Transcript Marketing - 8th Canadian Edition

Scanning the Marketing
Environment
© 2011 McGraw-Hill Ryerson Ltd. All rights reserved.
Learning Objectives
After reading this chapter, you should be able to:
1. Explain how environmental scanning provides information about social,
economic, technological, competitive, and regulatory forces.
2. Describe how social forces, such as demographics, and culture and economic
forces, such as macroeconomic conditions and consumer income, affect
marketing.
3. Describe how technological changes are impacting marketers and customers.
4. Discuss the forms of competition that exist in a market, key components of
competition, and the impact of small businesses as competitors.
5. Explain the major legislation that ensures competition and protects consumers
in Canada.
© 2011 McGraw-Hill Ryerson Ltd. All rights reserved.
THE IMPORTANCE OF ENVIRONMENTAL
SCANNING
‣ What are the most important changes in the
business world?
‣ How do these affect them and us?
‣ What are the implication of these changes?
‣ How do businesses react to them?
ENVIRONMENTAL SCANNING
‣ Environmental
Scanning (Tracking
Environmental
Trends):
‣ Is the process of
‣ What does it involve?
‣ Identify the trends
 What are the trends?
 What types of business are affected by the
trend?
 What kind of changes are expected or
predicted?
continually acquiring
‣ Explain the trends
information on events
 Why does it happen?
occurring outside the
organization to identify  What are the causes?
 How does it impact?
and interpret potential
trends.
Environmental scanning
‣For many years Gerber has
manufactured baby food in small,
single-serving containers. In
conducting an environmental scan,
‣ identify three trends or factors which
might significantly affect this company's
future business
‣ propose how Gerber might respond to
these changes.
Environmental scanning
‣Car business:
‣ Describe the new features you would add
to an automobile designed for an aging
baby boomer.
‣ Where would you advertise to appeal to
this target market?
THE IMPORTANCE OF ENVIRONMENTAL
SCANNING
‣ Tracking Environmental Trends
‣ An Environmental Scan of Canada
© 2011 McGraw-Hill Ryerson Ltd. All rights reserved.
LO 1
Stat Canada -Census 2011
‣ Census 2011: Families and households:
‣ Census shows new face of the Canadian family Map
‣ Foster children counted in Canadian census for 1st time
‣ Same-sex couples tied the knot in droves
‣ Census finds single dads head rise in lone-parent families
‣ Stepfamilies make up 12.6% of Canadian families
SOCIAL FORCES
‣ Demographics
‣ The World
Population at a
Glance
‣ The Canadian
Population
‣ Generational
Cohorts
‣ Baby boomers
‣ Generation X
‣ Generation Y
© 2011 McGraw-Hill Ryerson Ltd. All rights reserved.
LO 2
Generation Cohort: Generations Compared
‣ BABY BOOMERS - THE GENERATION OF CHILDREN BORN
BETWEEN 1946 AND 1964 - ARE GROWING UP. MARKETERS HAVE
CAPITALIZED ON THIS TREND BY DEVELOPING PRODUCTS AND
SERVICES FOR THIS AGE GROUP.
‣ GENERATION X - PERSONS BORN BETWEEN 1965 AND 1976. IT
IS A GENERATION OF CONSUMERS WHO ARE SELF-RELIANT,
ENTREPRENEURIAL, SUPPORTIVE OF DIVERSITY, BETTER
EDUCATED, NOT PRONE TO EXTRAVAGANCE AND ARE LIKELY TO
PURSUE LIFESTYLES AND PREFER PRODUCTS THAT ARE VERY
DIFFERENT FROM BABY BOOMERS.
‣ THE GENERATION Y REFERS TO THE GENERATION BORN
BETWEEN 1977 AND 1994 AND HAS BEEN CALLED GENERATION Y
OR THE NET GENERATION .
SOCIAL FORCES
‣ The Canadian Family
‣ Blended family
‣ Population Shifts
‣ Census metropolitan areas (CMA’s)
‣ Ethnic Diversity
‣ Ethnic marketing
‣ Culture
‣ Changing Attitudes and Values
‣ Time poverty
‣ Value consciousness
‣ Eco-consciousness
Economic Forces
‣ The Economy – Income, expenditure, resources that
affect businesses
‣ Macroeconomic Conditions
‣ Inflationary or recessionary?
‣ Consumer Income
‣ Gross Income
‣ Disposable Income – money after paying tax
‣ Discretionary Income – money after paying taxes and
necessities
Technological Forces
‣ Technology’s Impact on
Customers
‣ Electronic Commerce
‣ Twitter
‣ Blogs
‣ Consumer-generated
content (CGC)
‣ Consumer-to-consumer
(C2C)
‣ Customer-to-business (C2B)
© 2011 McGraw-Hill Ryerson Ltd. All rights reserved.
LO 3
Competitive Forces
‣ Alternate Forms of Competition:
‣ IN PURE COMPETITION, EVERY COMPANY HAS A SIMILAR
PRODUCT.
‣ IN MONOPOLISTIC COMPETITION, MANY SELLERS COMPETE
WITH THEIR PRODUCTS ON A SUBSTITUTABLE BASIS.
‣ OLIGOPOLY OCCURS WHEN A FEW COMPANIES CONTROL THE
MAJORITY OF INDUSTRY SALES.
‣ MONOPOLY OCCURS WHEN ONLY ONE FIRM SELLS THE
PRODUCT.
Competitive Forces
‣ Components of Competition: THREE FORCES DRIVE
INDUSTRY COMPETITION
‣ 1. ENTRY. ENTRY REFERS TO THE LIKELIHOOD OF NEW
COMPETITORS. BARRIERS TO ENTRY ARE BUSINESS PRACTICES OR
CONDITIONS THAT MAKE IT DIFFICULT FOR NEW FIRMS TO ENTER
THE MARKET.
‣ 2. POWER OF BUYERS AND SUPPLIERS. POWERFUL BUYERS EXIST
WHEN THEY ARE FEW IN NUMBER OR THERE ARE LOW SWITCHING
COSTS. SUPPLIERS GAIN POWER WHEN THE PRODUCT IS CRITICAL
TO THE BUYER OR THERE ARE HIGH SWITCHING COSTS.
‣ 3. EXISTING COMPETITORS AND SUBSTITUTES. INDUSTRY
GROWTH AND FIXED COSTS INFLUENCE COMPETITIVE PRESSURES.
‣ Small Business as Competitors
‣ Pure-Play Online Competitors
Regulatory Forces
‣ Protecting Competition and Consumers
‣ The Competition Act: THE MOST IMPORTANT LEGISLATION
DESIGNED TO PROTECT COMPETITION AND CONSUMERS IN
CANADA.
‣ Self-Regulation: ALTERNATIVE TO LEGISLATION PROTECTING
COMPETITION AND CONSUMERS
‣ Consumerism: A MOVEMENT TO INCREASE THE INFLUENCE,
POWER, AND RIGHTS OF CONSUMERS IN DEALING WITH
INSTITUTIONS.
FIGURE 3-4 Major federal legislation designed to protect
competition and consumers
© 2011 McGraw-Hill Ryerson Ltd. All rights reserved.
LO 5