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Chapter 3

Management and Organizational Studies 2320A/B Chapter Notes - Chapter 3: Consumer Futures, Competitive Intelligence, Swot Analysis


Department
Management and Organizational Studies
Course Code
MOS 2320A/B
Professor
John White
Chapter
3

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CHAPTER 3 ANALYZING THE MARKETING ENVIRONMENT
A MARKETING ENVIRONMENT ANALYSIS FRAMEWORK
-marketers who understand and manage changes in environments are able to adapt
product/service offerings to meet new challenges
-heart of analysis is the consumer
-consumer is influenced by microenvironment -> company, competition, corporate partners
-microenvironment is influenced by macroenvironment -> culture, demographics, PEST
UNDERSTANDING THE MICROENVIRONMENT CCC
1. Company Capabilities
-the firm itself first factor that affects the consumer
-focus efforts on satisfying customer needs that match core competencies
-use SWOT to categorize opportunities and if its good assess it to existing competencies
2. Competition
-understand competitiors strengths and weaknesses
competitive intelligence: Used by firms to collect and synthesize information about their
position with respect to their rivals; enables companies to anticipate changes in the
marketplace rather than merely react to them.
reviewing public materials, including websites, press releases, industry journals, annual
reports, subscription databases, permit applications, patent applications, and trade shows
interviewing customers, suppliers, partners, or former employees
analyzing a rival's marketing tactics, distribution practices, pricing, and hiring needs
3. corporate Partners
-suppliers, manufacturers, advertising, consulting services transport companies, etc.
MACROENVIRONMENTAL FACTORS
1. CULTURE
-shared meanings, beliefs, morals, values, and customs of a group of people
-challenge for marketers is to have products or services identifiable by and relevant to a
particular group of people

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-cultures influence what, why, how, where, and when we buy
-Two dimensions of culture: culture of the country, region within a country
country culture
Easy-to-spot visible nuances that are particular to a country, such as dress, symbols,
ceremonies, language, colours, and food preferences, and more subtle aspects, which
are trickier to identify.
Regional subcultures
region in which people live in a particular country affects the way they react to different
cultural rituals, or even how they refer to a particular product category
ex. A resident of Quebec is 25 percent less likely to buy a hot prepared meal or
reheatable meal than a resident of Ontario.
2. DEMOGRAPHICS
-Characteristics of human populations and segments, especially those used to identify
consumer markets, such as age, gender, income, race, ethnicity, and education.
AGE
Generational cohorts
A group of people of the same generation who typically have similar purchase
behaviours because they have shared experiences and are in the same stage of life.
tweens, Generation Y, Generation X, baby boomers, and seniors.
Tweens:
$2.9 billion annually in Canada and $200 billion annually in the United States
$20 billion annually in family purchases.
Cellphone market, food, drinks, electronics, and clothing
Products learnt from TV shows and friends
¾ make purchasing decisions with parents
digital natives -> born with tech
generation Y/milennials
Generational cohort of people born between 1972 and 1992; the biggest cohort since
the original postwar baby boom.
9 mil Canadians 27% of popln, 20s-40s
skeptical about what they hear in the media, which makes marketing to this group even
more challenging
Internet and technology savvy
love digital electronics such as cellphones, digital music players, digital cameras, and
video games
Members of Gen Y often look the same across countries.
Generation X
Generational cohort of people born between 1966 and 1971.
2.8 mil Canadians 8% popln
considerable spending power because they tend to wait to get married and buy houses
later in life.
first generation of latchkey kids (those who grew up in homes in which both parents
worked),
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50 percent of them have divorced parents.
grown up in times of economic recession -> more likely than previous generations to be
unemployed, carry higher debt loads, travel the world, and move far away from their
parents; they are also more likely to live longer with their parents
less interested in shopping, less likely to believe ads
baby boomers
born between 1946 and 1965.
largest cohort of Canadians, representing 30 percent of the population.
individualistic, leisure time is a high priority for them, believe that they will always be
able to take care of themselves partly driven by their feeling of economic security even
though they are a little careless about the way they spend their money, they have an
obsession with maintaining their youth, they will always love rock ‘n’ roll.
anti-aging products, cosmetics, pharmaceuticals, and biotechnology.
Buying power
Seniors
over the age of 65 and make up Canada's fastest-growing group
more likely to complain, need special attention, and take time browsing before making a
purchase compared with younger groups. However, they generally have time to shop
and money to spend.
Travel, second homes, luxury cars, electronic equipment, investments, home
furnishings, and clothing
prefer to buy a few high-quality items rather than a larger number of low-quality items
INCOME
median income of Canadian families in 2010 was approximately $72,240
upper class, middle class, working class (or low-income earners), and underclass (at or
below poverty)
upper class
top 10 percent of Canadians have family income in excess of $80,000
highly educated
managerial and exec roles
48 percent of Canadian households are in the upper class.
spending patterns are not influenced by economic conditions.
Middle class
earn between $30,000 and $70,000
38 percent of Canadian households fall in the middle class
can afford a good life most of the time
tend to be careful about their spending and are often value conscious
working class
earn between $20,000 and $30,000
the richest 20 percent of Canadians spend 5 or 6 times more in every shopping category
than the poorest 20 percent of Canadians
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