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Management (MGM)
Pankaj Aggarwal

Chapter 3: Analyzing the Marketing Environment marketing environment: actors and forces outside marketing that affect marketing managements ability to build and maintain successful relationships with target customers marketers have two abilities: have disciplined methods (marketing research and intelligence) for collecting information about the environment, and spend more time in customer and competitor environments studying environments, can adapt their strategies to meet new marketplace demands microenvironment: actors close to the company that affect its ability to serve its customers - ex. company, suppliers, marketing intermediaries, customer markets, competitors, and publics macroenvironment: larger societal forces that affect the microenvironment - ex. demographic, economic, natural, technological, political, and cultural forces The Companys Microenvironment marketing managements job build relationships with customers by creating satisfaction and value The Company top management set broad strategies and marketing managers make decisions within the strategies and plans Suppliers important link in companys overall customer value delivery system supply shortages/delays/labour strikes can cost sales, damage customer satisfaction Marketing Intermediaries marketing intermediaries: firms that help the company promote, sell, and distribute its goods to final buyers resellers: distribution channel firms that help company find customers or make sales to them - wholesalers, retailers who buy and resell merchandise physical distribution firms help the company to stock and move goods marketing services agencies help target and promote products to the right markets - marketing research, media, consulting firms and advertising agencies financial intermediaries help finance transactions, insure against the risks associate with buying/selling - banks, credit companies, insurance companies Competitors depending on the size of the firm, different marketing strategies have to be implement to position their offerings strongly against competitors offerings in the minds of consumers Publics public: group that has an actual or potential interest in or impact on an organizations ability to achieve its objectives 7 types of publics - financial, media, government, citizen-action, local, general, and internal Customers consumer markets: individuals and households that buy for personal consumption business markets: buy for further processing/production process reseller markets: buy to resell at a profit government markets: made up of government agencies that buy to produce public services or transfer them to others who need them international markets: buyers in other countries The Companys Macroenvironment Demographic Environment demography: study of human populations in terms of categories Changing Age Structure of the Population Baby Boomers: 9.8 million Canadians born during the baby boom following World War II and lasting until mid-1960s started later and lasted longer than Americans accounts for 1/3 of Canadas population constitute a lucrative market for financial services, new housing, home remodelling, travel, entertainment, eating, health and fitness products, etc Generation X: 7 million Canadians born between 1967 and 1976 in the birth dearth first generation of latchkey kids, grown up in times of recession and corporate downsizing therefore developed a more cautious economic outlook, less materialistic, live on debts/tight budgets for marketers Gen X are sceptical, tend to research products before purchasing, tend to be less receptive to overt marketing pitches Millennials (Generation Y): 10.4 million children of the Canadian baby boomers, born between 1977 and 2000 utter fluency and comfort with computer, digital, and internet technology reaching this attractive and huge segment, creative marketing approaches are needed Generational Marketing often split up baby boomers into: leading-edge boomers, core boomers, trailing-edge boomers split up millennials into: tweens, teens and young adults The Changing Canadian Household new trends cause marketers to consider distinctive needs, buying habits of non-traditional households Geographic Shifts in Population different regions buy differently shift in where people live also shift where they work creating a booming SOHO market therefore, marketers are actively courting the telecommuting market A Better-Education, More White-Collar, More Professional Population rising number of educated people increase demand for quality products, books, travel, computers, etc Increasing Diversity ads now feature people from different ethnic backgrounds and target specifically designed products and promotions to one or more groups marketers must keep in mind not to alienate sophisticated second-generation individuals sexual orientation and disability are another parts of diversity Economic Environment economic environment: factors that affect consumer buying power and spending patterns industrial economies: constitute rich markets for many different kinds of goods subsistence economies: consume most o their own agricultural and industrial output and offer few market opportunities developing economies: offer outstanding marketing opportunities for the right kinds of products Changes in Income value marketing: rather than offering high quality at a high price, or lesser quality at very low prices, marketers are looking for ways to offer todays more financially cautious buyers the right amount of quality at a fair price pay attention to income distribution and income levels Changing Consumer Spending Patterns Engels laws: differences noted in how people shift their spending across food, housing, transportation, health care, and other goods/services categories as family income rises consumers with different incomes levels therefore have different spending patterns Natural Environment natural environment: natural resources that are needed as inputs by marketers or that are affected by marketing activities environmental concerns air and water pollution, possibilities of global warming trends in the natural environment: - shortage of raw materials: firms face larger cost increases - increased pollution: damage quality of natural environment - increased government intervention: in natural resource management, hope companies will accept more social responsibility, and less expensive devices can be found to control/reduce pollution environmental sustainability: developing strategies and practices that create a world economy that the planet can support indefinitely Technological Environment technological environment: forces that create new technologies, creating new product and market opportunities many regulations dealing with product safety as technology is becoming more complex Political and Social Environment political environment: laws, government agencies, pressure groups that influence and limit carious organizations and individuals in a given society Legislation Regulating Business well-conceived regulations can encourage competition, ensure fair markets public policy: set of laws/regulations that limit business for the good of society Increasing Legislation business legislation has been enacted because: - protect companies from each other laws are passed to define and prevent unfair competition - protect consumers from unfair business practices - protect the interests of society against unrestrained business behaviour regulation ensure that firms take responsibility for social costs of their production or products Increased Emphasis on Ethics and Socially Responsible Actions businesses are also governed by social codes and rules of professional ethics Socially Responsible Behaviour explosion in the amount of personal digital data available on the internet Cause-Related Marketing companies are linking themselves to worth-while causes to exercise their social responsibility and build more positive images has become a primary form of corporate giving by linking purchases of the companys products/services with fundraising for causes or charities cause-exploitative marketing Cultural Environment cultural environment: institutions and other forces that affect societys basic values, perceptions, preferences, and behaviours Persistence of Cultural Values core beliefs and values: passed on from parents and are reinforced by institutions secondary beliefs and values: more open to change Shifts in Secondary Cultural Values marketers want to predict cultural shifts to spot new opportunities or threats major cultural values of a society are expressed in peoples views of themselves and others, views of organizations, society, nature and the universe Responding to the Marketing Environment some companies take a proactive stance toward the marketing environment aggressive actions to affect the publics and forces in their marketing environment - hire lobbyists to influence legislation affecting their industries and stage media events to gain favourable press coverage - run advertorials (ads + editorials) to shape public opinion - press lawsuits, file complaints with regulators to keep competitors in li
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