Chapter Four: Analyzing the Marketing Environment
Scenario Planning
1. Assess Strengths and Weaknesses
2. Assess Opportunities and Threats
3. Identify Alternative Scenarios
4. Apply Marketing Mix to the Scenarios
5. Assess Profitability of Each Scenario
Just-In-Time Inventory System – inventory management systems designed to deliver less merchandise
on a more frequent basis than traditional inventory systems; the firm gets the merchandise “just in
time” for it to be used in the manufacture of another product
Macroenvironmental Factors – aspects of the external environment that affect a company’s business,
such as competitors, demographics, social/cultural trends, technological advancements, economic
conditions, and political/regulatory factors
A thorough understanding of these external factors can be critical to a company’s success.
Macroenvironmental Factors (CDSTEP)
1. Competitors
2. Demographics
3. Social/Cultural
4. Technological
5. Economic
6. Political/Legal
1. Competitors
Competitive Intelligence (CI) – used by firms to collect and synthesize information about their position
with respect to their rivals; enables companies to anticipate market developments rather than merely
react to them
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, partners or analyzing a rival’s marketing tactics, distribution practices, pricing etc.
2. Demographics
Demographics – countable characteristics of human populations and segments, especially those used to
identify consumer markets such as age, gender, income and education
Demographics provide an easily understood “snapshot” of the typical consumer in a specific target
market. Generational Cohort – a group of people of the same generation – typically have similar purchase
behaviours because they have shared experiences and are in the same stage of life
Seniors – North America’s fastest growing generational cohort; people aged 63 and over
- take time browsing before making a purchase, but have time and money to spend
Baby Boomers – generational cohort of people born after WWII, between 1946 and 1964
- feel they can always take care of themselves, have an obsession with maintaining their youth
Generation X – generational cohort of people born between 1965 and 1976
- higher debt loads, more likely to be unemployed and live with their parents longer
- less interested in shopping than boomers but demand convenience, less likely to believe marketers
Generation Y – generational cohort of people born between 1977 and 1995; biggest cohort since the
original postwar baby boom
- sceptical about what they hear in the media, media-intensive, brand conscious
Tween – generational cohort of people born between 1996 and 2000; not quite teenagers
In 2000, Canadians with a university degree earned on average over $72,000, those with a college
diploma earned on average less than $50,000 and those with less than a high school education earned
on average about $36,000.
Male/female roles have been blurred. Women make the majority of purchasing decisions and then
influence most of the remainder. In 2005, women entering the workforce earned 15% less than men.
3. Social and Cultural Trends
Social and cultural trends sh
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