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Management and Organizational Studies
Management and Organizational Studies 2320A/B
Gail Robertson

Chapter 3: Analyzing the Marketing Environment  Marketing Environment: consist of actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers o Microenvironment: consist of actors close to the company that affect its ability to serve its customers o Microenvironment: larger societal forces that affect the microenvironment  Marketers must track environmental trends and seek opportunities to adapt strategies by means of: o Disciplined method: marketing research and marketing intelligence o Spend time in customer and competitive environments THE COMPANY’S MICROENVIRONMENT:  Major actors in the microenvironment: The Company:  All interrelated company groups (finance, R&D, top management) form the internal environment o Top management o finance o R&D o purchasing o accounting o operations  Must work in harmony to provide superior customer value and relationships Suppliers:  Important link in the company’s overall customer value and value delivery system  Provide the resources to produce goods and services  Must watch supply availability and costs o can cost sales in the short run and damage customer satisfaction in the long run o Rising supply cost can force price increases that harm company’s sales volume  treated as partners to provide customer value (Home Depot) Marketing Intermediaries:  Marketing Intermediaries: help the company promote, sell and distribute its products to final buyers  Important component of overall value delivery system  Treated as partners to provide customer value  Intermediaries pledges powerful marketing support (Coke is the exclusive provider for fast food chain) o Resellers: distribution channels that help the company find customers or make sales to them (wholesalers and retailers)  Dominated by large reseller organizations that have enough power to dictate terms or even shut smaller manufacturers out of large markets o Physical Distribution firms: help the company to stock and move goods from their points of origin to their destinations o Marketing Services Agencies: firms that help the company target and promote its products to the right markets o Financial Intermediaries: help finance transactions or insure against the risks associated with the buying and selling of goods Competitors:  Success = greater customer value and satisfaction than competitors  gain strategic advantage by positioning offering against competitor’s offerings  no single competitive marketing strategy is best for all companies  must consider size and industry position to determine strategic approach Publics:  Public: any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives  Company can prepare marketing plans for these major publics as well as for its consumer markets o Financial Publics: influences company’s ability to obtain funds (banks, shareholders) o Media Publics: carries news, features, and editorial opinions o Government Publics: government development (consult lawyer on product safety, policy) o Citizen-action Publics: Public relations must stay in touch with consumer and citizen groups to address concerns from consumers, environmental groups, minority groups etc. o Local Publics: appoint community relations officer to deal with the community, attend meetings, answer questions and contribute to worthwhile causes (Ronald McDonald House Charities) o General Public: general public’s attitude towards a company’s products and activities o Internal Public: positive attitude of employees spills over to external publics Customers:  Most important factor in company’s microenvironment  5 types of customer markets: o Consumer Markets: buy goods and services for personal consumption o Business Markets: buy goods and services for further processing or use in their production process o Reseller markets: buy goods and services to resell at a profit o Government markets: government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them o International markets: buyers in other countries THE COMPANY’S MAROENVIRONMENT:  The macroenvironment that shape opportunities and pose threats to a company  DEPEST Demographic Environment:  Demography: the study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics  Important because demography involves people and people makeup the markets  must keep track of demographic trends and developments in markets both at home and abroad  Changing Age Structure of the Population: o single most important demographic o Canadian population is getting older – median age is 39.4 (July 2008) and varies by region o Canadian groups contain several generational groups: a) The Baby Boomers (1947 – 1966):  Started a year later than USA, lasted longer and averaged 4 children per family  Not a worldwide phenomenon – USA, Canada, Australia & New Zealand  Account for third of Canada’s population and control over 50% of the country’s wealth  Youngest boomers: mid 40s & Oldest boomers: early 60s  Constitute a lucrative market due to sheer size, reaching peak earnings and spending years  Think young even though they are getting ready to retire  Focus of many businesses/trends throughout their lives b) Generation X (1967 – 1976):  high parental divorce rate  first generation of latchkey kids  cautious economic outlook having grown up during recession and corporate downsizing  woefully behind in saving retirement and saddled by debt  care about environment and respond favourable to socially responsible companies  less materialistic – prize experience not acquisition  family comes first and career second  skeptical –research products before purchase and less receptive to marketing pitches c) The Millennial/Gen Y/Echo Boomers (1977 – 2000):  Children of baby boomers: 10.4 million – larger than boomers  Consist of tweens (8—12), teens (13-18) and young adults (20-something)  High comfort in technology  Each millennial segment = huge and attractive market (Tide) o Marketers need to form precise, age-specific segments within each group o Generational Marketing: important in segmenting people by lifestyle, life stage instead of age  The Changing Canadian Household: o “crowded nest” syndrome: 43.5% of young Canadian aged 20 to 29 live with their parents o Growing trend of:  Divorce or separation  Choosing to marry later  Choosing not to marry  Marrying without intending to have  Increased number of working women children  Stay at home dads o Marketers consider distinct needs and buying habits of these emerging nontraditional households:  Child day care business  Career-oriented women’s clothing  Financial Services  Convenience foods and services  Geographic Shifts in Population: o Population shifts is important because people in different regions buy differently o Shift in where people live has also caused a shift in where they work o Migration toward metropolitan and suburban areas has created a lucrative telecommuting market  SOHO (small/office/home office) market  Canadians are becoming better educated prompting increased demand for quality products (books)  Increasing Diversity: o Over 5 million Canadians (16%) are visible minorities (2006) o Visible minority population increased 5 times faster than the population as a whole (2001 – 2006) o Result in increased spending in ethnic marketing o Companies now target specially designed products and promotion to one or more ethnic group o Growing feature people from different backgrounds in their ads o Communicating in consumer’s native language is mandatory(TD Bank) o Marketers must not alienating sophisticated second-generation individuals o People with disability:  Considerable spending power  need for tailored products and services  marketers are realizing the worlds of disabilities and non-disa
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