Chapter 3: The Global Marketing Environment

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Transcript Chapter 3: The Global Marketing Environment

Chapter 5 Analyzing the Marketing Environment

The objectives Of this Chapter is to

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Describe the environmental forces that affect the company’s ability to serve its customers.

Explain how changes in the demographic and economic environments affect marketing decisions.

Identify the major trends in the firm’s natural and technological environments.

Explain the key changes in the political and cultural environments.

Discuss how companies can react to the marketing environment.

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Identifying and Responding to the Major Macroenvironment Forces

The substantial speedup of international transportation, Western Europe, Far East)

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communication, and financial transactions, leading to the rapid growth of world trade and investment, especially tripolar trade (North America, The movement of manufacturing capacity and skills to lower cost countries.

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The rising economic power of several Asian countries in world markets.

The rise of trade blocks such as the European Union and NAFTA signatories.

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Identifying and Responding to the Major Macroenvironment Forces

The severe debt problems of a number of countries, along with the increasing fragility of the international financial system.

The increasing use of barter and countertrade to support international transactions.

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The move toward market economies in formerly socialist countries along with rapid privatization of publicly owned companies.

The rapid dissemination of global lifestyles.

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The gradual opening of major new markets, namely China, India, eastern Europe, the Arab countries, and Latin America.

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Identifying and Responding to the Major Macroenvironment Forces

The increasing tendency of multinationals to transcend their firms.

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locational and national characteristics and become transnational The increasing number of cross-border corporate strategic alliances –for example, MCI and British Telecom, and Texas Instruments and Hitachi.

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The increasing ethnic and religious conflicts in certain countries and regions.

The growth of global brands in autos, food, clothing, electronics.

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Objectives

6 3 Tracking Trends & Identifying Opportunities in the Marketing Environments:

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Macroenvironment -- BIG Picture

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Microenvironment -- Closer-In

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Internal environment -- you & me

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THE MARKETING ENVIRONMENT

EXTERNAL ENVIRONMENT •

Marketing Environment

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Marketing:

We have discussed before the meaning of Marketing and we said that marketing is .

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Environment:

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What do we mean by the environment?

Marketing Environment

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Marketing Environment - consists of the actors and forces outside marketing that affect marketing management ’s ability to develop and maintain successful relationships with its target customers.

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Includes:

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Microenvironment - forces close to the company that affect its ability to serve its customers.

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Macroenvironment - larger societal forces that affect the whole microenvironment.

But, the Business World is like an Orange...

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… you’ve got to peel away a few layers to get to the good stuff!

Peeling the “Orange”

Demographic Economic Intermediaries Logistics Product Place Target Consumers Price Promotion Technological Natural 12 3 Political Legal Competitors

The Marketing Environment

The Microenvironment

The Company ’s Microenvironment

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Company ’s Internal Environment - functional areas such as top management, finance, and manufacturing, etc.

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Suppliers - provide the resources needed to produce goods and services and are an important link in the “value delivery system”.

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Marketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers.

The Company ’s Microenvironment

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Customers - five types of markets that purchase a company ’s goods and services.

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Competitors - those who serve a target market with similar products and services against whom a company must gain strategic advantage.

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Publics - any group that perceives itself having an interest in a company ’s ability to achieve its objectives.

Types of Customer Markets

Types of Publics

Financial i.e. Banks Media i.e. Newspapers Government i.e. Regulations Citizen-Action i.e. Consumer Groups Local i.e. Neighborhood Residents Copyright 2000 Prentice Hall س General Public Internal i.e. Employees 18 3

The Macroenvironment

The Company ’s Macroenvironment

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Demographic - studies populations in terms of age, gender, race, occupation, location and other statistics.

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Economic - factors that affect consumer purchasing power and spending patterns.

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Natural - natural resources needed as inputs by marketers or that are affected by marketing activities.

Key U.S. Demographic Trends

Changing Age Structure

Population is getting older

Changing Family Structure

Marrying later, fewer children, working women, and nonfamily households

Geographic Shifts

Moving to the Sunbelt and suburbs (MSA ’s)

Increased Education

Increased college attendance and white-collar workers

Growing Ethnic and Racial Diversity

Demographic Environment

Worldwide Population Growth Population Age Mix Ethnic Markets Educational Groups Household Patterns Geographical Shifts in Population Shift from Mass to Micromarkets

Economic Environment

Income Distribution

Subsistence economies Raw-material-exporting economies Industrializing economies Industrial economies

Inflation

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Prices rise with no wage increase Purchasing Power decreases

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Increase profit margins by increasing efficiency

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Consumers reaction:

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Search for lowest prices

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Recession

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Income, production and employment fall

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Recession Marketing Strategies

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Improve existing products

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Maintain customer services

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Introduce new products

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Natural Environment

The Company ’s Macroenvironment

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Technological - forces that create new technologies, creating new product and market opportunities.

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Political - laws, agencies and groups that influence and limit organizations and individuals in a given society.

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Cultural - institutions and other forces that affect a society ’s basic values, perceptions, preferences, and behaviors.

Technological Environment

Technological & Resource Factors

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New technology helps firm cope with other environmental factors

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New technology helps firm carrying out and easuapply of research

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Political Environment

Some Trends in the Political Environment Include: 32 3 Increasing Legislation Designed to Protect Groups Changing Government Agency Enforcement Increasing Emphasis on Ethics and Socially Responsible Actions Copyright 2000 Prentice Hall س

Political-Legal Environment

Regional Groupings European Union (EU) NAFTA

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Consumerism & SIG ’s MADD/SADD

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Ethics & Social Responsibility

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Increased Legislation & Enforcement

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Cultural Environment

Responding to the Marketing Environment

Environmental Management Perspective Taking a proactive approach to

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managing the microenvironment and the macroenvironment by taking aggressive (rather than passive) actions to affect the publics and forces in the marketing environment. How? Hire lobbyists , run

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“advertorials”, file law suits and complaints, and form agreements.

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Rest Stop: Reviewing the Concepts

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Describe the environmental forces that affect the company ’s ability to serve its customers.

Explain how changes in the demographic and economic environments affect marketing decisions.

Identify the major trends in the firm ’s natural and technological environments.

Explain the key changes in the political and cultural environments.

Discuss how companies can react to the marketing environment.