Marketing Chapter 3 - Analyzing the Marketing Environment PDF

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Marketing: Chapter 3 - Analyzing the Marketing Environment

1. A Marketing Environment Analysis Framework

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At the heart of the analysis is always the consumer Consumers may be influenced directly by firm’s microenvironment and corporate partners that work with the firm to make and supply products and services to consumers. The firm, and thus consumers, are indirectly affected by the macro-environment which includes: social, tech, economic, political/legal, culture, and more. Value-Based Marketing: firms create products/services and provide overall greater value to the consumer than the competitors. T  his requires firm’s look at business process from a consumer’s point of view.

2. A Marketing Environment Analysis Framework

PEST + CD = CDSTEP (Macro-Environmental Factors)

Marketing: Chapter 3 - Analyzing the Marketing Environment

4 C’s: Competitors, Company, Consumers, and Corporate Partners 3. Company: Company Capabilities ● ●

Core competency = satisfy customer needs; people, knowledge, facilities, patents, tech, etc all are applied to target markets/products, etc. The primary strength of Apple, for instance, rests in the design, manufacture, distribution, and promotion of Macintosh computers. But, it has successfully leveraged its core competency in the digital audio player arena with its iPod, iPhone, and iPad.

4. Competition Between Organizations In Business ● ● ● ● ●

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Competition affects consumers in the microenvironment Greater competition means more choices for consumers, which influences their buying decision Identify and analyze direct and indirect competitors Knows strengths & weaknesses Competitive intelligence (CI) used to collect and synthesize info with respect to their rivals i.e. Apple vs. Samsung, Air Canada vs. West Jet; usually sue one another due to copyright infringement. CI enables companies to anticipate change rather than react to it CI methods/strategies to gather data: (1) request CSR to analyze merchandise, prices, and foot traffic in store, (2) reviewing public materials, including websites, press releases, industry journals, annual reports, subscription database, permit application, patent application, and tradeshows, (3) interviewing customers, suppliers, partners, or former employees, (4) Analyze rival’s marketing tactics, distribution practices, pricing, and hiring needs.

5. Corporate Partners in Business Organizations ● ● ●

Firms are part of alliances - few work in isolation Align with suppliers, corporate partners, etc. From manufacturer to Retailer

Macroenvironmental Factors: aspects of the external environment - culture, demographics, tech, economic situation, political/legal (CDSTEP), that affect companies.

Marketing: Chapter 3 - Analyzing the Marketing Environment

Culture: is defined as shared meaning, beliefs, morals, values, of a group of people. Country Culture: Entails easy-to-spot visible nuances that are particular to a country such as: dress, symbols, ceremonies, language, colours, food preference, and subtle aspects, which are trickier to identify. Regional Culture: The region in a particular country in which people live affects the way they refer to a particular product category. E.g. 38% of americans call coca-cola “pop”, however, 36% of americans in another region refer to coca-cola as “soda”, it all depends on the region base. Power influences in consumer buying decisions - what they buy, where they’re from, how they buy, etc. culture is broad, but certain demographics within a culture are targeted by a company in order to resonate with a certain product/service the organization develop. Demographics: Characteristics of human population & segments used to identify consumer markets. ● ● ● ● ●

Gender Education Ethnicity Income age/generational cohort

Generational Cohorts: Group of people of the same generation who have similar purchase behaviors because they have shared experiences & are in the same stage of life.

Marketing: Chapter 3 - Analyzing the Marketing Environment

Tweens: Generational cohort of people who are not quite teenagers but are not young children either (ages 9 to 12); they’re in beTWEEN. ● ● ●

Food, drinks, electronics Primarily the cell phone market Endulge many activities simultaneously such as: internet, instant messenger, snapchat, TV, etc.

Generation Y: Generational cohort of people between the ages 13 and 32; the biggest cohort since the original postwar baby boom (Millennials) or “echo-boom” generation. ● ● ● ●

Grew up media intensive Skeptical about what they hear from advertisers Internet and tech savvy Enjoy cell phones, digital music players, video games, cameras, etc.

Generation X: Generation cohort between the age of 36 and 47. ● ● ●

Latch-key kids: grew up with two parents working Grew up in economic recession: carry higher debt load, unemployment, etc Travel the world, move far away from home

Baby Boomers: Generational Cohort of people born after World War II; are between ages of 48 and 66. ● ● ● ● ●

30% of the population (Canada) Individualistic Leisure time Always be able to take care of themselves Rock n’ Roll is at the heart

Seniors: North America’s fastest growing generation cohort; people aged 65 and older. ● ● ● ●

Complain, need attention Take time browsing due to age and lack of impulsive decision making Very conservative Spend just as much as younger generations

Income: purchasing power of an individual in a marketplace. ●

Purchasing power is tied to income (tracked by stats canada)

Marketing: Chapter 3 - Analyzing the Marketing Environment

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Many middle class families feel the decline i n purchasing power in recent years Individual have more purchasing power b  ased on income, this factor enables certain groups to have the ability and willingness to purchase products/services.

Education: Related to income, which determines spending power Gender: Male/female roles have been shifting; marketing has to change to reflect these changes in time. Gender: Male/ female roles have been shifting and marketing has changed to reflect these transitions. For example, more firms are careful about gender neutrality in positioning their products and, furthermore, attempt to transcend gender boundaries whenever they can. Ethnicity: Visible minority groups increasing, Chinese (fastest growing) and South Asians (indians, pakistan, etc), and that visible minorities will be the biggest group to add to canada’s population growth after 2030. CDSTEP: Cultural, Demographic, Social, Technological, Economical/Environmental, and Political/Legal. Cultural change in the diversity of canada will affect advertising and communication/product value of firm’s and what they introduce to consumers in the market. Firm’s may be more open-minded to international ideas brought from multicultural individuals who will bring a way of thinking external to the companies general ideology. Demographic Changes: Baby boomers rising (fastest growing group in Canada); not enough youthful workers, education levels increasing, and women/visible minorities are a large percentage (1 out of 5 canadians not born in Canada) of the population. Social trends shape consumer values, shopping patterns and behaviours, and the importance of marketing efforts firms make will change according to the socio-cultural atmosphere it presents. E.g. Time-poor society, greener consumers, privacy concerns (internet), health and wellness concerns, etc. Green Marketing: involves a strategic effort by firms to supply customers with environmentally friendly merchandise. Countries adding “green-bin” program to encourage consumers to recycle their food and yard waste to make compost for gardening. Technological Changes: new products, new systems for communicating business ideas, new manufacturing equipment to make companies more efficient, new retail channels, etc. Economic: Recession, foreign currency fluctuation, inflation and interest rates affect firm’s ability to market goods and services. E.g. if inflation takes over firms need to price items up in order to maintain competitive advantage and increase profits.

Marketing: Chapter 3 - Analyzing the Marketing Environment

Environmental: Causes consumers to think “green” and lower their carbon footprints, and want more ecological improvements into society rather than just a company that wants to earn money. Firm’s will have to incorporate business strategies to have good corporate social responsibility measures in order to perform well, establish public relations, and maintain profitable. Political/Legal Environment: Competition Act, consumer packaging and labelling act, foods and drug act, and many more laws/regulations have a large impact on how and if a company can promote/sell/distribute their product/service in a country/region....