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MGMA01H3 (200)
Chapter 3

Week 2 - Chapter 3


Department
Management (MGM)
Course Code
MGMA01H3
Professor
Alison Jing Xu
Chapter
3

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1 | Page/MGTB0 4 We e k 2
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bankruptcy in 2001 which they overcame by changing their image and services which
suited the changing technological world
- $FRPSDQ\¶Vmarketing environment consists of the actors and forces outside marketing
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with target customers
- Marketing environment is made up:
o Microenvironment ± consists of the actors close to the company that affects its
ability to serve its customers (e.g. the company, suppliers, marketing
intermediaries, customer markets, competitors, and publics)
o Macroenvironment ± consists of the larger societal forces that affect the
microenvironment (e.g. demographic, economic, natural, technological, political,
and cultural forces
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- Marketing success cannot be done alone and will require building relationships with other
company departments, suppliers, marketing intermediaries, customers, competitors, and
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The Company
- When designing marketing plans, marketing management must take other company groups
into account (e.g. top management, finance, accounting, R&D, operations, purchasing)
- All functions should work in harmony to provide superior customer value and relationships
Suppliers
- Suppliers are an important link since it provides the resources needed by the company to
produce its goods and services (can seriously affect marketing)
- Supply shortages or delays, labour strikes, and other events can cost sales in the short run
and damage customer satisfaction in the long run
- +RPH'HSRWDFWLYHO\VROLFLWVWKH³YRLFHRIWKHVXSSOLHWUHDWVXSSOLHUVDVSDUWQHUVVLQFH
it provides suppliers important feedback that they can improve on and hosts regular
international supplier workshops which factory leaders can attend
Marketing intermediaries
- Marketing intermediaries help the company promote, sell, and distribute its products to
final buyers, includes:
o Resellers ± distribution firms which help the company find customers or make sales
to (e.g. wholesalers and retailers like Wal-Mart, Winners, Home Depot)
o Physical distribution firms ± help company stock and move goods from their points
of origin to their destinations
o Marketing services agencies ± are the marketing research firms, advertising
agencies, media firms, and marketing consulting firms that help the company target
and promote its products to the right markets
o Financial intermediaries ± includes banks, credit companies, insurance companies,
and other businesses which help finance/ insure against the risks from
buying/selling
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value delivery system and marketers today, recognize the importance of working with their
Chapter 3 ± Analyzing the Market Environment (pg. 71 ± 97)
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2 | Page/MGTB0 4 We e k 2
intermediaries as partners rather than simply a channel through which they sell their
products
Competitors
- Marketing concept states that, to be successful, a company must provide greater customer
value and satisfaction than its competitors do
- Markets must do more than simply adapt to the needs of target consumers and gain
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the minds of consumers
- Each firm should consider its own size and industry position before designing a
competitive marketing strategy
Publics
- A public is any group that has an actual or potential interest in or impact on an
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o Financial publics ± LQIOXHQFHVFRPSDQ\VDELOLW\WRREWDLQIXQGVHJEDQN
o Media publics ± carries news, features, and editorial opinion (e.g. newspaper)
o Government publics - PDUNHWHUVPXVWRIWHQFRQVXOWWKHFRPSDQ\VODZ\HUVRQ
issues of product safety, truth in advertising, and other matters
o Citizen-action publics ± marketing decision may be questioned by consumer
organizations, environmental groups, minority groups, and others
o Local publics ± includes neighbourhood residents and community organizations
o General public ± WKHJHQHUDOSXEOLF¶VDWWLWXGHWRZDUGLWVSURGXFWVDQGDFWLYLWLHV
o Internal publics ± workers, managers, volunteers, and the board of directors. Large
companies use newsletters to inform and motivate their internal publics
Customers
- Customers are WKHPRVWLPSRUWDQWDFWRUVLQWKHFRPSDQ\¶VPLFURHQYLURQPHQW
- Company might target any or all of five types of customer markets:
o Consumer markets ± individuals and households who buy goods for personal use
o Business markets ± buys goods for further processing or use in production process
o Reseller markets ± buys goods and services to resell at a profit
o Government markets ± government agencies who buy goods and services to
produce public services or transfer the goods and services to others who need them
o International markets ± LQRWKHUFRXQWULHVFRQVXPHUVSURGXFHUVUHVHOOHUVJRY¶W
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- The company and all actors operate in a larger macroenvironment of forces such as
demographic, economic, natural, technological, political, and cultural
Demographic Environment
- Demography is the study of human populations in terms of size, density, location, age,
gender, race, occupation, and other statistics
- Is a major interest to marketers since it involves people and people make up markets
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- In China where they limited one child per family, these children are showered with
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- Marketers track changing age and family structures, geographic population shifts,
educational characteristics, and population diversity
o Changing Age Structure of the Population
The Canadian population is getting older and the Atlantic regions has the
highest median age [42.5] while Alberta has the youngest [35.7]
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There are three generational groups:
The Baby Boomers
x Baby boomers are the 9.8 million Canadians born following WWII
and lasting until the mid-1960s
x &DQDGD¶VEDE\ERRPZDVXQLTXHFRPSDUHGWR86VLQFH it lasted
longer and averaged 4 children per family rather 3.5 per family
x Are one of the most powerful forces since they account for a third of
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x Mistake to think they are phasing or slowing down but are entering
new life phases (e.g. using the internet, listening to iPod, using
TiVo)
x Financial services industry are targeting the baby boomers the most
since the aging boomers will transfer their funds into new saving
Generation X
x Generation X are the 7 million Canadians born between 1967 and
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x Grown up during times of recession and corporate downsizing led to
having a more cautious economic outlook
x From the marketing viewpoint, Gen Xers are a more sceptical bunch
which tends to research products before they consider a purchase
x Seek success, less materialistic, family coming first, prize
experiences
x MEC appeals to Gen X consumers since they value family, life
experience, and environmental sustainability
Millennials
x Millennials (or Generation Y) are the 10.7 million children of the
Canadian baby boomers, born between 1977 and 2000
x Includes tweens (8-12), teens (13-18), and young adults (around 20)
x Buying power for younger millennials are increasing and as the
older ones are graduating and having careers, able to expand their
spending
x Fluency and comfort with computer, digital, and internet technology
Generational Marketing
x Marketers need to form more precise, age-specific segments within
each group as well as lifestyle, life stage, or common values
segments
o The Changing Canadian Household
Marketers must increasingly consider the distinctive needs and buying
habits of non-traditional households, because they are growing more rapidly
than traditional ones
Non-WUDGLWLRQDOKRXVHKROGV³FURZGHGQHVW´DJHG-29 living with
parents), 1 person households, couples without children, and lone-parent
families
Responsibility for households tasks and the care of children are changing as
there are more dual-income families and women entering the workforce
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