CHAPTER FOUR

Evaluating Opportunities in the Changing Marketing Environment

CHAPTER FOUR

Evaluating Opportunities in the Changing Marketing Environment

When we finish this lecture you should

1. Know the variables that shape the environment of marketing strategy planning.

2. Understand why company objectives are important in guiding marketing strategy planning.

3. See how the resources of a firm affect the search for opportunities.

4. Know how the different kinds of competitive situations affect strategy planning.

5. Understand how the economic and technological environment can affect strategy planning.

6. Know why you might be sent to prison if you ignore the political and legal environment.

7. Understand how to screen and evaluate marketing strategy opportunities.

When we finish this lecture you should

Resourcesand Objectives

of the Firm

CompetitiveEnvironment

The Marketing Environment

Cultural andSocial

Environment

EconomicEnvironment

TechnologicalEnvironment

Political andLegal Environment

External Marketing Environment

Direct Marketing Environment

Socially and Economically

Useful Function

Socially and Economically

Useful Function

Socially and Economically

Useful Function

Socially and Economically

Useful Function

Develop an OrganizationDevelop an

OrganizationDevelop an

OrganizationDevelop an

Organization

Earn ProfitEarn Profit

Objectives Should Set Firm’s Course

ThreeBasic Objectives

ProvideGuidelines

ThreeBasic Objectives

ProvideGuidelines

Company Objectives

Company Objectives

Production Objectives

Production Objectives

Finance Objectives

Finance Objectives

Marketing Objectives

Marketing Objectives

HR Objectives

HR Objectives

R&D Objectives

R&D Objectives

Mission Statement and Objectives

MissionStatementMission

Statement

Product Objectives

Product Objectives

Place Objectives

Place Objectives

Price Objectives

Price Objectives

Production Objectives

Production Objectives

Finance Objectives

Finance Objectives

HR Objectives

HR Objectives

R&D Objectives

R&D Objectives

Promotion Objectives

Promotion Objectives

Personal Selling Objectives

Personal Selling Objectives

Mass Selling Objectives

Mass Selling Objectives

Sales Promotion Objectives

Sales Promotion Objectives

Financial StrengthFinancial Strength

Producing Capability and Flexibility

Producing Capability and Flexibility

Financial StrengthFinancial Strength

Producing Capability and Flexibility

Producing Capability and Flexibility

Company Resources May Limit Search for Opportunities

Marketing StrengthsMarketing Strengths

Marketing Strengths

MonopolyMonopoly Monopolistic CompetitionMonopolistic Competition OligopolyOligopolyMonopolyMonopoly Monopolistic CompetitionMonopolistic Competition OligopolyOligopoly

The Competitive Environment

Avoid Head-On Competition!Avoid Head-On Competition!

Know the Market Situation!Know the Market Situation!

Pure Competition

Pure Competition

Monopolistic Competition

Competitive Advantage

Competitive Advantage

Competitive Rivals

Competitive Rivals

Competitor Analysis

Competitor Analysis

KeyConcepts

KeyConcepts

Competitive Rivals

Competitive Rivals

Competitive Advantage

Competitive Advantage

Competitor Analysis

Competitor Analysis

Analyzing Competition

Competitive Barriers

Competitive Barriers

Seek Information About Competitors

Seek Information About Competitors

Ethical IssuesEthical Issues

Competition May Vary From Country To Country

Competition May Vary From Country To Country

Seek Information About Competitors

Seek Information About Competitors

Ethical IssuesEthical Issues

Competition May Vary From Country To Country

Competition May Vary From Country To Country

Direct Competition Can’t Always Be Avoided

Direct Competition Can’t Always Be Avoided

Marketers Need Information About Competitors

The Economic Environment

Global EconomyGlobal Economy

KeyEconomic

Forces

KeyEconomic

Forces

Rapid ChangeRapid Change

Interest RatesInterest Rates

Rapid ChangeRapid Change

Interest RatesInterest Rates

The Technological Environment

Regional Economic Groupings

Regional Economic Groupings

NationalismNationalismNationalismNationalismRegional Economic Groupings

Regional Economic Groupings

The Political Environment

ConsumerismConsumerism

Characteristicsof the PoliticalEnvironment

Characteristicsof the PoliticalEnvironment

The Legal EnvironmentExhibit 4-3

Consumer ProtectionExhibit 4-4

““Let the Seller Beware”Let the Seller Beware”

The Cultural and Social Environment

Do

llars

Years

0 1 2 3 4 5

Product A

Years

0 1 2 3 4 5

Product B

Using Screening Criteria to Narrow Down to Strategies

Total cost

Sales

Total cost

Sales

Planning Grids Help Evaluate a Portfolio of Opportunities

Bu

sin

ess

Str

eng

th

Industry AttractivenessH

igh

Me

diu

mL

ow

High Medium Low

No Growth

Borderline

Growth

Multiproduct Firms Have a Difficult Strategy Planning Job

Evaluating Opportunities in International MarketsExhibit 4-8

Insensitive Sensitive

Industrialproducts

Basiccommodity-typeconsumerproducts

Consumerproducts thatare linked toculturalvariables

• Mission statement

• Competitive environment

• Competitor analysis

• Competitive rivals

• Competitive barriers

• Economic and technological environment

• Technology

• Internet

• Nationalism

• North American Free Trade Agreement (NAFTA)

• Consumerism

• Cultural and social environment

• Strategic business unit (SBU)

• Portfolio management

Key Terms