Chapter two: The Marketing Environment
The Marketing Environment
Provides marketers with direction on how to best market products to meet
changing consumer needs.
Successful marketing programs must reach out and address changes in the
marketplace while also touching areas of increasing interest.
The marketing environment-The factors that marketers monitor to stay current
and informed- and explain how these factors impact marketing decisions.
Looks at demographic trends, socio-cultural changes, the economic environment,
the use of technology, the competitive nature of the market, and regulatory forces.
Specifically socio-cultural factors, demographic factors, economic factors,
technological factors, competitive factors, and regulatory factors.
Marketers take this approach and scan the elements of the marketing environment
to identify business opportunities.
After conducting further analysis and research, marketers integrate sound
business ideas into marketing plans that provide direction for the business.
Businesses and non-profit organizations use this approach to stay appraised of
changes that affect their target markets.
Marketers scan the marketing environment and review six key areas of focus:
1) demographic factors 2) socio-cultural forces 3) economic forces 4)
technological forces 5) competitive forces 6) regulatory forces
A Marketing Environmental Scan
The process of continually acquiring information on events occurring outside an
organization to identify trends and pinpoint opportunities and threats to a
Marketers use this knowledge to ensure that their goods, services, and ideas are
relevant and meaningful
Often used as a stepping stone to conduct a more extensive SWOT analysis
(Strengths, Weaknesses, Opportunities, and Threats)
SWOT involves assessing how well a company is faring in servicing its
businesses and target consumers by assessing an organizations internal strengths
and weaknesses as well its external opportunities and threats. This is in relation to
the industry, its competitors, and trends identified in an environmental scan.
Used to set future direction for the business and lay groundwork for competitive
The statistical study of populations is referred to as demographics.
Looks at characteristics such as gender, age, ethnicity, income, education, and
occupation of a group of people. It is important for marketers to clearly understand changes that are occurring
in the demographic arena to ensure that marketing efforts are well placed and
opportunities are not over-looked.
Based off data the Canadian population is growing older, contains diverse
generations, is moving into the suburbs of large cities, is becoming more
ethnically mixed, and is increasingly living in non-traditional families- we
look at these trends and identify their impact on marketing efforts.
An Aging Population
11.7 percent of population between ages 55-64 all time high
Population over the age of 65 is increasing due to low birth rates, and better health
This age group represents 13.7 percent of pop, resulting in a higher amount of
seniors who require different goods and services.
People over the age 50 control 75% of the net worth of Canadian households
Marketers note four main generational groups of consumers: baby boomers,
generation x, gen y, and gen z
Baby boomers This group now accounts for approx. 60% of expenditures on
consumer goods and services, and will continue to be a key force as it moves into
its seniors years, marketers have notice this group and are developing products to
address these needs. Marketers take note of changes and adjust their
communication platforms accordingly.
Generation X- the group of people born after the baby boomers, they are
becoming a key influence in the market.
Gen Y- Group of people born between 1975-1991, mostly children of baby
boomers, 27.5% of population. In time this generation is expected to become as
influential as their baby boom parents.
Gen Z- born between 1992-2010, grown up with the internet, and as pioneers of
social media are considered the most disruptive of generations- net generation.
They are discoverers and creators of content that they readily critique and share
Each of these generations has different tastes, consumption patterns, and attitudes.
For each generation, marketers need to develop distinct marketing programs,
products, and services.
Ex. Each generation uses media differently. Marketers have to carefully select
which communication tools should be used. Marketers adjust their media
platforms to meet the evolving habits of their target markets.
Big city Dwelling
Stats indicate that cities are growing much faster than rural areas, which lag
behind the rest of the country in growth rates.
Visible minorities now make up 50% of the population in large urban areas This multicultural mix creates an interesting array of opportunities for
marketers. These specific ethnic groups have their own particular interests and
habits, which can be addressed in unique ways.
Growth in underdeveloped areas such as Africa, Asia, and India. China and India
alone are home to 2.5 billion people 38% of the world's population. These areas
represent future opportunities for marketers seeking to expand into foreign
markets. The sheer size of these countries presents an opportunity to sell products
The Internet allows companies to target foreign markets through online
Family size has decreased with families having one or two children versus three
More common-law relationships, single-parent families, and blended families
This change in family structure impacts marketers who need to determine whether
these new trends will affect their markets.
Socio-cultural trends are more difficult to pinpoint than demographic changes. It
is not easy to identify societal and cultural shifts in attitudes, or to t