The Marketing The Marketing EnvironmentEnvironment

Chapter 4Chapter 4

Environmental ScanningEnvironmental Scanning

What is What is environmental environmental scanning?scanning? ““The process of The process of

continually acquiring continually acquiring information on events information on events occurring outside the occurring outside the organization.”organization.”

Why is it important? Why is it important?

Environmental ForcesEnvironmental Forces

SocialSocial EconomicEconomic TechnologicalTechnological Regulatory Regulatory CompetitiveCompetitive

Social ForcesSocial Forces

CultureCulture ValuesValues AttitudesAttitudes

DemographicsDemographics Who is in the population and what is Who is in the population and what is

important to them?important to them?

Culture & ValuesCulture & Values

What Values are What Values are Important to Important to Americans?Americans?

Changing Role of Changing Role of WomenWomen

Working Longer Working Longer HoursHours

Source: http://www.techistan.com

The Mature HouseholdThe Mature Household

Born before 1945Born before 1945 23% of the population23% of the population

75% of country’s wealth75% of country’s wealth Healthcare is important issue Healthcare is important issue Cautious consumersCautious consumers

Baby BoomersBaby Boomers Born between 1946-Born between 1946-

19641964

Largest group in Largest group in populationpopulation 75 million75 million

Want to age gracefullyWant to age gracefully Rise in cosmetic/health Rise in cosmetic/health

productsproducts

More brand loyal than More brand loyal than younger groupsyounger groups

Source: http://www.richprice.com

Generation X

Born between 1965-1980

17 million in U.S. One parent households “A lost generation” “Cut teeth” on

technology Value religion, rituals,

materialism “Global teens”: Similar

experiences across national boundaries

Source: http://banana1015.com

Generation YGeneration Y

Born after 1976Born after 1976 28% of the 28% of the

populationpopulation Grew up with Grew up with

technologytechnology Sons and daughters Sons and daughters

of Baby Boomersof Baby Boomers Politically activePolitically active

Less racially Less racially sensitivesensitive

Source: http://teachers.net

TweensTweens

Be“tween” being a Be“tween” being a child and a child and a teenagerteenager

Ages 8-12Ages 8-12 $200 billion $200 billion

annuallyannually Brand consciousBrand conscious

But not necessarily But not necessarily brand loyal brand loyal

Source: www.billbord.com

Hispanics Buying PatternsHispanics Buying Patterns

Purchasing power: $1.4 trillionPurchasing power: $1.4 trillion Unity through languageUnity through language Brand loyalBrand loyal Influenced by families and Influenced by families and

peerspeers Also influenced by advertisingAlso influenced by advertising Highly conservativeHighly conservative Common religionCommon religion Opinion leadersOpinion leaders

DifficultiesDifficulties Differing backgroundsDiffering backgrounds Language barrierLanguage barrier

African-Americans Buying African-Americans Buying PatternsPatterns

12% of population12% of population Purchasing power: $1.2 Purchasing power: $1.2

trilliontrillion Lower annual income Lower annual income

than whitesthan whites ““Younger” subcultureYounger” subculture Technological focusTechnological focus Increasing media Increasing media

presencepresence Price consciousPrice conscious Unique buying patternsUnique buying patterns

Source: http://www.thevalueengineers.com

Asian Buying PatternsAsian Buying Patterns

Highly educatedHighly educated Strong family tiesStrong family ties Hard workingHard working Hesitant to use creditHesitant to use credit

Economic ForcesEconomic Forces

““Deals with the income, Deals with the income, expenditures, and resources that expenditures, and resources that affect the cost of running a business affect the cost of running a business or household”or household” MacroeconomicMacroeconomic MicroeconomicMicroeconomic

Macroeconomic ForcesMacroeconomic Forces

Deals with entire Deals with entire market- aggregate of market- aggregate of all “players” within it.all “players” within it. If consumers feel they If consumers feel they

will be better off, they will be better off, they will buy more.will buy more.

If consumers feel they If consumers feel they will be worse off, they will be worse off, they will opt to save money will opt to save money or be hesitant to spend or be hesitant to spend it.it.

Source: http://www.bookbyte.com

Microeconomic ForcesMicroeconomic Forces

Gross incomeGross income Total amount of money Total amount of money

earned annually by an earned annually by an individualindividual

Disposable IncomeDisposable Income Money remaining after Money remaining after

paying taxespaying taxes Discretionary IncomeDiscretionary Income

Money remaining after Money remaining after paying taxes and for paying taxes and for necessitiesnecessities

Source: http://www.principlesofmicroeconomics.net

Technological ForcesTechnological Forces

Becoming increasingly importantBecoming increasingly important As technology becomes more As technology becomes more

commonplace, prices fall.commonplace, prices fall. Designs new products or improves Designs new products or improves

existing onesexisting ones Improves systems and flow of informationImproves systems and flow of information

InternetInternet IntranetIntranet ExtranetExtranet

Competitive ForcesCompetitive Forces

““Alternative firms that could provide Alternative firms that could provide a product to satisfy a specific a product to satisfy a specific market’s need”market’s need” Perfect competitionPerfect competition MonopolyMonopoly OligopolyOligopoly Monopolistic competitionMonopolistic competition

Competitive ForcesCompetitive Forces

Porter’s ModelPorter’s Model Barriers to EntryBarriers to Entry Buyer PowerBuyer Power Supplier PowerSupplier Power Degree of RivalryDegree of Rivalry SubstitutesSubstitutes

Source: http://notesdesk.com/notes/strategy/porters-five-forces-model-porters-model/

Regulatory ForcesRegulatory Forces

““Restrictions state and federal laws place Restrictions state and federal laws place on business with regard to the conduct of on business with regard to the conduct of its activities.”its activities.”

Protect customers & companiesProtect customers & companies Regulatory agenciesRegulatory agencies

Consumer Product Safety CommissionConsumer Product Safety Commission Food & Drug AdministrationFood & Drug Administration Federal Trade CommissionFederal Trade Commission

Regulatory ForcesRegulatory Forces

Place-Related LegislationPlace-Related Legislation Exclusive dealingExclusive dealing Requirement contractsRequirement contracts Exclusive territorial distributorshipsExclusive territorial distributorships Tying arrangementTying arrangement

Promotion-Related LegislationPromotion-Related Legislation Federal Trade CommissionFederal Trade Commission