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,