyle
3-13
Healthy Lifestyle
3-14
Marketing Oriented Values Cultural Creativity
Today’s MarketingOriented Values
Traditionalism
Modernism
3-15
VS
3-16
Marketing-Oriented Values
Cultural Creativity Traditionalism Modernism
Interested in new products and services “Heartlanders” with nostalgic views Place high value on success, materialism, technology
3-17
The Scarce Commodity
3-18
Is work consuming a huge portion of your time? The Poverty of Time A lack of time to do anything but work, commute to work, handle family situations, do housework, shop, eat, sleep...
3-19
Component Lifestyles The practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle.
3-20
Role of Families & Women Over 25% of all females are in the workforce Rising purchasing power from dualincome families Change of “traditional” purchasing roles 3-21
Demographic Factors
Demographics
Age
Ethnicity Location
3-22
Generation Y: Born to Shop Born between 1981 and 1994 Size creates immense marketing impact Influenced by changing demographics and technology Respond to ads differently www.ufone.com
3-23
Generation X Born between 1973 and 1983 First generation of latchkey children Indulge themselves with expensive meals/ drinks, clothing, and electronics & gadgets
3-24
Drivers of Change in the Banking Industry In the 21st Century there will be a lot of banking but there will be no banks Bill Gates
The pervasive impact of technology, combined with Changing social patterns; and Economic and political pressures. 3-25
Technology has changed the traditional banking playing field
3-26
The impact of changing social patterns Changes to consumer needs are changing their expectations from banks as consumers are becoming more financially aware and active in decision making concerning with wealth management. – Expectations are: • Banking should be easy, convenient and fun • That Bankers should actually smile.
3-27
Future Banking
3-28
Baby Boomers: A Mass Market Born between 1946 and 1964 Cherish youth, convenience, and individuality Individualism has led to a personalized economy
3-29
Personalized Economy
Delivering goods and services at a good value on demand.
3-30
Product Characteristics in a Personalized Economy
Customization Immediacy Value
Products are custom designed and marketed to small target markets Products are delivered at the consumer’s convenience Businesses must price competitively or create innovative products 3-31
Older Consumers: Not Just Grandparents
Age “50 plus”
Healthier, wealthier, better educated
Considerable purchasing power
Market potential not fully tapped
3-32
Growing Ethnic Markets
Pakistan population (especially in Karachi) is becoming a multicultural society and workforce
3-33
Multiculturalism
When all major ethnic groups in an area-such as a city, county, or census tract--are roughly represented.
3-34
Multicultural Marketing Marketing Strategy for Multicultural Markets Stitching Niches
Ethnic Age Income Lifestyle
3-35
Stitching Niches A strategy for multicultural marketing that combines ethnic, age, income, and lifestyle markets, on some common basis, to form a large market.
3-36
Economic Factors
Economic Areas of Concern to Marketers Distribution of Consumer Income
Recession Inflation
3-37
Inflation
Prices rise with no wage increase Purchasing Power decreases
Increase profit margins by increasing efficiency
Consumers reaction: Search for lowest prices – Rely on coupons and sales –
3-38
Recession
Income, production and employment fall
Reduced demand for goods and services
3-39
Recession Marketing Strategies Improve existing products Introduce new products Maintain customer services Emphasize top-of-the line products
3-40
Basic Research
Pure research that aims to confirm an existing theory or to learn more about a concept phenomenon.
3-41
Applied Research
An attempt to develop new or improved products.
3-42
Technological & Resource Factors
New technology helps firm cope with other environmental factors
Internet has created new challenges
Internet has helped marketers operate more efficiently through better communications
3-43
Political and Legal Factors Laws and Regulations Protect Businesses
Consumers
Society
Government
3-44
Legal and Regulatory Agencies
Competition Bureau (Bill C-2) 1986
Quebec’s Bill 101 (provincial)
The Canadian Code of Advertising Standards
The Canadian Broadcasting Association
The Canadian Direct Marketing Association
3-45
Competitive Factors
How many competitors?
Control
How big are competitors? How interdependent is industry?
3-46
Global Competition More foreign firms are entering market Foreign firms now compete on product quality Global markets are highly competitive NAFTA - Free trade agreement with U.S and Mexico 3-47
Corporate Social Responsibility Philanthropic Be a good citizen. Ethical Do what is right. Legal Obey the Law. Economic Be profitable. 3-48
3-1
Target Market
A defined group most likely to buy a firm’s product.
3-2
Understanding the External Environment “Environmental Scanning” By collecting and evaluating environmental information marketers can identify future marketing opportunities and threats
3-3
External Marketing Environment External Environment is not controllable
Social Change
Ever-Changing Marketplace
Demographics
Economic Conditions
Product Distribution Promotion Price Competition
Target Market Political & Legal Factors
Environmental Scanning
Technology
3-4
External Marketing Environment Social Demographic Economic External Environmental Factors
Technologic Political and Legal Competitive 3-5
Environmental Management When a company implements strategies that attempt to shape the external environment with which it operates
3-6
Social Factors Social Factors
Values
Lifestyle Attitudes
3-7
3-8
Attitude
3-9
3-10
3-11
3-12
Lifestyle
3-13
Healthy Lifestyle
3-14
Marketing Oriented Values Cultural Creativity
Today’s MarketingOriented Values
Traditionalism
Modernism
3-15
VS
3-16
Marketing-Oriented Values
Cultural Creativity Traditionalism Modernism
Interested in new products and services “Heartlanders” with nostalgic views Place high value on success, materialism, technology
3-17
The Scarce Commodity
3-18
Is work consuming a huge portion of your time? The Poverty of Time A lack of time to do anything but work, commute to work, handle family situations, do housework, shop, eat, sleep...
3-19
Component Lifestyles The practice of choosing goods and services that meet one’s diverse needs and interests rather than conforming to a single, traditional lifestyle.
3-20
Role of Families & Women Over 25% of all females are in the workforce Rising purchasing power from dualincome families Change of “traditional” purchasing roles 3-21
Demographic Factors
Demographics
Age
Ethnicity Location
3-22
Generation Y: Born to Shop Born between 1981 and 1994 Size creates immense marketing impact Influenced by changing demographics and technology Respond to ads differently www.ufone.com
3-23
Generation X Born between 1973 and 1983 First generation of latchkey children Indulge themselves with expensive meals/ drinks, clothing, and electronics & gadgets
3-24
Drivers of Change in the Banking Industry In the 21st Century there will be a lot of banking but there will be no banks Bill Gates
The pervasive impact of technology, combined with Changing social patterns; and Economic and political pressures. 3-25
Technology has changed the traditional banking playing field
3-26
The impact of changing social patterns Changes to consumer needs are changing their expectations from banks as consumers are becoming more financially aware and active in decision making concerning with wealth management. – Expectations are: • Banking should be easy, convenient and fun • That Bankers should actually smile.
3-27
Future Banking
3-28
Baby Boomers: A Mass Market Born between 1946 and 1964 Cherish youth, convenience, and individuality Individualism has led to a personalized economy
3-29
Personalized Economy
Delivering goods and services at a good value on demand.
3-30
Product Characteristics in a Personalized Economy
Customization Immediacy Value
Products are custom designed and marketed to small target markets Products are delivered at the consumer’s convenience Businesses must price competitively or create innovative products 3-31
Older Consumers: Not Just Grandparents
Age “50 plus”
Healthier, wealthier, better educated
Considerable purchasing power
Market potential not fully tapped
3-32
Growing Ethnic Markets
Pakistan population (especially in Karachi) is becoming a multicultural society and workforce
3-33
Multiculturalism
When all major ethnic groups in an area-such as a city, county, or census tract--are roughly represented.
3-34
Multicultural Marketing Marketing Strategy for Multicultural Markets Stitching Niches
Ethnic Age Income Lifestyle
3-35
Stitching Niches A strategy for multicultural marketing that combines ethnic, age, income, and lifestyle markets, on some common basis, to form a large market.
3-36
Economic Factors
Economic Areas of Concern to Marketers Distribution of Consumer Income
Recession Inflation
3-37
Inflation
Prices rise with no wage increase Purchasing Power decreases
Increase profit margins by increasing efficiency
Consumers reaction: Search for lowest prices – Rely on coupons and sales –
3-38
Recession
Income, production and employment fall
Reduced demand for goods and services
3-39
Recession Marketing Strategies Improve existing products Introduce new products Maintain customer services Emphasize top-of-the line products
3-40
Basic Research
Pure research that aims to confirm an existing theory or to learn more about a concept phenomenon.
3-41
Applied Research
An attempt to develop new or improved products.
3-42
Technological & Resource Factors
New technology helps firm cope with other environmental factors
Internet has created new challenges
Internet has helped marketers operate more efficiently through better communications
3-43
Political and Legal Factors Laws and Regulations Protect Businesses
Consumers
Society
Government
3-44
Legal and Regulatory Agencies
Competition Bureau (Bill C-2) 1986
Quebec’s Bill 101 (provincial)
The Canadian Code of Advertising Standards
The Canadian Broadcasting Association
The Canadian Direct Marketing Association
3-45
Competitive Factors
How many competitors?
Control
How big are competitors? How interdependent is industry?
3-46
Global Competition More foreign firms are entering market Foreign firms now compete on product quality Global markets are highly competitive NAFTA - Free trade agreement with U.S and Mexico 3-47
Corporate Social Responsibility Philanthropic Be a good citizen. Ethical Do what is right. Legal Obey the Law. Economic Be profitable. 3-48
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