Marketing Environment
The Uncontrollable Forces
Environmental Scanning
• It involves acquiring information on
events occurring outside the company
and identifying potential trends
Environmental forces
Organization
• Marketing department
• Other departments
• Employees
Suppliers
Customers
Environmental forces
Social
Economic
• Demographic
shifts
• Cultural
changes
• Macroeconomic
conditions
• Consumer
income
Technological
• Changing
technology
• Technology’s
impact on
customer
value
Competitive
• Alternative
forms of
competition
• Components
of competition
Regulatory
• Laws
protecting
competition
and consumers
• Self-regulation
• Consumerism
Social Forces
• They include the demographic characteristics
and its values.
• They reflect the demographic changes and
cultural changes
Demographics is . . . .
describing the population according
to selected characteristics such as
their age, sex, ethnicity, income, and
occupation.
1.The Population Trends
• 1999 Canadian population is 31 million
• expected to be over 35 million by 2011
• number of people ages 20-34 has declined and
the number over 65 has increased
• mature households (age 50+) represent the
fastest growing age segment and control much
of the accumulated wealth in this country
2.Major Population Segments
•
•
•
Baby Boomers: generation of children born between
1946 and 1964, accounts for the majority of the
purchases in most consumer product and service
categories.
Generation X: 15 % of the Canadian population born
between 1965 and 1976. Consumers who are not
prone to extravagance and likely to prefer lifestyles,
products, and services that are very different from
baby boomers.
Baby Boomlet: Canadians born after 1976; also
described as Generation Y or the Net Generation.
3.The Canadian Family
• 30 years ago 33% of all households consisted
of married couples with children; this number
has declined to 15% .
• 61% of all husband-wife families are dualincome families
• 50% of all first marriages end in divorce;
majority of these remarry, creating a blended
family
• some do not remarry, and single-parent
families represent close to 15% of all Canadian
family units
4.Population Shifts in Canada
• Since the mid-1970s there has been major
shift from from rural to urban areas.
• 80% of Canadians are urban dwellers
• Most Canadians live in census metropolitan
areas (CMAs), geographic labour market
areas of 100,000 persons or more
• 62% of all Canadians live in two provinces,
Ontario and Quebec
5.Racial and Ethnic Diversity
• French and English Canadians are still
the majority (70%); most others are of
European descent
• 70% of all immigrants to Canada are
classified as visible minorities
• primarily people from China, Southeast
Asia, Africa, and India
• Nowadays visible minorities represent
close to 18% of the Canadian population
Regional marketing is . . . .
focuses not only on the shifting of consumers
geographically but also on the differences in their
product preferences based on where they live.
Regional marketing involves developing marketing
plans to reflect specific area differences in taste
preferences, perceived needs, or interests.
Culture is . . . .
incorporates the set of values,
ideas, and attitudes of a homogenous
group of people that are transmitted
from one generation to the next.
Changing values and attitudes
• The value of the work ethic is declining.
• There is greater emphasis in the quality of
life.
• “Cocooning in a New Decade”
• “Fantasy Adventure”
The
• “Egonomics”
Popcorn
• “99 Lives”
Report
• “S.O.S (Save Our Society)”
Economic Forces
The Economy pertains to the
income, expenditures, and
resources that affect the cost of
running a business and household
Macroeconomic
conditions
• Inflationary
• Recessionary
• Confidence of the consumers in
the present and near future
Consumer
Income
• Gross Income
• Disposable Income
• Discretionary Income
Technological Forces
• Technology is a major environmental force and refers
to inventions or innovations from applied science or
engineering research.
• Some of the most dramatic technological changes
occurring now are:
– the declining cost and size, and increasing power, of
microprocessors;
– the convergence of television, personal computer,
and telephone technologies;
– the pervasive trend toward “connectedness”
through the World Wide Web;
– the emergence of biotechnology.
Competitive Forces
• Alternative firms that could provide a
product to satisfy a specific market’s
needs.
– Pure Competition
– Monopolistic Competition
– Oligopoly
– Monopoly
Continuum of Competition
Many
Number of sellers
BASIS OF
COMPARISON
PURE
COMPETITION
MONOPOLISTIC
COMPETITION
• Number of
sellers
• Large number
of sellers
• Similar
products
• Distribution is
important
• Large number
of sellers
• Unique but
substitutable
• Pricing is
important
• Product
differences
• Importance of
market mix
One
OLIGOPOLY
MONOPOLY
• A few large
competitors
• Similar
products
• Promotion is
key to achieve
perceived
product
differences
• Single
producer
• Unique and
unsubstitutable
• Unimportant
Components of Competition
Entry (barriers)
Power of Buyers and Suppliers
Existing Competitors and Substitutes
Regulatory Forces
• Consist of provincial restrictions and
federal laws place on business with
regard to the conduct of its activities.
– The competition act
– Self-regulation (BBB, Advertising
Standards Association, The Canadian
Marketing Association)
– Consumerism
Consumerism
• A movement that has helped increase the
influence, power and rights of consumers in
dealing with institutions
1. Right to safety
2. Right to be informed
3. Right to choose
4. Right to be heard