Lecture Basic Marketing: A global-managerial approach: Chapter 4 - William D. Perreault, E. Jerome McCarthy

When you finish this chapter, you should: Know why company objectives are important in guiding strategic market planning, see how the resources of a firm affect the search for opportunities, know the variables that shape the environment of strategic market planning, know how the different kinds of competitive situations affect strategic planning,...

Chapter 4:    Evaluating Opportunities in the Changing Marketing Environment For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Chapter Objectives When you finish this chapter, you should 1. Know the variables that shape  the environment of marketing  strategy planning 2.  Understand why company  objectives are important in  guiding marketing strategy  planning 3.  See how the resources of a  firm affect the search for  opportunities 4. Know how the different kinds  of competitive situations  affect strategy planning 4­2 5. Understand how the economic  and technological  environment can affect  strategy planning 6.  Know why you might be sent  to prison if you ignore the  political and legal  environment 7. Understand how to screen and  evaluate marketing strategy  opportunities 8. Understand the important new  terms For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Importance of Objectives Provide Guidelines Setting Company Objectives Be Explicit Coordinate Effort Lead to Marketing Objectives 4­3 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill A Hierarchy of Objectives Company Objectives Production Objectives Finance Objectives Product Objectives Marketing Objectives Place Objectives Personal Selling Objectives HR Objectives Promotion Objectives Mass Selling Objectives R&D Objectives Price Objectives Sales Promotion Objectives Exhibit 4­1 4­4 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Limits on Opportunity Search ????? ????? ????? ????? ????? 4­5 Financial Financial Strength Strength Producing Producing Capability Capability and and Flexibility Flexibility Marketing Marketing Strengths Strengths For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Competitive Environment Kinds of Markets Key Concepts in the Competitive Environment Competitor Analysis Competitive Rivals Competitive Barriers Information on Competitors 4­6 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Economic and Technological Environment Global Global Economy Economy Rapid Rapid Change Change Key Economic Forces Interest Interest Rates Rates 4­7 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Impact of Technology Technology is the application of science to  convert and economy’s resources to output Technology impacts marketing both  through opportunities for new products and  new ways (processes) for handling  marketing functions Example:  consider the Internet Products:  software for computer users Process: selling from a web site 4­8 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Political and Legal Environment Nationalism Nationalism Consumerism Consumerism Characteristics of the Political Environment Regional Regional Groupings Groupings 4­9 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Some Important U.S Federal Regulatory Agencies Agencies  Responsibilities Federal Trade Commission (FTC)  Enforces laws and develops guidelines  regarding unfair business practices Food and Drug Administration (FDA) Enforces laws and develops regulations to  prevent distribution and sale of hazardous  consumer products Consumer Product Safety Commission  (CPSC) Enforces Consumer Product Safety Act Federal Communications Commission  (FCC)  Regulates interstate wire, radio, and  television  Environmental Protection Agency (EPA) Develops and enforces environmental  protection standards Office of Consumer Affairs (OCA)  Handles consumer complaints Exhibit 4­4 4­10 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Cultural and Social Environment Time Poverty Economic Power Career Opportunity 4­11 Cultural CulturalTrend: Trend: The TheChanging Changing Roles Rolesof of Women Women For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Sales and Cost Curves of Two Strategies Product A Dollars Sales Total cost In this graphic,  a  too­narrow focus on the  first year’s results might  cause the marketing  manager to abandon this  product as too costly Years Exhibit 4­6 4­12 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Sales and Cost Curves of Two Strategies Product B In this graphic,  a  too­narrow focus on  the first year’s results  might cause the  marketing manager  to adopt the product  prematurely,  since its  performance in year  one is misleading Sales Total cost Years Exhibit 4­6 4­13 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Sales and Cost Curves of Two Strategies Product A Product B Sales Sales Dollars Total cost Total cost Years 5 Years Seen together, it is easy to see that Product A offers a vastly better overall return than does Product B Exhibit 4­6 4­14 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Evaluating Opportunities Industry Attractiveness Low Medium High Medium No Growth Low Business Strength High Borderline Growth Exhibit 4­7 4­15 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Continuum of Environmental Sensitivity Insensitive Industrial products Exhibit 4­8 4­16 Sensitive Basic commodity­type consumer products Consumer products that are linked to cultural variables For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Key Terms Mission Statement Competitive Environment Competitor Analysis Competitive Rivals Competitive Barriers Economic and Technological    Environment 4­17 Technology Nationalism NAFTA Consumerism Cultural and Social Environment Strategic Business Unit (SBU) Portfolio Management For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill ... Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Sales and Cost Curves of Two Strategies Product A Dollars Sales Total cost In this graphic,  a too­narrow focus on the ... performance in year  one is misleading Sales Total cost Years Exhibit 4 6 4 13 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Sales and... first year’s results might  cause the marketing  manager to abandon this  product as too costly Years Exhibit 4 6 4 12 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies,