March 15, 2010

The Dynamic Marketing

Environment

Levels of External Forces

Macro Level

Influences that affect all firms

Micro Level

Influences that affect a particular firm

External Macroenvironment Forces

Demographics

People MakeMarkets

People MakeMarkets

DistributionDistribution GrowthGrowth

SizeSize

Characteristics of Populations

Characteristics of Populations

Megatrends Shaping the Consumer Landscape

• Delayed retirement• Changing nature of work• Greater educational attainment• Skill Labor shortages

• Increased migration• Shifting birth trends• Widening geographic differences• Changing age structure

Economic Factors

People withMoney to Spend

and Willing toSpend it

People withMoney to Spend

and Willing toSpend it

InflationInflationInterest Rates

Interest Rates

Stage of the Business

Cycle

Stage of the Business

Cycle

Types of Industrial Structures

Industrialeconomies

Subsistenceeconomies

Raw-material-exporting

economies

Industrializingeconomies

India – An Industrializing Economy

Saudi Arabia – A Raw-Material Exporting Economy

Competition

Rivals for Customers’

Limited Buying Power

Rivals for Customers’

Limited Buying Power Substitute

ProductsSubstitute Products

Every Company

Every Company

BrandCompetition

BrandCompetition

Differential AdvantageDifferential Advantage

Social and Cultural Forces

People MakeMarkets

People MakeMarkets

BeliefsBeliefs

Socio-culturalPatterns

Changing Quickly

Socio-culturalPatterns

Changing Quickly

ValuesValuesLifestylesLifestyles

Social and Cultural Changes

Concern for Natural Environment

Concern for Natural Environment

Quality notQuantity

Quality notQuantity

Changing Gender RolesChanging Gender Roles Two Incomesand Balance

Two Incomesand Balance

Physical Fitness andHealth

Physical Fitness andHealth Exercise and DietExercise and Diet

Premium on TimePremium on Time ConvenienceConvenience

Schwab’s Chinese-language Web site

Political and Legal Forces

Monetary and

Fiscal Policies

Monetary and

Fiscal Policies

GovernmentalRelationship

with Industries

GovernmentalRelationship

with Industries

Social Legislationand

Regulation

Social Legislationand

Regulation

Legislation Related

toMarketing

Legislation Related

toMarketing

Legislation Affecting Marketing

• Competition Act• Sales of Goods Act• Unfair Trade

Practices Acts

• Trademark and Merchandise Act

• Various deregulation laws pertaining to specific industries

Regulate Competition

Legislation Affecting Marketing

• Food and Drug Act• Packaging and Labeling Act• Cigarette Labeling and

Advertising Acts

• Consumer Protection Act• Media related regulations

Protect Consumers

Natural Environment

Shortage of raw materials

Increasedenergy costsAnti-pollution

pressuresGovernmental

protections

Technology

Affects HowMarketing isCarried Out

Affects HowMarketing isCarried Out

Altering Existing

Industries

Altering Existing

Industries

Impacts lifestyles, consumption patterns,

economic well-being

Impacts lifestyles, consumption patterns,

economic well-being

StartingNew

Industries

StartingNew

Industries

StimulatesMarkets

and Other Industries

StimulatesMarkets

and Other Industries

External Microenvironment

Internal Environment

Operating Environment