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Chapter 3

Management and Organizational Studies 2320A/B Chapter Notes - Chapter 3: Swot Analysis, Habitat, Baby Boomers

Management and Organizational Studies
Course Code
MOS 2320A/B
John White

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Chapter 3: Analyzing the Market Environment
A Marketing Environment Analysis Framework
-Marketers who understand and manage the changes in their marketing
environments are able to adapt their product and service offerings to meet new
challenges and opportunities
-Many marketers get their ideas for new products or services from monitoring and
studying the market environment
-Analyzing the market environment also helps marketers assess their continued
strengths and the value of their products and services, and any weaknesses resulting
from changes in the marketing environment
-Companies analyze their marketing environment using a framework
-The consumer is always at the heart of the analysis and consumers may be
influenced directly by the firm’s microenvironment, including the immediate
actions of the focal company, the company’s competition and the corporate
partners that work with the firm to make and supply products and services to
-The firm, and therefore consumers indirectly, is influenced by the macro
environment which include influences such as culture and demographics, as
well as social, technological, economic, and political/legal factors
Microenvironmental Factors
-Things that affect consumer’s microenvironment: the company (its capabilities), its
competition, and its corporate partners
Company Capabilities
-The first factor that affects the consumer in a firm’s microenvironment is the firm
-Successful marketing firms focus their efforts on satisfying customer needs that
match their core competencies
-Marketers can use an analysis of the external environment like the SWOT analysis to
categorize an opportunity as either attractive or unattractive and if it appears
attractive, to assess it relative to the firm’s existing competencies

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-Competition significantly affects consumers in the microenvironment
-Greater competition means more choices for consumers, which influences their
buying decisions
-It is critical that marketers understand their firm’s competitors, including their
strengths, weaknesses and likely reactions to the marketing activities their own firm
-Firms use competitive intelligence (CI): to collect and synthesize information about
their position with respect to their rivals
-CI enables companies to anticipate changes in the marketplace rather than
merely react to them
-Study found that less than half of decision makers say that their company is
involved in various CI initiatives
-The strategies to gather CI can range from simply sending a retail
employee to a competitive store to check merchandise, prices, and
foot traffic to more involved methods such as interviewing customers,
suppliers, partner or former employees and analyzing a rival’s
marketing tactics, distribution practices, hiring and pricing
-Although CI is widely regarded as a necessary function in today’s world,
certain uses of this information have come under ethical and legal scrutiny
Corporate Partners
-Few firms operate in isolation ex) automobile manufacturers collaborate with
suppliers of sheet metal; tire manufacturer, component part makers, unions etc
-Parties that work with the focal firm are its corporate partners
Macroenvironmental Factors
-In addition to understanding the company itself, its competition and its corporate
partners, marketers must also understand the macroenvironmental factors aspects
of the external environment culture, demographics, social trends, technological
advances, economic situation, and political/legal environment that affect companies
1) Culture- the shared meanings, beliefs, morals, values and customs of a
group of people
a. Transmitted by words, literature and institutions, culture is passed
down from generation to generation and learned over time
b. The challenge for marketers is to have products or services
identifiable by and relevant to a particular group of people our
various cultures influence what, why, how, where and when we
c. Two dimensions of culture that marketers must take into account
are culture of the country and that of the region within the
2) Country Culture: visible nuances such as artifacts, behavior, dress,
symbols, physical settings, ceremonies, language differences, colors and
tastes ad food preferences are easy to spot and more subtle aspects,
which are trickier to identify

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a. Companies such as BMW have successfully bridged the cultural
gap by producing and advertising that appeals to the same target
market across countries pictures and copy are the same but the
only thing that changes is the language
3) Regional Subcultures: the 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
Demographics: indicate the characteristics of human populations and segments,
especially those used to identify consumer markets such as age, gender, income,
race, ethnicity, and education
1) Generational Cohorts: a group of people of the same generation who
typically have similar purchase behaviors because they have shared
experiences and are in the same stage of life
a. Tweens: generational cohort of people who are not quite
teenagers but are not young children either (9-12) they are in
i. They have an immense buying power as they also
influence in family purchases
ii. They affect in many areas but particularly in the cell phone
market and tween users make great use of advanced
features such as web surfing, photo capabilities, and
iii. In Canada, tweens spend their money mainly on food and
drinks, electronics, and clothing and mainly learn about
new products from TV and friends
iv. They are not however an easy group to market to as they
make shopping decisions jointly with their parents
v. They are known as speeders as they do everything in
lightening speed and they have grown up as the “digital
natives” – marketers are inventing increasingly innovative
ways to reach tweens through the Internet
vi. Since they have little of their own money, tweens tend to
be of value conscious
b. Generation Y/Millenials: generational cohort (referred to as the
“Echo boom”) of people born between 1972 and 1992, the biggest
cohort since the original baby boom (just over 9 million Canadians
ranging from people in their 20s to 40s who have started their
own families
i. They have grown up in a more media-intensive and brand
conscious era than their parents and so they are more
skeptical about what they hear in the media, which makes
marketing to this group even more challenging
ii. They watch an hour less TV than the average household,
use the internet at work for personal reasons, and expect a
healthy option at a fast food restaurant they are internet
and technology savvy as well
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