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Chapter 3
The Marketing Environment
The Melamine TV Commercial in Egypt
In the early 1960's, there was a TV commercial in Egypt about sets of
dishes, bowls, cups, etc., used for serving food and drinks, made of melamine (a
white, crystalline cyclic compound). Products made of melamine are
unbreakable.
Manufacturing of these sets using melamine was a breakthrough, since
only sets made of china were known and used at that time. Chinaware is easy to
break. Serving sets which were made of Melamine combined both an attractive
look that was much similar to Chinaware, plus being unbreakable, and
consequently durable. Such a product was expected to be a successful product
in the market.
The TV commercial was designed in such a way as to provide the TV
audience with information about that product, along with its advantages over
the Chinaware, to persuade people to buy it. The commercial consisted to two
scenes in which a fight between an Egyptian husband and his wife, took place
in a kitchen. In each scene, the wife tried hard to hurt the husband by throwing
dishes and the like at him. They were targeted at his face and in a sarcastic
manner, he was trying to avoid being hit by them. He succeeded in getting out
of the fight safely in both scenes.
In the first scene, the wife used Chinaware in the fight, which ended up
being smashed. In the second scene, Melamine was used in the fight. The wife
threw the pieces at her husband, while he tried, to avoid being hit. Although she
threw them everywhere hitting the ceiling, walls and floor, none of the pieces,
were broken or cracked. At the end, a strong and loud voice stated in Arabic
that, “Al-Melamine gamid wa matien.” This can be translated into English as:
“Melamine is solid and durable."
The advertising company expected that the commercial would be highly
successful and to cause the audience to favorably react to it. The reasons for
such expectations were: (1) it used an approach which ranges between a story
line and slice-of-life format, where a situation is shown, which is supposed to
be from real life, to transmit the message, an approach that is considered
effective in associating the situation with reality, and the viewer would be
involved in it, (2) the likelihood of being influenced by it is usually high, as a
result of using real evidence/proof of the durability of the product advertised-as
compared to Chinaware- which was different from just stating the major
characteristic without using such evidence, (3) utilizing maximum audio-visual
and motion capabilities of TV, to achieve the required influence of the
advertised message on the viewer, (4) using humor in this situation to make the
viewer feel good, and help obtain the desired effect, (5) constructing a
commercial with rhymed prose (i.e., Al-Melamine gamid wa matien) which
contains the core/essence of the advertising message intended to reach viewers,
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54 Chapter 3 : The Marketing Environment
which makes it easy to recall-especially if the viewers are exposed to it at a high
frequency. They assumed that using these attributes would lead to an increase in
advertising effectiveness.
Despite the fact that these reasons are logical and justify expecting the
advertisement success, it failed as a result of the severe criticisms which it
aroused. The TV commercial demonstrated the Egyptian family in a negative
setting. It contradicted the good relationship which should exist between the
husband and wife. It demonstrated the Egyptian wife as being highly
aggressive, not respective of her husband, and it demonstrated the husband as
being coward, and scared of his wife. Of course, the situation was unreal, but
still unaccepted by all Egyptians at that time. Therefore, the advertisement was
not accepted, and failed to achieve what the company was after.
The failure of the Melamine TV commercial could be attributed to
disregarding the characteristics of the socio-cultural environment within which the
commercial was run at that time. Consequently, it did not consider this
environment in its design. Therefore, being in conflict with certain socio-cultural
values prevailing in a society, where the advertisement is run can result in
attacking and criticizing it by the desired target audience. Socio-cultural
environment is one component of the marketing environment which has to be
taken into consideration when practicing marketing activities and making the
related decisions.
The marketing environment is the focal point of this chapter. First, the
concepts and the importance of such an environment is outlined. Next, each of the
components of this environment is discussed along with showing its impact on
marketing. The marketing environment components (sub-environments) which are
discussed in this chapter are: the competitive environment, economic environment
political/legal and regulatory environment, technological environment,
demographic environment and, finally, socio-cultural environment.
Concept and Importance of the Marketing Environment
The marketing environment consists of a number of external components
(i.e., external sub-environments) which influence the organization’s marketing
practices either directly or indirectly. In the first chapter of this book, it is
indicated that the evolution of the marketing concept and the stages through which
it passed, was an outgrowth of the changes in the surrounding environment. This
indicates that examining and responding to the marketing environment is
considered an important practice for the success of any organization. It is
worthwhile to note that marketing is probably the function that is most influenced
by the external environment in an organization.
Aside from some minor variations among marketing academicians
concerning what constitute the marketing environment, such an environment
usually includes: competitive, economic, political/legal, technological,
demographic and sociocultural environments.
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It is important to examine and analyze such environments before
formulating the marketing mix and making the related decisions. One must take
the results of these processes (examining and analyzing the environment) into
consideration when planning, organizing and controlling marketing activities This
could make the difference between the success or failure of any organization
which operates in such environments. The melamine case which this chapter
begins with clearly demonstrates the dysfunctional results of disregarding one
element of the marketing environments (i.e., the socio-cultural environment) when
practicing one of the marketing activities.
The history of marketing practices of a large number of organizations
supports this notion. Several companies have succeeded as a result of paying
close attention to their marketing environments and intelligently responding to
them. For example, during the baby boom era in U.S., which started after World
War II, Johnson & Johnson was smart enough to specialize in baby products and
was highly successful in the market. However, as that era came to an end, the
company made some modifications in its marketing strategies. These
modifications have been: (a) marketing some of its baby products (e.g., shampoos,
soaps and powders) to adults, (b) looking for markets beyond U.S. boundaries,
which witnessed a baby boom and could afford the company’s products, and
(c) introducing non-baby related products to the market, whether in or outside the
U.S.A.
This is an example of examining and responding to the environmentprimarily, the demographic environment in this case. It is important to note that
the marketing environment is dynamic. Changes, whether they are slow or rapid,
take place with the passage of time. This means that such an environment has to
be monitored on a continuous basis, otherwise, the organization will not be able to
grow and survive, especially in the long-run.
Examining the marketing environment and monitoring the changes in such
an environment can be done through both environmental scanning and
environmental analysis.
Environmental scanning is the process of gathering data about various
components of the marketing environment. Scanning depends on several sources
of data whether secondary (e.g., trade, business and government publications) or
primary (e.g., personal observation). Marketing research can play a critical role in
gathering such data from different sources.1 Undoubtedly, the Internet can
effectively and efficiently be used in the scanning process.
Environmental analysis is "the process of assessing and interpreting (the
data) gathered through environmental scanning.” 2 The marketing manager has to
assess the data gathered based on such criteria as: their accuracy, source
credibility, relevance, and comprehensiveness. Interpreting such data is as
important as assessing them, since it helps marketing managers understand and
comprehend the present state as well as the expected changes in the environment.
It helps to identify the current or expected opportunities and threats in such an
environment. Hopefully, marketing managers will be able to capitalize on
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56 Chapter 3 : The Marketing Environment
opportunities and prepare to face threats through different approaches to
marketing strategies, as well as other functional areas of business.
It is worthwhile to indicate that environmental scanning and analysis are
key tools in the marketing planning process, especially, strategic planning.3
In the above Johnson & Johnson case, it is easy to see that the baby boom
posed an opportunity, whereas the decline in birth rates and people’s concern
about birth control represented a threat to the company.
As previously indicated, marketing managers have to respond to the
marketing environment. The discussion in this chapter so far mostly refers to
responding to such an environment through a reactive approach, i.e., the different
environmental components are viewed as given or uncontrollable, and adjusting
marketing strategies and decisions according to what is happening in the
environment. This approach is relatively easy and less risky to use.
However, marketing managers can utilize the proactive approach as well.
Whereby they attempt to shape the environment or influence it through aggressive
marketing practices.4 For example, marketers of fast food chains in Egypt have
succeeded in changing the Egyptian eating habits from preparing meals at home to
preferring to eat out, take away their meals, or order meals to be delivered to their
homes. Another example is found in the tobacco industry abroad, especially in the
U.S.A. Tobacco companies were successful in lobbying for less restriction on
their products. This means that, they have influenced the legal environment to be
on their side or, to minimize its negative impact on the marketing of their
products. Nevertheless, the latter approach is not easy and is riskier to use. In
addition, there are some environmental trends which a company cannot do that
much to influence or shape such as birth and inflation rates at the national level,
and the Gross National Product (GNP) at the national level.
Therefore, the two approaches to respond to the marketing environment
are available to use, by the marketing managers. There is no such a thing as the
best approach or the approach which should be used in all circumstances. The
choice between the two approaches is affected by such factors as: the company’s
philosophy/orientation, its goals and objectives, financial and non-financial
capabilities, customers, skills and caliber of its personnel and, last but not least,
the characteristics of the environment that surrounds the company. Companies
such as Proctor & Gamble, Microsoft and General Motors can use the proactive
approach when dealing with the environment, whereas other small companies
with limited financial, human and other resources might have to use the reactive
approach.
As previously stated, the marketing environment includes a number of
components/ sub-environments. These are: competitive, economic, political/legal/
regulatory, technological, demographic and sociocultural environments. Each of
these environments is discussed in the following sections of this chapter.
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Competitive Environment
Any organization which operates in a certain market(s) has to pay
attention to the competitive environment which surrounds it. Competitive
environment involves the types of competition which an organization might face,
and the competitive structures within which it operates.5
1. Types of competition
In general, competition can be defined as: “other organizations that market
products similar to or that can be substituted for a marketer’s products in the same
geographic area”6. Therefore, a marketer of soft drinks in Jordan might view
competition in terms of other soft drinks’ producers or substitutes to soft drinks.
However, there are several types of competition, and consequently of
competitors. “Total budget competitors are firms that compete for the limited
financial resources of the same customer. Generic competitors are firms that
provide very different products that solve the same problem or satisfy the same
basic customer need. Product competitors are firms that compete in the same
product class, but whose products have different features, benefits, and prices.
Brand competitors are firms that market products with similar features and
benefits to the same customers at similar prices”.7
For example, automobile producing companies, home appliances
marketers, and travel agencies which market to middle- social class customers are
total budget competitors. Firms which market different products for entertainment
(e.g., movie theaters, circus, producers of TV soap operas, and TV games parlors)
can be viewed as generic competitors. Marketers of canned juices, ice teas, and
sodas are considered product competitors. Producers/ marketers of various brands
of toilet soap or detergents are brand competitors.
Marketers have to determine which type of competition/ competitors it is
concerned with. According to this, they can identify, locate and study their
competitors, and take such information into consideration when designing their
marketing mix.
2. Competitive structure
Being aware of various types of competitive structures is also important to
marketers. In general, there are four types of competitive structures. They are:
monopoly, oligopoly, monopolistic competition and pure competition. Monopoly
is, “a competitive structure in which an organization offers a product that has no
close substitutes making the organization the sole source of supply. Oligopoly is
a competitive structure in which a few sellers control the supply of a large
proportion of a product. Monopolistic competition is a competitive structure in
which a firm has many potential competitors and, to establish its own market, tries
to develop a differential marketing strategy. Pure competition is a market structure
characterized by an extremely large number of sellers, none strong enough to
influence price or supply significantly”.8
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For instance, public utility companies (e.g., electricity, water…etc.)
operate in a monopoly competitive structure whereby there is only one company
in a country or a city that provides the utility. The automobile market in a country
like U.S.A. is characterized by an oligopoly competitive structure. Few
companies like GM, Ford, and Chrysler control the supply of a large proportion of
this product. Most industries nowadays such as home appliances, electric
products, and cleaners, operate within a monopolistic competitive structure.
Finally, pure competition can be found in case of very small producers of farm
products especially in underdeveloped and developing nations.
Undoubtedly, the competitive structure in which a certain firm operates
does influence its marketing activities in one way or another.
Usually, aside from the extreme cases of competitive structure (i.e.,
monopoly and pure competition), firms use several approaches to be able to
compete in the market. These approaches are generally classified into pricecompetition approaches and non-price competition approaches. The Vodafone
advertisement shown in Figure 3.1 below is an example of using price
competition to market the company’s product (i.e., mobile/cellular phone
services).
Source: Al-Ahram Newspaper-Egypt (March 20, 2003), p.21.
Figure 3.1: An example of using price competition
Several approaches can be used in non-price competition such as : product
quality and features, product innovation, after-sales services and warranty.
Technogas techno-Aman cooker shown in the advertisement in Figure 3.2 is an
example of using non-price competition (product features, especially providing
safety for children).
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Source: Rosa Al Yossef Magazine-Egypt (February 1:7, 2003), p.94.
Figure 3.2: Using non-price competition
Economic Environment
When studying and analyzing the economic environment, two major
variables have to be considered. These are the general state of the economy, and
buying power.
1. State of the economy
The state of the economy is usually determined by the stage in the
business cycle in the economy in question. The business cycle is “a pattern of
economic fluctuations that has four stages. These are prosperity, recession,
depression, and recovery. Prosperity is a stage of the business cycle characterized
by low unemployment and relatively high total income, which together cause
buying power to be high-provided that the inflation rate stays low. Recession is a
stage of the business cycle during which unemployment rises and total buying
power declines, stifling both consumer and business spending. Depression is a
stage of the business cycle when unemployment is extremely high, wages are very
low, total disposable income is at a minimum, and consumers lack confidence in
the economy. Recovery is a stage of the business cycle in which the economy
moves form recession or depression toward prosperity”.9
As can be inferred from the above definitions of the business cycle stages,
there is a number of economic indicators which are used to determine the stage
through which a certain economy is passing. These indicators are mainly the
unemployment rate, total income, inflation rate and people’s degree of confidence
in the economy.
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Of course, what marketers do in a certain stage of the economy business
cycle might change from what they do in another stage of a cycle. For instance,
during prosperity, marketers usually expand their offerings of products (e.g., a
larger number of products, several forms /styles of the same product, a wide range
of prices), whereas in recession, marketers have to be more concerned about the
functional features of the product(s), and might consider reducing product
forms/styles as well as price, since customers become more price conscious.
2. Buying power
Buying power is the other important economic variable that marketers
have to study and analyze. The buying power is determined by the various types
of resources (e.g., money, goods, and services) which can be traded in an
exchange, and therefore enables consumers to buy what they need or want. Thus,
the greater the buying power in a certain economy, the better the marketing
opportunities which exist in that economy. Income, credit, and wealth are
considered major sources of buying power. “Income for an individual is the
amount of money received through wages, rents, investment, pensions, and
subsidy payments for a given period”.10 Two types of income are of great
importance to marketers. They are disposable income, and discretionary income.
“Disposable income is after-tax income. 11 Discretionary income (is the)
disposable income available for spending and saving after an individual has
purchased the basic necessities of food, clothing and shelter”.12
Credit increases the consumers' purchasing power in a certain period of
time, since it enables them to spend future income at present or in the near future.
Wealth (is) “the accumulation of past income, natural resources, and financial
resources”.13
Income, credit, and wealth can be measured at the economy level or at the
individual level.
It is important to note that consumers’ buying power is affected not only
by income (disposable income, and discretionary income), credit and wealth, but
also by the inflation rates in the economy. Therefore, when inflation rates go upother things being equal-the purchasing power goes down. Of course, countries
differ not only in terms of the purchasing power, but also in terms of the inflation
rates which prevail in the country.
Inflation rates vary from one country to another and in a certain year(s).
For example, in the year 2002, the inflation rate in K.S.A was 1%, whereas it was
12.2% in Yemen.14
It is also important to note that marketers have to study and analyze not
only the consumers’ buying power, but also their willingness to spend.
Willingness to spend is “an inclination to buy because of expected satisfaction
from a product, influenced by the ability to buy and numerous psychological and
social forces”.15 Therefore, it is not sufficient that a consumer has buying power
but also he/she has to have the willingness to spend, which is partially influenced
by his/her buying power. However, other variables, mainly psychological and
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social variables, have significant influence on willingness to spend. Both
consumer’s purchasing power-ability to buy-and willingness to spend determine
the so-called “effective demand”. For example, a consumer might be able to buy
a Super Star Adidas sports shoes which is sold at more than L.E. 550 in Egypt.
However, he/she might not be willing to spend that much money on the brand,
and would rather buy an unknown brand of sports shoes which is sold at a price of
L.E. 40 or L.E. 50.
The Arab Bank advertisement in Figure 3.3 demonstrates how a marketer
can persuade a client to buy the product-in this case a service-by showing the
client that in the future, his/her buying power may not enable him/her to afford
several expenses such as school tuition and fees, or renting an apartment.
Therefore, he/she should better sacrifices some of the current needs in order to
satisfy the needs which will arise in the future. This means cutting a certain
amount of money every month from now on in order to increase his/her buying
power in the future, save now for the sake of the future.
Source: Rosa Al Yossef Magazine-Egypt (February 15-21, 2003), p.3.
Figure 3.3: Focusing on increasing the consumer’s buying power in
the future to persuade him/her to buy now
Political/Legal and Regulatory Environment
Political, legal and regulatory variables are closely interrelated
environmental components. Of course, a company which markets in an antibusiness political environment will definitely act in a different way when
compared with a situation where political officials are pro-business. The latter
situation would positively affect the legal environment. Political officials’
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attitudes towards and relationships with business organizations will result in either
supporting business laws which restrain companies’ activities in the market or
otherwise, i.e. supporting laws in favor of business firms. These must have
organizations or agencies to enforce them. Such agencies can be established by
the government –i.e., governmental/regulatory agencies-or by other parties
involved in or affected by marketing including self-regulatory agencies such as
those formed by the business organizations themselves.
1. Political environment
Organizations have to build and maintain good relationships with political
officials, since these relationships can positively influence officials, in regards to
business laws and regulations which can become less restrictive and work in favor
of these organizations. Good relations with political officials would also benefit
firms, since purchases of governmental organizations of different types, are
voluminous and usually represent a large portion of market demand for most
products.
In addition, business organizations can benefit from good and strong
relationships with political officials in the area of international marketing. Such
officials can help these organizations to extend their activities to foreign markets.
Therefore, marketers should do their best to establish and build good
relationships with political officials through such approaches as: contributions to
certain political candidates’ election campaigns-like the case in U.S.A-whether
directly or indirectly, greetings and complimentary advertisements in certain
occasions, inviting them to visit the organizations, sponsoring certain events of
interest to such political officials, and/or some other public relations activities
which could enhance such relationships.
2. Legal environment
Companies operate within a certain legal environment. This environment
consists of laws which govern marketing practices, influence them, and should be
taken into consideration when formulating marketing strategies and making
marketing decisions. These laws are basically of two types : (1) to protect
business firms from malpractice of other firms in the market place, through
preserving and protecting competition, and (2) to protect consumers from
malpractices of business firms. The two types of laws are highlighted below.
a. Pro-competitive laws
The purpose of pro-competitive laws is to preserve competition.
Therefore, they seek protecting business firms from malpractices among each
other, which might hurt them and, in turn would have negative effects on
consumers. Malpractice of firms could cause some of them to go out of businessending up with a monopoly state in the market. This would, in most cases, be
against consumers’ interests and benefits.
Countries vary in terms of the number of laws which aim at preserving
competition, the rationale behind each law, and the specific purpose of each law.
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For example, in a country like the U.S.A., there are several major federal laws
concerning competition such as: the Sherman Antitrust Act of 1890, which
prohibits any action that restrains trade or leads to a state of monopoly in the
market. The Clayton Act of 1914, which prohibits specific business practices-such
as exclusive dealer agreements, and price discrimination-which significantly leads
to lessening competition or creating a monopoly. The Celler-Kefauver Act of
1950 prohibits any firm involved in commerce from acquiring the whole or part
of a stock, or other shares of assets or capital from another firm when this results
in a substantial negative effect on competition-i.e. lessening competition-or
creating a state of monopoly.
In the Arab Countries, there are also laws which aim at preserving
competition. For example, in Kuwait, there is Law No. 68 (1980) which
organizes competition in the area of trade and which prohibits monopoly. In
Egypt, there is the Antitrust and Competition Law, which has been a draft
discussed by Marketing and Legal Affairs Committees of the Egyptian parliament
(The Peoples’ Council). This law attempts to incorporate previous laws and their
amendments, update them, and avoid any deficiencies that arose when attempting
to impose them in the past.
b. Consumer protection laws
Consumer protection laws have mostly been issued in reaction to
malpractices of business firms which might cause harm to consumers, whether
health wise, money wise or other. Examples of such malpractices are the
marketing of products which when used would threaten consumers’ health or
safety, advertising deception, invading consumers’ privacy, unreal price
reductions and dealing in counterfeit products.
Therefore, these laws aim primarily at protecting consumers. Despite the
fact that most of these laws have been issued to handle actual cases in which
consumers need protection, they can be viewed as a means which contributes to
preventing marketing malpractices, especially in the long-term.
In most countries worldwide, consumer protection laws do exist.
However, their enforcement vary from one country to another.
In a country such as U.S.A., a relatively large number of these laws exist.
Examples of these laws are: Fair Packaging and Labeling Act of 1966 that
prohibits deceptive or unfair packaging or labeling of consumer products. The
Trademark Counterfeiting Act of 1980 that outlaws dealing in counterfeit
products that can threaten consumers’ health or safety, and Nutrition Labeling and
Education Act of 1990 (which prohibits exaggeration in health claims and
requires all processed food products to have labels which contain nutritional
information).
In the Arab countries, several consumer protection laws also exist. For
example, in Egypt, there is the Anti-Deception and Fraud Law No. 48 (1941),
which has been subject to several amendments ended up as Law No. 281 (1994).
In K.S.A., there is Anti-Deception in Trade System, issued by the Royal Decree
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No. 11 in 1983 (1404 Hejrey). In Kuwait, there is the Law No. 20 of 1976 which
prohibits deception in commercial transactions, and in Qatar the Consumer
Protection Law issued by the Sultani Decree No. 81 in 2002.
As previously indicated, there are some variations among countries
concerning enforcement of consumer protection laws. In some counties such as
the U.S.A. and a number of European countries, such laws are highly enforced.
However, in other countries like Arab countries, there is evidence to support the
notion that in some cases and practices, these laws are not enforced as they should
be.
It is worthwhile to note that one of the forces which have played a key role
in passing and enforcing consumer protection laws and regulations in foreign
countries is the consumerism movement(s), especially in U.S.A. and in some
European countries. Consumerism can be defined as the voluntarily organized
efforts of individuals, interest groups, and organizations to protect consumers
from malpractices of business firms in the market. This movement has been very
active in U.S.A. Its efforts have resulted in a number of laws, which regulate
certain marketing activities, especially in the area of products.
For example, when consumers complained about child-proof medicine
containers, which seemed to be adult proof too, (e.g., in case of old patients who
might have a hard time to open such containers), the Consumer Product Safety
Commission (a government/federal regulatory agency) imposed new packaging
standards. Manufactures have to abide by such standards which make it possible
for adults to open medicine containers designated as child-resistant within-a
maximum of-five minutes, whereas children must be unable to open such
containers.20
In Arab countries, the consumer movements usually take an association
form, referred to as Consumer Protection Associations. This is valid for such
countries as: Jordan, Egypt, Algeria, Morocco, U.A.E., and Yemen. In addition,
the Arab Union for Consumer Protection was initiated during the First Arab
Conference for Consumer Protection held in the Arab League Headquarters on
April 7, 1997. This consists of Consumer Protection Associations from a number
of Arab countries such as Egypt and U.A.E.
Despite existence of these consumer protection associations in the Arab
World, they are still not active enough in protecting consumers’ rights.21
Of course, marketing managers have to be aware of the laws which govern
their marketing activities, as well as the various forces behind the pressure for
more and more laws and regulations in this respect (especially in the area of
consumer protection along with various concerned parties). They must stay up-todate with these laws and related regulations, and do their best not to violate them.
Otherwise, they may find themselves in trouble, which would have a negative
impact on their marketing activities.
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3. Laws-enforcement organizations
As previously stated, laws which regulate marketing practices have to be
enforced by certain organizations. There are two types: government regulatory
organizations, and self-regulatory organizations.
a. Government regulatory organizations
Government regulatory organizations enforce laws that are related to
marketing practices (e.g., product design, pricing, advertising and distribution). In
addition, they can establish some operating regulations/rules as guidelines for
certain marketing practices in general or in a specific industry. For example, the
Federal Trade Commission (FTC) in the U.S.A. (which has a significant impact
on most marketing practices there) has established criteria for deceptive
advertising based on the lawsuit cases filed in this area of marketing practices.
In a country like U.S.A., there are several major government/federal
regulatory agencies such as: the FTC, the Food and Drug Administration (FDA),
the Environmental Protection Agency (EPA), and the Consumer Product Safety
Committee (CPSC). As indicated above, the FTC has access to many marketing
practices. However, most of other agencies’ enforcement power is limited to a
certain marketing area(s). For example, the CPSC is concerned with the product
area, and aims at protecting consumers from unreasonable risk of injury from the
products they use, which is not covered by other government regulatory agencies.
In the Arab Countries, certain ministries or departments in ministries play
the role of the government regulatory agencies, especially in the area of consumer
protection. For instance, in Egypt, there are such organizations/agencies as: the
Public Agency for Exports and Imports Control, Ministry of Trade – as of late has
been combined with Ministry of Industry to form one ministry, (Ministry of Trade
and Industry), the Public Agency for Pharmaceuticals’ Control- and the Public
Agency for Standardized Unification. In Syria, there are also similar
organizations/agencies such as the Agency of Specifications (established by the
law No. 248 in 1969), Ministry of Supply and Internal Trade, Ministry of
Industry, and Ministry of Health. In Kuwait, there is the Department of Consumer
Protection at the Ministry of Finance and Economy.
b. Self-regulatory agencies
Since intervention by government regulatory agencies would cause harm
not only to the organization in question but also to other organizations in the same
industry, business organizations attempt to avoid such intervention by establishing
self-regulatory agencies. These agencies usually develop guidelines for marketing
practices in such a way as to avoid violating business laws and regulations. For
instance, the Water Quality Association based in U.S.A. has established a
comprehensive Code of Ethics to help firms that sell water purification
equipment, and avoid illegal as well as unethical practices.
Several self-regulatory agencies have been established in the U.S.A.
Among the most well known of these are: the Better Business Bureau (B.B.B),
and the National Advertising Review Board (NARB). The BBB is a local, non-
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government regulatory agency, supported by local businesses, which handle
problems and conflicts between customers and certain business firms. NARB is a
self-regulatory organization, which challenges issues raised by the National
Advertising Division concerning advertisements.
In the Arab World, self-regulatory agencies usually take such forms as
chamber of a certain type of business (e.g., the Chamber of Commerce and the
Chamber of Industry in a country like Egypt, and the Chambers of Commerce and
Industry in Countries like Kuwait and K.S.A), and associations or syndicates of
professionals as doctors, lawyers, engineers, and business schools graduates.
However, business firms in the Arab world need to establish more self-regulatory
agencies similar to those established in other countries, especially the U.S.A. For
example, advertising agencies in a country like Egypt can establish a board,
council or similar organizational entity which would develop a code of ethics for
its members. It would examine and review advertisements which are considered to
be controversial, from a legal viewpoint, and defend the advertisements designed
and administered by its members, in cases where they are criticized or subject to
lawsuits filed by a person or an organization.
Technological Environment
Technology refers to applying knowledge and tools to handle specific
problems and perform tasks in a more efficient manner.22
Recently, the world has witnessed a large number of technology-based
advances such as compact discs, fax machines, personal computers, cellular
phones, contact lenses, the Internet, robots and diet foods.
Technology is characterized as being highly dynamic. Technological
advancements occur on a continuous basis. Therefore, what is considered as a
significant technological advancement at a certain period of time may not be
considered as such in another period of time. For example, black and white TV
sets were a remarkable outgrowth of technology and were viewed as one of the
most remarkable and significant technological advancements when they were
introduced for the first time. However, nowadays they are considered old fashion
or out-of-date products, from a technological standpoint.
Technological advancements take place as a result of intensive and
extensive research done by concerned organizations such as universities,
government research agencies/centers, and business firms.
These technological advancements affect both customers and marketers.
Therefore, marketers have to be concerned about technology in one way or
another.
Technology influences how people satisfy their needs and wants and
consequently, their behavior as customers/buyers of products.
As a result, marketers can initiate technological changes through their
Research and Development (R & D) departments. Or they can make use of such
changes/advancements which take place in their countries or in other parts of the
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world. This would be reflected by introducing new products, modifying existing
products, and using technology to persuade potential customers to buy their
products. Figure 3.4 demonstrates how a marketer of a cellular phone brand can
use the advanced technology as an important appeal to influence consumers
preference to it over other brands.
Source: Al Qabas Newspaper-Kuwait (February 12, 2004), p. 15.
Figure 3.4: Using advanced technology to promote a product
Marketers can also benefit from technological advancements in computers
and the Internet. The Internet, for example, provides marketers with great
opportunities to sell their product, using electronic marketing, which enables them
to cover a large number of markets-whether domestic or international-at a
relatively lower cost, when compared to the conventional marketing methods.
Amazon.com (known as the biggest bookstore on earth) has been a pioneer in
marketing products on the Internet.
Undoubtedly, technology has enabled marketers to be more productive,
accomplish their objectives, and better at competing with other marketers. Think
of such technological advancements which have resulted in Automatic Teller
Machines (ATMs) used by banks in a number of banking services, electronic
scanners used by cashiers at retailing stores, electronic devices and computers
utilized in marketing research, and technological advancements in mass media
used in advertising. These are just a few examples of how technology has
contributed to marketing.
Of course, not all business organizations can act as leaders in technology,
by initiating a technological advancement, since, as previously indicated, this
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68 Chapter 3 : The Marketing Environment
requires intensive research which is costly. Therefore, large companies (such as
Proctor & Gamble, Boeing, Microsoft, 3M, and Texas Instruments) can act as
leaders in this respect, while other small business firms are usually followers.
As is the case when making any business-related decision, the decision to
initiate, adopt, or even imitate a certain technology needs to be based on the
results of a cost/benefit analysis approach. This is usually referred to as
“technology assessment.” Of course, if the benefits associated with such a
decision outperform its costs, then the firm can decide in favor of utilizing the
technology in question (whether initiating, adopting or imitating it), and vice
versa. One of the most important variables to consider in such an analysis is the
extent to which the business firm can protect its technologically advanced product
by getting a patent for it (i.e., whether the product satisfies the requirements to be
granted a patent). Also, it reflects the extent to which such a product can be
copied or imitated by other firms with no violation of its patent.
Demographic Environment
The demographic environment23 reflects the population size and
characteristics of a certain market. It is logical to assume that the larger the
population size-other things being equal-the greater the marketing opportunities
available for most business organizations to market their products. More
consumers also implies a greater demand for a large number of different consumer
products, and vice versa. Population characteristics also influence marketing
activities. Demographic characteristics such as: age, marital status, education and
gender significantly influence behavior of people either as individuals or as
groups. The way in which people live and the products they buy and/or use are
influenced by these characteristics. Such characteristics change over time.
Therefore, they have to be traced-by marketers-over time, since they might
represent opportunities available to or threats facing marketing.
For example, recently, more than 30% of the U.S. population fell into the
old age category (55 years and up).24 This means that the demand of such a group
of people for products related to tourism, health care, and recreational activities
will significantly increase.
In the Arab world, countries differ in both the population size and in their
population demographic characteristics. Table 3.1 contains population and
demographic data of Arab countries in year 2003.
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Table
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70 Chapter 3 : The Marketing Environment
These characteristics have an impact on marketing in one way or another.
For example, in countries such as Kuwait, U.A.E. and Qatar where the proportion
of males is noticeably greater than the proportion of females (about 60%, 60% and
66% in the three countries, respectively), there are more opportunities available
for marketers in each country to market products consumed by males (shaving
creams, after-shave-lotions and men’s footwear), as compared to such
opportunities in countries where such a proportion is less, like Lebanon where the
proportion is less than 49%. As far as education is concerned, marketers in
countries like Jordan and Bahrain, in which the percentage of the educated people
is very high (91% and 89%, in the two countries, respectively), marketers in each
country will have greater opportunities to market products bought by educated
people (such as books and encyclopedias). They can effectively use advertising
media to which most educated people are exposed (newspapers and magazines)
compared to marketers in other countries such as Somalia and Iraq where the
proportion of the educated people is less (38% and 40%, in the two countries,
respectively).
The reader can further examine Table 3.1 and reach several conclusions
concerning population characteristics in Arab countries and think of how such
characteristics influence marketing practices in each country.
As previously stated, marketers have to keep an eye on such characteristics
and identify the changes which are taking place at a certain point in time or
expected to occur in the future, and take them into consideration when performing
various marketing activities in the specific country in question.
Sociocultural Environment
The sociocultural environment consists of the social values, norms,
customs and traditions as well as culture, which identify a certain society and
differentiate it from other societies. The socio-cultural environment of a country
like the U.S.A, is different from a country like England or Jordan. The variables
which constitute the socio-cultural environment influence not only how people
live, but also the products they buy, the way they buy, the place from which they
buy and when they buy, and in many cases, why they buy. Therefore, marketers
have to study and analyze such an environment and take it into consideration in
their marketing strategies and decisions, otherwise, they could get themselves into
troubles.
The Melamine TV commercial, presented in the beginning of this chapter,
is a good example of how a company can hurt itself by ignoring,
misunderstanding or underestimating the sociocultural environment in which it
practices marketing.
The socio-cultural environment, like any other environment, is subject to
change over time. For example, a long time ago, there was not that much concern
about overweight problem in a country like Egypt. Moreover, being overweight
was used as an indicator of not only wealth but also health. At that time, some
marketers made a fortune by selling products, which help people, especially
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women- since obesity was viewed as one aspect of beauty-gain weight. One of the
most well known of these products was Kharas El-Baqar, in English “Cow
Beads.” There was no way at that time to market diet food products or products
which help people lose or control weight. However, over the passage of time, and
for several reasons, people have become both aware of the risks and problems
associated with being overweight, and are concerned about controlling their
weight. As a result, several products which are associated with weight control
have penetrated the market ( e.g., Xenical for fat control, low colary food products
and diet drinks), and it is common to see advertisements about products which
help the consumers reduce their weight like the ad shown in Figure 3.5 below.
Source: Al Gumhoria Newspaper- Egypt (June, 17, 2004), p.19.
Figure 3.5: Advertising a product which reduces weight
The way a society views and values education is another sociocultural
variable. If marketers realize that people in the environment where they operate
appreciate education, since education is associated with social status, this would
create opportunities to establish private schools, institutes and universities. In
addition, using highly educated persons to promote products, whether in
advertising or personal selling, would result in a greater likelihood to persuade
customers to buy the product being promoted.
The tendency of people, in a certain society, to be socially liberal or
conservative is another dimension of the sociocultural environment. In a socially
liberal country like U.S.A., informal relationships between a male and a female
who are not formally engaged or married are more acceptable, than in
conservative societies, like the majority of the Arab world countries, where these
relationships are not usually accepted. Therefore, while a marketer of gifts in the
US can explicitly state in the advertisement that the product is the best gift for a
boyfriend or girlfriend, a marketer of a similar type of product can not do that if
he/she operates in a conservative society.
The above are but few examples of how the sociocultural environment
influences marketing practices.25
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72 Chapter 3 : The Marketing Environment
Summary
The marketing environment is the topic of this chapter. The marketing
environment encompasses all external variables surrounding an organization
which operates in a certain country or society. It consists of a number of subenvironments/components which are the competitive, economic, political/legal/
regulatory, technological, demographic and sociocultural environments.
These marketing environments influence the marketing activities of
different business, and non-business organizations as well. Therefore, marketers
have to be aware of such environments as they exist, be able to project the
changes which are expected to take place in the future, and take these into
consideration when formulating marketing strategies and making marketing
decisions.
Environmental scanning and environmental analysis are two major
processes which would help in this respect. Environmental scanning is a process
of collecting data about various components which constitute the marketing
environment. These data have to be assessed and interpreted through the
environmental analysis process. Since the marketing environment is characterized
as being dynamic, environmental scanning and environmental analysis have to be
performed on a continuous basis.
Based on the results reached through these two processes, marketers can
decide how to respond to many variables constituting the marketing environment.
Two approaches can be used in this respect, to accept the environment as it is,
and attempt to adapt to it, or take the initiative to influence it through marketingrelated or other decisions, actions, strategies, etc.
Of course, no matter how an organization responds to the marketing
environment, it has to be familiar with all of its components and their influence on
its marketing activities.
The competitive environment is the first environmental variable presented
in this chapter. Competition is defined, along with presenting various types of
competition/competitors (total budget, generic, product and brand competition/
competitors). Of course, the type of the competition faced by a marketer will have
an impact on the way through which marketing activities are performed. Then,
various types of competitive structures (monopoly, oligopoly, monopolistic
competition and pure competition) are presented. Such a structure definitely
influences marketing practices.
The economic environment consists of two major variables which have to
be scanned and analyzed. These are the general state of the economy and buying
power. The state of the economy can be judged through the stage of its business
cycle. These stages are prosperity, recession, depression, and recovery. Several
indicators can be used to determine the stage. They are mainly unemployment
rate, income/buying power, and consumers’ confidence in the economy. Several
variables determine consumers’ buying power. They are income, disposable
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income, discretionary income, as well as credit. The existence of buying power
is a necessary but not sufficient condition to create the effective demand for
products in the marketplace. It has to be accompanied by consumers’ willingness
to spend. Such willingness is partially influenced by the ability to buy as well as a
number of social and psychological variables.
Political/legal and regulatory environment is one of the important
components of the overall marketing environment. Marketers must build and
maintain good relationships with political officials through a number of
approaches such as contribution to their election campaigns or public relations’
activities. The legal dimension is also critical to marketers. They have to be
aware of various laws which regulate marketing practices. These laws can be
classified into two groups those that protect business organizations from
malpractice of other businesses, which might negatively affect competition, and
those that protect consumers from malpractice by business firms.
These laws vary in number, related marketing practices, and enforcement
from one country to another. However, more laws, which tackle numerous areas
of marketing practices, exist in foreign countries, especially in a country like the
U.S.A., compared to such laws in the Arab countries. It is important to note that
the consumerism movement in foreign countries is considered one of the major
forces behind passing and enforcing such laws. Despite the fact that consumerism
movements exist in most of the Arab countries, their role in either influencing
consumer protection laws and regulations or enforcing them is still limited, and
more efforts are needed to activate this role. These laws and regulations are
enforced by two types of regulatory agencies, government regulatory agencies
(e.g., FTC and FDA in U.S.A.), and self-regulatory agencies (e.g., the BBB and
NARB in U.S.A.).
The fourth type of marketing environment is the technological
environment. Technology involves applying knowledge and tools to handle
specific problems in a more efficient manner. Technology is highly dynamic and
is an outgrowth of intensive and extensive research of organizations such as
universities, business firms, and government agencies. It influences the way in
which people satisfy their needs and wants and, consequently, their buying
behavior. Technology can open new avenues for marketers. However, it could be
one source of threats or challenges.
The demographic environment is also an important factor which has to be
considered by marketers, since population size and characteristics (e.g., age,
education, marital status, and gender) influence marketing activities.
Finally, the sociocultural environment, including such variables as social
values, has to be also scanned and analyzed. Marketers can benefit from
understanding this environment either in terms of adapting to it or, avoiding a
situation in which a conflict arises between what is prevailed in the society and
marketing actions. In addition, they can use the marketing activities to change or
reshape such an environment. However, changing or reshaping the sociocultural
environment is not as easy as viewing it as an uncontrollable force and attempting
to adapt to it.
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74 Chapter 3 : The Marketing Environment
Important Terms
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Environmental scanning
Environmental analysis
Competition
Total budget competitors
Generic competitors
Product competitors
Brand competitors
Monopoly
Oligopoly
Monopolistic competition
Pure competition
Business cycle
Prosperity
Recession
Depression
Recovery
Buying power
Income
Disposable income
Discretionary income
Wealth
Credit
Patent
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Willingness to spend
Federal Trade Commission (FTC)
Consumerism
Consumer protection associations
Better Business Bureau (BBB)
National Advertising Review Board
(NARB)
Professional syndicates
Chamber of Commerce
Technology
Technological advances
Demographic environment
Uncontrollable environment
Inflation rate
Government regulatory agencies
Self-regulatory agencies
Pro-competition laws
Arab Union of Consumer
Protection Associations
Sociocultural values
Conservative societies
Liberal societies
Discussion and Review Questions
1.
Define the following terms:
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Competition
Oligopoly
Business cycle
Discretionary income
Technology
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Recession
Buying Power
Willingness to spend
Consumerism
Uncontrollable environment
2.
Discuss briefly the concept of the marketing environment, and demonstrate
how such an environment is very important to business organizations,
concerning marketing.
3.
“The competitive environment has a significant impact on marketing
practices”. Discuss this statement and provide examples to clarify and/or
support your discussion.
4.
“Marketers have to scan and analyze the economic environment in order to
be effective in their marketing activities”. Discuss this statement in detail.
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5.
“Although the technological environment and the socio-cultural
environment can be viewed as two separate types of the marketing
environments, they are interrelated and have mutual influences”. Discuss
this statement along with giving examples to support your answer.
6.
What is meant by the demographic environment? Does this environment
create opportunities or challenges/threats to marketers? How?
7.
What is meant by the sociocultural environment? How does this
environment influence marketing practices? Does the sociocultural
environment in your country witness certain changes? If “Yes”, what are
these changes? How do they influence marketers?
8.
Is it possible that environmental scanning and analysis could reveal that
there is an opportunity available for marketers in a certain environment and
a threat/challenge is to be expected? How could this happen? If it happens,
what would you do, assuming that you were one of such marketers?
9.
Should the various components/variables of the marketing environment be
considered as being uncontrollable? Why? Can a marketer influence such an
environment? If yes, then how and if no, then why not?
Application Questions
1.
Select a certain industry in your country. Then answer the following
questions:
a. What type of competitive structures does this industry operate within?
Why ?
b. Who are the brand competitors in this industry?
c. How can one of these brand competitors differentiate him/herself from
other competitors?
2.
Suppose that a personal computer producing company has conducted an
environmental scanning and analysis, and has identified a number of trends
in various components of the marketing environment. These trends are listed
below. Examine each of these trends, then determine whether it can be
considered an opportunity or a threat to that company and list the reasons
behind that.
a.
Entry of a number of new personal computer producing companies.
b.
Economic indicators lead to the conclusion that the economy is passing
through a prosperity stage of its business cycle.
c.
There is a number of laws expected to pass which aim at protecting
consumers from malpractice by personal computer producing
companies.
d.
Technological advances in the personal computers’ industry occur
continuously and rapidly.
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76 Chapter 3 : The Marketing Environment
e.
People in the society, view the person who does not know how to use a
computer and/or who does not have a computer at home as an illiterate
person.
3.
Going back to question no. 2 show how the computer producing company
can benefit from the trend that represents an opportunity or face a trend
which is considered-according to your answer to question 2- as a threat to
the company.
4.
Is there a consumer protection association in your country? If, yes, do you
think that it plays an effective role in protecting consumers? Why? If the
answer is no, what should be done to form such an association?
5.
Contact a marketing manager of one of the industrial companies in your
country to arrange for an interview with him/her. The purpose of the
interview is to collect data about how the company deals with and responds
to its marketing environment. Based on the data acquired from this chapter,
do you think that the company is successful in this respect or not? Why?
(Note: you may write a brief report to answer this question).
< <Cases
Case 3.1
The Public Company for Leather Products and Industries*
The Public Company for Leather Products and Industries is a pubic-sector
Libyan company. The manufacturing of shoes represents a large portion of the
company’s manufacturing activities. About 83% of the factories (20 out of 24)
manufactures shoes, with forty six production lines out of fifty. On December 31,
2000, value of inventory of shoes was about L.D. 34 million, whereas the value of
production during that year was about L.D. 27 million. The value of company’s
sales of shoes was about L.D. 14 million. Sales decline started in year 1999 (sales
declining reaching 34%) and the decline reached about 57% in 2000.
The decline in the company’s sales of shoes was attributed to the intense
competition from the imported shoes.
A research study was done to measure the extent to which the imported
shoe products competed with the company’s shoe products, as well as the
competitive advantages of the imported products. The study revealed that the
*
< Extracted from :
-
Hasan Ali Haman, “Foreign Competition and Its Impact on Sales
of Domestic Industries in the Libyan Market”, Proceedings of the
Second Arab Conference, Marketing in the Arab World:
Opportunities and Challenges, Arab Administrative Development
Organization, Doha, Qatar (October 6-8, 2003), pp. 145-180.
<<
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majority of consumers preferred imported shoes over the company’s shoes. The
reasons for their preference of imported shoes were as follows:
(a) quality of materials (about 47%), (b) good style/design (40%), (c)
good packaging (about 10%), and (d) low prices (about 6%). In addition, 25% of
the consumers indicated that all these reasons were behind their preference of
imported shoes.
The study also revealed that the majority of consumers were not satisfied
with the company’s shoes in general.
The research study has concluded that the intense competition from
imported products caused the company’s sales to go down. In addition, the
company should improve and enhance its shoes in order to be able to compete
with foreign shoes which were marketed to the Libyan market.
It is worthwhile to indicate that the company’s sales were increasing
before 1999. For example, in 1996, the company’s sales value increased by 8% as
compared to the sales value in 1995, and in 1997, the sales also increased by
about 8%, whereas the increase was about 13% in 1998.
It is logical to conclude that unless the company takes some actions to face
competition from imported/foreign shoes products, its sales value will continue to
decline.
Questions for Discussion
1. Why was the company successful in the marketing of its shoes in the Libyan
market before the year 1999?
2.
Can the company change the environment within which it is operating or
not? Why?
3.
If the answer to question number (2) above is yes, explain how the company
can do that. If the answer to this question is no, what should the company do
in order to adapt to its competitive environment?
Case 3.2
Sainsbury’s
Sainsbury’s, a British supermarket chain stores, entered the Egyptian
market for the first time in the late 1990's. It started up with one store in the AlHaram district in Cairo.
It is very well known that Sainsbury’s target market is middle class, or
below middle class, consumers. Therefore, low price-along with other elements
such as product assortment and good service- is considered the key element in its
marketing strategies, especially in a market like Egypt, where most consumers are
price-sensitive.
In order to be able to sell at low prices, compared to other supermarkets in
Egypt, Sainsbury’s had to use all possible approaches to reduce its costs. Among
these approaches were : choosing factories which were operating at a low capacity
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78 Chapter 3 : The Marketing Environment
utilization rate (about 35%) and buying large quantities of products in such a way
that these factories were able to utilize, almost, all their capacity (i.e., about 100%
capacity utilization rate). These factories produced under Sainsbury’s name and
sold the products to it at a very low price, since their costs were low. As a result,
Sainsbury’s costs were very low, and, consequently, it was able to sell to
consumers at low prices too.
In addition, it did not own its stores, it rented them. Therefore, it made no
capital investments in such stores, and the rent was not high. This contributed to
reducing its costs. It also used specialized transportation companies, rather than
owning its own transportation envoy, guaranteeing them continuous operations.
As a result, its transportation costs were low as well.
Sainsbury’s effectively used promotion. It widely advertised especially in
newspapers, its store staff was very helpful to consumers, it used special offers
frequently, and particularly on special occasions, such as Mother’s Day and
Valentine’s Day.
In order to make it easy for consumers to pay for their purchases and
reduce their waiting time, a relatively large number of cashiers were available.
Sainsbury’s was highly successful in the Egyptian market. As a result, it
started to open a number of stores in other locations such as Mohandseen,
Zamalek, and Nasr City. The number of Egyptians who were employed by it was
about 4500 persons. It was a strong competitor in the market. It was so strong
that a number of Egyptian businessmen, who owned and/or managed similar
supermarkets, asked the Egyptian Government to do something about Sainsbury’s
prices namely to put pressure, or to persuade its management to raise the prices a
little. They claimed that if Sainsbury’s continued to sell at those very low prices,
some Egyptian supermarkets would not be able to compete and might go out of
business.
Sainsbury’s continued to succeed day after day. Consumers were
satisfied, and everything was going in the right direction. After a while, a rumor
rapidly spread over the market and was believed by almost every Egyptian. The
essence of the rumor was that Sainsbury’s is owned by businessmen who belong
to a state that is considered an enemy not only to Egypt, but also to the Arab
countries. As such, Sainsbury’s owners’ objective was to hurt Egyptian
businessmen and drive them out of business. Consequently, it would be able to
manipulate the market and would also cause harm to consumers as well as the
economy.
Despite the fact that these notions were un-true, and the attempts by
Sainsbury’s management to counter such a rumor, it was accepted, believed, and
reflected on consumer buying behavior concerning that supermarket. More and
more consumers boycotted the stores and they used the word-of-mouth to
persuade others to do the same. Being unable to handle such a rumor, as well as
the radical decline in its sales, Sainsbury’s supermarkets were not able to continue
in the Egyptian market. The business was terminated, and it got out of the
Egyptian market.
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Questions for Discussion
1. When entering the Egyptian market, was Sainsbury’s management able to
understand and appreciate the environmental forces in this market and why?
2. In your opinion, what was (were) the source(s) of the rumor in question and
why?
3. What were the reasons behind Sainsbury’s failure to face the rumor?
4. If you were in the position of Sainsbury’s management, what would you have
done to handle that situation?
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80 Chapter 3 : The Marketing Environment
Chapter (3) Notes
1.
For more details about various sources of data and the marketing
research process, see Chapter (6) of this book on marketing research.
2.
William M. Pride and O.C. Ferrell, op., cit. p. 55.
3.
For more information about using environmental scanning and
analysis in planning, especially, strategic planning, see:
4.
-
Ibid., Chapter (2) Strategic Planning.
-
Chapter (15) Marketing Planning.
For more details about the proactive approach to the marketing
environment, see:
-
5.
P. Varadarajan, Terry Clark, and William M. Pride,
“Controlling the Uncontrollable: Managing Your Market
Environment”, Sloan Management Review (Winter 1992), pp.
39-47.
The main reference for both types of competition and competitive
structures which are theoretically presented in this section is :
- William M. Pride and O.C. Ferrell, op., cit., pp. 57-59.
6.
Ibid., p. 57.
7.
Ibid., pp. 57-58.
8.
Ibid., pp. 58-59.
9.
Ibid., pp. 60-61.
10.
Ibid., p. 61.
11.
It is important to note that in some Arab Countries such as Kuwait,
U.A.E., and K.S.A., no income taxes are deducted from people’s
income.
12.
William M. Pride and O.C. Ferrell, op., cit, p. 61.
13.
Ibid., p. 61.
14.
For more information about inflation rates as well as other information
related to economic indicators (e.g., GDP and unemployment rate) in
the Arab World in the year 2002, the reader can refer to the following
internet sites :
- www.unicef.org.
- www.emro.who.int.
- www.earthtrend.wri.org.
- www.prcdc.org.
- For more information about these indicators in the late Nineties
of the 20th Century, see :
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-
Statistical Abstract for Arab Countries (Cairo, Egypt : The
Arab League, 1999).
15.
William M. Pride and O.C. Ferrell, op., cit., p.62.
16.
For more details about these criteria, see : for instance :
-
D. Cohen, “The Concept of Unfairness as Relates to
Advertising Legislation”, Journal of Marketing, (July, 1974),
pp. 8-13.
-
R.E. Wilkes and J.B. Wilcox, “Recent FTC Actions :
Implications for Advertising Strategies”, Journal of Marketing
(January, 1974), pp. 55-61.
17.
William M. Pride and O.C. Ferrell, op., cit., p. 67.
18.
Ibid.
19.
Ibid., p. 74.
20.
“Better Child-Resistant Packages on the Way”, Consumer Reports
(June 1992), p. 567.
21.
This conclusion was reached by the author of this book after reviewing
literature related to consumer protection from marketing malpractices
in the Arab world, as well as his experience gained through living in
countries like Egypt, Kuwait and U.A.E or visiting other countries
such as Jordan and Bahrain for short periods of time.
22.
This definition is adapted from the definition used in :
- William M. Pride and O.C. Ferrell, op., cit., p. 68.
23.
Some marketing academicians (see-for instance-Ibid., p. 71) deal with
the population demographic characteristics as one of the sociocultural
components. However, other academicians, one of whom is the author
of this book, prefer to discuss it as a separate marketing environment.
24.
Bureau of Census, Statistical Abstract of the United States 1997
(Washington, D.C.: Government Printing Office, 1997).
25.
The socio-cultural variables are discussed in more detail in Chapter (4)
of this book entitled : Studying and Analyzing Consumer Behavior.