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MGMA01H3 Lecture Notes - Market Segmentation, Telecommuting, Competitive Intelligence

Management (MGM)
Course Code
Pankaj Aggarwal

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Chapter 3: Analyzing the Marketing Environment
marketing environment: actors and forces outside marketing that affect marketing management’s
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 Company’s Microenvironment
marketing management’s 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
important link in company’s 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
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
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
public: group that has an actual or potential interest in or impact on an organization’s ability to achieve
its objectives
7 types of publics
- financial, media, government, citizen-action, local, general, and internal
consumer markets: individuals and households that buy for personal consumption

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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 Company’s 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
started later and lasted longer than Americans
accounts for 1/3 of Canada’s 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
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

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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 today’s 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
Engel’s 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
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
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