Topic 3 - Marketing Environment.pdf

Marketing Environment

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the attain ment of organizat ional obje ctives by predic ting and influencin g the five compone nts of the marketing environm ent

Competitive Environment r e li p p su le so e th is rm fi a t a th monopoly means e c la tp e rk a m e th in e ic rv se r of a good o s e i n a p m o c g u r d – y l o p o n o M y r a Tempor

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Time Based Competition l  strategy of developing and distributing products more quickly than competitors l  The flexibility and responsiveness of timebased competitors enables them to improve product quality, reduce costs, and expand product offerings

Types of Competition s t c u d o r p r a l i m i s – Direct

Indirect - s

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MACROENVI RONMENT forces and tr ends that shape oppor tunities and pose threats . UNCONTROL LABLE

POLITICAL ENVIRONEMNT

l laws and their interpretations that

require firms to operate under competitive conditions and to protect consumer rights. l Ignorance or non-compliance can result in fines, negative publicity and civil damage suits

l health of the economy influences how much consumers spend and what they buy – vice versa l  (GDP) is the sum of all goods and services produced by a nation in a year uying b r e m u s n o c e c n e u fl in t a made up of factors th f o e g ta s e th g in d lu c in , s tegie a tr s g n ti e rk a m d n a r e w o p , n o ti a fl e d d n a n o ti a fl in the business cycle, ity il b a il a v a e rc u o s re d n a , e unemployment, incom

l  During pe riods of pros perity, consu maintains a mer spendin brisk pace an g d buyers are more for prem willing to spe ium versions nd of well-know l  During tim n brands es of recessi on, consume emphasize b r spending p asic, functio atterns nal products l  Consume with low pric r spending si e tags n k s t o its lowest lev depression el during a l  In period s of recover y , purchasing consumers r power increa emain cautio ses, but us—business profits while es have to ea tr ying to gau rn ge uncer tain so many cop consumer de e by tr ying to mand, reduce costs

Stages in Business Lifecycle

f o d o i r e p a g – n i n l l o i a t f a l – f n n I Deflatio s e c i r p g ripsriinces Causes: ices rv e s d n a s d o o g r fo d n a m e l Excess d Is it nts e a n o lw p m a o c y , s ls a g ri o te o a d m ? w ra l Rising prices in parts, or human resources

g in r u d e t a r le e c c a o , lower investment InflaCtaion ndetcerenadses ptro fits d n a . s s n ff o io y s la n b a jo p x d a e re ic p s m e o id econreturns, and bring w s n io s s e c e r g in r u d e t decelera

r io v a h e b r e m u s n o c r alte Unemployment tends to economic recovery and fall during rise during recessions

o h w y m o n o c e e h t n i e l p o e s p b f o j o e n v o i a t h r t o o n o d t u the prop b k r o w g n i k e e s y l e v i t c a e r a

Basis for determining market potential

influence consumer behavior

Discretionar y income

bility Resource Av aila

l Resources are limited a nd shor tages require mark eters to reori ent their thinking l Demarketi ng is the pro cess of reduc consumer de ing mand for a p roduct to a le that the firm vel can reasona bly supply l A shor tage requires that firms allocat limited supp e lies, deciding whether to spread them over all custo mers or limit purchases b y some custo mers so that firm can com the pletely satisf y others

s e t a r e g n a h c x e y c n e r r u c n g i e r o f n i s n o i Changes s i c e d g n i t e k r a m also af fect

t n a c i f i n g i s a p u e k a m s e l a s l a n o s m r i f y n a internati m r o f s e l a s l a t o t f o n o i por t

f o g n i t e k r a m o t n o i t a c i pl , p e a c e n h e t i c s t s n n e si e i r e v Repres o c s i d n o d e s a b e g knowled s n o i t a v o n n i d n a , s n o i t n e inv l  Techno logy can le ad to new l  It can im goods and prove exist ser vices ing produc l  It can re ts and cus duce price tomer ser v s through n distributio ice ew produc n methods tion and l  It can r apidly mak e existing p l  It can h roducts ob elp addres solete s social co ncerns

refers to the relation ship between the marketer and society and culture e b t s u m s r e t e k r a s t m f i , h e s v i c t i i t h e p p a r g om o c m n i e a d To rem to society’s e v i t i s s e n u l se a v g n i g n a h c d n a

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n o i t a c u d e e u l a v Asians

According to United Nations, many East Asian countries have experienced a decline in their Total Fertility Rates in the past 50 years. In the period of 1965-1970, the average family had five or more children. From 2005 to 2010, the average shifted to below 2.1 children per family.

What is the implication?

Cultural Diversity

Marketers m ust understa nd and respond to cultural dif ferences

M S I R E M U S N CO a social force within the environment that aids and protects the consumer by exerting legal, moral, and economic pressures on business and government refully a c sm vi ti c a r e m su n o c g n have witnessed increasi jectives b o t fi ro p d n a s d n a m e d r e weigh consum

N I S E U S S I L ETHICA G N I T E K R A M

l Because m arketing is cl osely connec various publ ted with ic issues, it i nvites consta the public nt scrutiny by l Marketing operates out side the firm that environm —it reacts to ent and, in tu rn, is acted u environment pon by al influences l The divers e social issu es faced by m be divided in arketers can to two major categories: l Marketing ethics l Social resp onsibility

Marketing Ethics l  ETHICS refers to matters of right and wrong: the responsibility of the individual and the firm to do what is morally right l  MARKETING ETHICS refers specifically to marketers’ standards of conduct and moral values l  Ensuring ethical practices means promising customers and business partners not to sacrifice quality and fairness for profit

Ethical Issue s: MARKET RESEARCH

l Invasion of personal priv acy l the promis e of cash rew ards or free of fers in retu rn for inform ation that can then be sold to direc t marketers l Privacy rem ains the num ber issues in online sho pping

Ethical Issue s: PRODUCT

l product qu ality, planne d obsolescen brand simila ce, rity, and pac kaging l Competitiv e pressures h ave of ten for some marke ced ters into pac kaging pract that may be ices considered m isleading, deceptive, or unethical

Ethical Issue s: PLACE

l Exclusive t erritor y l Dumping l Predator y Competition

Ethical Issue s: PROMOTIO N

l Criticism o n Personal S elling l Deceptive/ False Adver t ising – truth is the b edrock in Adver tising E thics l Marketing to children

Ethical Issue s: PRICING

l Pricing is p robably the m ost regulated as pect of a firm ’s marketing st rategy l Deceptive pricing l Do market ers have an o bligation to warn consum ers of impen ding price changes?

SOCIAL RESPONSIBILITY weight to

l ed to cover a u q e e v i g o has expand eing in t n o i t a g i l b o b y t n l i l l a i e t b w i p s l e n a c i o c c maTrkoedtaeyr,scaorporeartesarteisspfactiono,rakn–ddsoomestic and w e m u m s a n r f o l c a , protfhites entire socfiiertm’s per formance r i e h t g n i t a evailnuternational

Government Regulation and Consumer ariskm AM ctiv etperosmmouteststohcin k o ia f ll lo y r e spnogn-stib e rlem aecftio n s fects of their d

ecisions - HOW?

How can marketers be

SOCIAL RESPONSIBLE G N I T E K R A M E S U A C Socially responsible ma rketing campaigns can b e used to encourage people to ad opt socially beneficial b ehaviors— such as conser ving energ y or protecting the envir onment

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d n a s m s i n a g r o f o p i g h n i s t n e o k i r t a a l m e r ( e c y n g e o l u l o f c n i E – ) t n e m n o r i v n e l a r u nat Environmental Protectio planned obsolesence n and Pollution, e th h it w ls a e d g n ti e rk a Green M f o n o ti a m la c re d n a , n o ti production, promo 0’s) (9 ts c u d ro p e iv it s n e s y ll environmenta