MKT 301 Chapter 4 Notes - Professor: Nadia Pomirleanu PDF

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Professor: Nadia Pomirleanu...

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Chapter 4: Marketing Environment 1. Target Market a. Target market- a defined group most likely to buy a firm’s product i. ii.

Changes as consumers age External elements change consumers’ desires

2. Environmental Scanning/Management a. Environmental scanning- the collection & interpretation of info about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan b. External environment i.

6 factors: 1. Demographics a. Demography- the study of people’s vital statistics i.

Age

ii.

Race

iii.

Ethnicity

iv.

Location

b. Diversity can result in bottom-line benefits to companies 2. Social change a. Ever-changing marketplace b. Attitudes i.

Change more frequently

c. Values i.

Change less often

d. Lifestyle i.

Component lifestyles- the practice of choosing goods & services that meet one’s diverse needs & interests rather than conforming to a single, traditional lifestyle 1. Extreme athletes 2. Mothers/fathers

e. How do social factors influence: i.

Products purchased 1. Vegans won’t buy dairy

ii.

Prices paid for products 1. Organic products are more expensive

iii.

Effectiveness of promotions

iv.

How, where, and when people purchase

f. Social factors & social media i.

SM: web and mobile based technologies that allow the creation & exchange of user generated content

ii.

89% among 18-29 years old

3. Economic conditions a. Consumer income purchasing power

b. Inflation- a measure of the decrease in the value of money i.

Expressed as a % reduction in value since the previous year

c. Recession - a period of economic activity characterized by negative growth i.

Reduces demand for goods & services

d. Purchasing power- a comparison of the relative cost of a set standard of goods & services in different geographic areas 4. Political and legal factors a. Laws & regulations protect: i.

New technology

ii.

Society

iii.

Businesses

iv.

Consumers

v.

Example: patents

5. Technology a. The technological environment i.

Represents the application of knowledge in science, inventions, and innovations to marketing

b. Research i.

Basic research

1. Pure research that aims to confirm an existing theory or to learn more about a concept phenomenon ii.

Applied research 1. An attempt to develop new/improved products a. Impossible burger

c. Technological factors i.

New technology creates a long-term competitive advantage

ii.

External technology 1. Creates more efficient operation or better products 2. May render existing products obsolete

iii.

Innovation - global process

iv.

New technologies = new opportunities

6. Competition a. How many competitors? i.

No competitors = control

b. How big are competitors? c. How interdependent is the industry?

i.

If something happens, does it affect the whole industry?

d. Developing a competitive strategy i.

Should we compete?

ii.

If so, in what markets?

iii.

How should we compete?

e. Types of Competition i.

Direct 1. Nike vs. Reebok vs. Adidas

ii.

Indirect 1. McDonalds vs. Pizza Hut vs. Arby’s

iii.

General (Budget) 1. Competing for the same dollars

f. Competitive factors i. ii.

Impact on share & profits Firms must work harder to maintain profits & market share

iii.

Global competition 1. More foreign firms entering US market a. Compete on product quality...