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Transcript of Armstrong Ch04 Express
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Copyright 2007 Pearson Education Canada4-1
Marketing: An IntroductionSecond Canadian Edition
Armstrong, Kotler, Cunningham, Mitchell and Buchwitz
Chapter Four
The Marketing Environment
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Copyright 2007 Pearson Education Canada4-2
Looking Ahead Describe the environmental forces that affect
the companys ability to serve its customers.
Explain how changes in the demographic and
economic environments affect marketingdecisions.
Identify the major trends in the firms naturaland technological environments.
Explain the key changes in the political andcultural environments.
Discuss how companies can react to themarketing environment.
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Marketing EnvironmentDefined
The factors and forces outside
marketings direct control that affectmarketing managements ability to
develop and maintain successful
transactions with target customers.
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Microenvironment.
Actors close to the company that affect its
ability to serve its customers. Unique to the company.
Macroenvironment.
Larger societal forces that affect themicroenvironment.
Considered to be beyond the control of theorganization.
Marketing Environment
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The Microenvironment
Factors that are unique to the companyand that the company can influence.
Company. Suppliers.
Marketing intermediaries.
Customers.
Competitors.
Publics.
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The Company
Companys internal environment.
Areas insidea company.
Affects the marketing departmentsplanning strategies.
All departments must think consumer and
work together to provide superior customer
value and satisfaction.
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Provide resources needed to producegoods and services.
Important link in the value deliverysystem.
Most marketers treat suppliers like
partners.
Suppliers
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Marketing Intermediaries
Help the company to promote, sell anddistribute its goods to final buyers.
Resellers. Physical distribution firms.
Marketing services agencies.
Financial intermediaries.
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Three types of customers.
Consumers who buy for personal use.
Business buyers who buy for the use of thecompany.
Government buyers who buy on behalf ofpublic services.
Customers
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Competitors
Those who serve a target market withproducts and services that are viewed by
consumers as being reasonablesubstitutes.
Company must gain strategic advantageagainst these organizations.
Company size and industry positiondetermines best competitive strategy.
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Publics
Group that has an interest in or impacton an organization's ability to achieve
its objectives. Financial publics.
Media publics.
Government publics.
Citizen action publics.
Local publics.
General publics.
Internal publics.
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The Macroenvironment
Factors that all companies in theindustry experience in common and that
are difficult to influence. Demographic environment.
Economic environment.
Natural forces. Technological force.
Political forces.
Cultural forces.
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Demographics
The study of human populations interms of size, density, location, age,gender, race, occupation and otherstatistics.
Marketers track changing age and familystructures, geographic population shifts,educational characteristics andpopulation diversity.
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Baby Boomers
9 million born between 1946 and 1964. Account for one-third of population. High amount of disposable income. Now moving into middle-age. Aging of boomers increases Canadas
average age.
Major influencer of demographic andsocioeconomic change. Prime target of consumer product
marketers.
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Changing Canadian Household
Common-law and long-parent familiesnow 30% up from 26%.
Number of divorced persons 13.5%higher in 2004 than in 2001.
As many households of one person as
four persons. Growth of same-sex couples 34,000
in 2001 census.
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Population Shifts
Canadas growth rate only 3% from 2001
to 2204.
Population of Saskatchewan andNewfoundland declined in last five years.
33% of Canadians live in CMAs of
Toronto, Montreal and Vancouver. City to suburb migration continues.
Increase in people who telecommute.
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Increasing Diversity
Canada is a salad bowl.
Various groups mixed together, each
retaining its ethnic and cultural differences. Diversity and multi-culturalism is valued.
Increased marketing to:
Gay and lesbian consumers. People with disabilities.
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Economic Environment
All those factors that affect consumerbuying power and spending patterns.
Income levels and distribution. The necessity of products.
Changes in trends and consumer spendingpatterns.
Economies of different nations.
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Economic Changes
Changes in income. 1980s consumption frenzy.
1990s squeezed consumer. 2000s value marketing.
Income distribution Upper class major market for luxury goods.
Middle class careful but has the good life. Working class sticks to the basics.
Underclass counts every penny first.
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Changing Spending Patterns
Food, clothing, housing and fuelspending dropping as a percentage of
total spending. Increased spending in:
Personal goods and services.
Recreation, entertainment, education andculture.
Engels Law remains true.
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Natural Environment
Involves the natural resources that areneeded as inputs by marketers or that
are affected by marketing activities.
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Natural Environment Trends
Shortage of raw materials.
Limited quantities of non-renewable resources.
Increased pollution. Waste disposal, air/water pollutants.
Increased government intervention.
Kyoto and other initiatives. Environmentally sustainable strategies.
G.R.E.E.N. movement.
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Technological Environment
Most dramatic force now shaping ourdestiny.
Changes rapidly. Creates new markets and opportunities.
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Technological Environment
Challenge is to make practical,affordable products.
Safety regulations result in higherresearch costs and longer time betweenconceptualization and introduction ofproduct.
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Political Environment
Includes laws, government agenciesand pressure groups that influence or
limit various organizations andindividuals in a given society.
Increasing legislation.
Changing government agency
enforcement.
More emphasis on ethics and sociallyresponsible actions.
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Key Political/Legal Issues
Fair competition.
Fair trade practices.
Environmental protection. Product safety.
Truth in advertising.
Packaging and labelling.
Pricing.
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Key Canadian Legislation
The Competition Act.
National Trade Mark and True Labelling
Act. Motor Vehicle Safety Act.
Food and Drug Act.
Personal Information Protection andElectronic Documents Act.
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Cultural Environment
The institutions and other forces thataffect a societys basic values,
perceptions, preference and behaviours. Cultural values are highly persistent.
Learned from family and community.
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Cultural Environment
Core beliefs and values are passed onfrom parents to children and are
reinforced by schools, churches,business and government.
Secondary beliefs and values are more
open to change.
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Major Consumer Themes Yankelovich Monitor has identified
eight major consumer value themes:1. Paradox.
2. Trust not.3. Go it alone.4. Smarts really count.5. No sacrifices.6. Stress hard to beat.7. Reciprocity is the way to go.8. Me 2.
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Cultural Environment
Culture is expressed through peoples
views of:
Themselves. Others. Organizations. Society.
Nature. The Universe.
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Global Marketing Environment Trade restrictions.
Tariffs.
Embargos.
Quotas.
Exchange controls.
Non-tariff barriers.
World Trade Organization.
Economic communities.
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World Trade Organization
Voluntary trade associationestablished in 1995, 144 members
doing 90% of world trade. Objective is to promote international
trade by removing barriers through
negotiation.
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Managing Environments
The passive approach.
Monitor and analyze.
Adapt strategies to avoid threats and takeadvantage of opportunities.
The environmental managementperspective.
React aggressively to change forces.
Lobbying, advertorials, lawsuits, complaints.
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Looking Back Describe the environmental forces that affect
the companys ability to serve its customers.
Explain how changes in the demographic and
economic environments affect marketingdecisions.
Identify the major trends in the natural andtechnological environments.
Explain the key changes in the political andcultural environments.
Discuss how companies can react to themarketing environment.