Chapter 3 provides knowledge of scanning the marketing environment. After reading chapter 3, you should be able to: Explain how environmental scanning provides information about social, economic, technological, competitive, and regulatory forces; describe how social forces such as demographics and culture can have an impact on marketing strategy; discuss how economic forces such as macroeconomic conditions and consumer income affect marketing.
McGrawHill/Irwin Copyright © 2013 by The McGrawHill Companies, Inc. All rights reserved 3-1 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 LO5 LO6 Describe how technological changes can affect marketing Discuss the forms of competition that exist in a market and the key components of competition Explain the major legislation that ensures competition and regulates the elements of the marketing mix 3-3 WHAT IS THE WORLD’S THIRD LARGEST NATION? THE SOCIAL NATION CREATED BY FACEBOOK! Facebook and the Influence of Environmental Forces Where Social Networking and Facebook are Headed 3-4 FIGURE 3-1 Environmental forces affect the organization, its suppliers, and its customers 3-5 LO1 ENVIRONMENTAL SCANNING Environmental Scanning • Tracking Environmental Trends • Example: Coffee Marketers 3-6 FIGURE 3-2 An environmental scan of today’s marketplace shows the many important trends that influence marketing 3-7 LO1 ENVIRONMENTAL SCANNING An Environmental Scan of Today’s Marketplace • Increasing U.S Population Diversity • Growing Economic Impact of China and India 3-8 LO2 SOCIAL FORCES DEMOGRAPHICS—POPULATION Social Forces Demographics • World Population Population Explosion • U.S Population 3-9 LO2 SOCIAL FORCES DEMOGRAPHICS—GENERATIONAL COHORTS Baby Boomers: 1946 - 1964 Generation X: 1965 - 1976 Generation Y: 1977 - 1994 Millennials: 1995+ Generational Marketing 3-10 Multicultural Marketing Multicultural marketing consists of combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races 3-55 Culture Culture consists of the set of values, ideas, and attitudes that are learned and shared among the members of a group 3-56 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 3-57 Economy The economy pertains to the income, expenditures, and resources that affect the cost of running a business and household 3-58 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 3-59 Disposable Income Disposable income is the money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation 3-60 Discretionary Income Discretionary income is the money that remains after paying for taxes and necessities 3-61 Technology Technology consists of the inventions or innovations from applied science or engineering research 3-62 Marketspace Marketspace is an informationand communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings 3-63 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 3-64 Competition Competition consists of the alternative firms that could provide a product to satisfy a specific market’s needs 3-65 Barriers to Entry Barriers to entry are business practices or conditions that make it difficult for new firms to enter the market 3-66 Regulation Regulation consists of the restrictions state and federal laws place on business with regard to the conduct of its activities 3-67 Consumerism Consumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions 3-68 Self-Regulation Self-regulation is an alternative to government control where an industry attempts to police itself 3-69 ... Values • Value Consciousness 3- 21 LO3 ECONOMIC FORCES MACROECONOMIC CONDITIONS Economy • Inflation • Recession 3- 22 FIGURE 3- 4 The Index of Consumer Sentiment (ICS) 3- 23 LO3 ECONOMIC FORCES CONSUMER... 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... Chicagoland 3- 16 LO2 SOCIAL FORCES DEMOGRAPHICS—RACIAL & ETHNIC DIVERSITY Composition Trends • African Americans • Hispanics • Asian Americans Multicultural Marketing 3- 17 FIGURE 3- 3 Racial