McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc All Rights Reserved LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 3, YOU SHOULD BE ABLE TO: LO1 Explain how environmental scanning provides information about social, economic, technological, competitive, and regulatory forces LO2 Describe how social forces such as demographics and culture can have an impact on marketing strategy LO3 Discuss how economic forces such as macroeconomic conditions and consumer income affect marketing 3-2 LEARNING OBJECTIVES (LO) AFTER READING CHAPTER 3, YOU SHOULD BE ABLE TO: LO4 Describe how technological changes can affect marketing LO5 Discuss the forms of competition that exist in a market and key components of competition LO6 Explain the major legislation that ensures competition and regulates the elements of the marketing mix 3-3 ENVIRONMENTAL SCANNING LO1 Environmental Scanning SWOT • Tracking Environmental Trends • Example: Coffee Marketers • An Environmental Scan of Today’s Marketplace 3-4 Social-Cultural Environment The relationship between the marketer and society and its culture U.S population is getting older, birthrates are falling and it is becoming more diverse Marketers must be sensitive to society’s demographic shifts and changing values Social-Cultural Environment Cultural Diversity U.S diverse society composed of various sub-markets Each has unique values, cultural characteristics, consumer preferences, and purchasing behavior Social-cultural context exerts more influence on marketing decisionmaking in international sphere Marketers redesign packages and modify products and advertising messages to suit tastes and preferences of different cultures Social-Cultural Environment Consumerism Social force that aids and protects the buyer by exerting legal, moral, and economic pressures on business Increasing consumer activism in recent years Firms must weigh consumer demands with profit objectives • Dilemma: pleasing customers vs remaining viable Social-Cultural Environment Consumerism President JFK’s rules of thumb on consumer rights: Right to choose freely Right to be informed Right to be heard Right to be safe Framework for consumers-rights legislation Social-Cultural Environment Ethics Concerns matters of right and wrong: Responsibility of individuals and firm to what is right Increased emphasis on marketing ethics Means promising customers and business partners not to sacrifice quality and fairness for profit Ethical Questions in Marketing Product Distribution •Planned obsolescence •Product quality and safety •Product warranties •Fair packaging and labeling •Pollution •Exclusive territories •Dumping •Dealer rights •Predatory competition •Marginal outlines Ethical Promotion •Bait-and-switch advertising •Promotional allowances •Bribery Issues Price •Price fixing •Price discrimination •Price increases •Deceptive pricing Value Consciousness Value consciousness is the concern for obtaining the best quality, features, and performance of a product or service for a given price that drives consumption behavior 3-81 Economy The economy pertains to the income, expenditures, and resources that affect the cost of running a business and household 3-82 Gross Income Gross income is the total amount of money made in one year by a person, household, or family unit Also known as money income at the Census Bureau 3-83 Disposable Income Disposable income is the money a consumer has left after paying taxes to use for food, shelter, clothing, and transportation 3-84 Discretionary Income Discretionary income is the money that remains after paying for taxes and necessities 3-85 Technology Technology consists of the inventions or innovations from applied science or engineering research 3-86 Marketspace Marketspace consist of information- and communicationbased electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings 3-87 Electronic Commerce Electronic commerce is any activity that uses some form of electronic communication in the inventory, exchange, advertisement, distribution, and payment of goods and services 3-88 Intranet An intranet is an Internet-based network used within the boundaries of an organization 3-89 Extranets Extranets are Internet-based technologies used to permit communication between a company and its suppliers, distributors, and other partners 3-90 Competition Competition consists of the alternative firms that could provide a product to satisfy a specific market’s needs 3-91 Barriers To Entry Barriers to entry consist of business practices or conditions that make it difficult for new firms to enter the market 3-92 Regulation Regulation consists of the restrictions state and federal laws place on business with regard to the conduct of its activities 3-93 Consumerism Consumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions 3-94 Self-Regulation Self-regulation is an alternative to government control where an industry attempts to police itself 3-95 ... regulates the elements of the marketing mix 3-3 ENVIRONMENTAL SCANNING LO1 Environmental Scanning SWOT • Tracking Environmental Trends • Example: Coffee Marketers • An Environmental Scan of Today’s... 3-1 Environmental forces affect the organization, its suppliers, and its customers 3-12 FIGURE 3-2 An environmental scan of today’s marketplace shows the many important trends that influence marketing. .. affect marketing LO5 Discuss the forms of competition that exist in a market and key components of competition LO6 Explain the major legislation that ensures competition and regulates the elements