Slide 1
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 2
THE MAIN PURPOSE OF THIS CHAPTER IS
THINKING ABOUT NEW OPPORTUNITIES IN
THE DIFFERENT ENVIRONMENTS
• OBJECTIVES AND RESOURCES OF THE FIRM
•
•
•
•
COMPETITIVE ENVIRONMENT
ECONOMIC / TECHNICAL ENVIRONMENT
POLITICAL / LEGAL ENVIRONMENT
CULTURALC / SOCIAL ENVIRONMENT
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 3
The Marketing Environment
• The “environment” is constantly
changing and it is creating, and,
destroying business opportunities
translation - “there are now many people
from different countries and different
cultures that all live together - these
people all have different opinions about
stuff”
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 4
Figure 2.1 Components of the Marketing Environment
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 5
The Competitive Environment
• The Interactive process that occurs in the
marketplace in which competing
organizations seek to satisfy markets.
• When companies develop a marketing plan
that includes some new product, and new
advertising - the consumer reaction has an
effect on other companies trying to sell the
same stuff
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 6
The Competitive Environment
In many areas of business, competition is tough
and intense
• fast food
• entertainment
• consumer products ie. Cars, clothing
• companies are very sensitive to the
marketing actions of their competitors and try
to counteract this with their own innovative
marketing
eg. Coke vs. Pepsi, Wendy’s vs. Macdonalds
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 7
Types of Competition
(competition comes from 3 different
sources)
• inter-product
• product substitute
• alternative gratification
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 8
Types of Competition
inter-product
• competition among marketers of similar
products
•competition can be national, or international
•eg. Different companies elling cross training
shoes (Reebok, Nike, Brooks)
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 9
Types of Competition
product substitute
• competition among marketers of products
that can be substituted for each other
•Aluminum beer cans vs. steel beer cans
•Paper bags vs. plastic bags
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 10
Types of Competition
product substitute
• Sometimes when a new technological
development allows for lower production
costs, new products will come into the market
and compete with other older previously
established products
•eg. Wood 2x4s and steel 1x3s
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 11
Types of Competition
alternative gratification
• All firms are competing for the consumers
wallet
•ie. Reeboks or Nike cross trainers (inter-product)
•Reeboks cross trainers vs. Hi-tec sandals (product
substitute)
•Shoes vs. hats (alternative gratification)
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 12
Competition
Remember that when any new product is launched, you
have to monitor the customer’s reaction in order to
make any changes to the features.
At the same time remember that all your competitors will
also buy the product to take it apart and see in detail
what special components you incorporated into the new
design.
- reverse engineering
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 13
Objectives Should
Guide the firms
Page 60
“Objectives should set the firm’s course”
• Engage in activities that provide a socially
and economically useful function
• Develop an organization to carry on the
business and implement its strategies
• Earn enough profit to survive
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 14
Organize to Innovate
•
•
•
•
•
G
O
P
S
T
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 15
Organize to Innovate
•
•
•
•
•
Goal
Objectives
Plans
Strategy
Tactics
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 16
Profit
• “… a firm must make a profit to survive …”
• “… management must specify the time period
involved”
• how long can you afford to wait, before you
either
A. go bankrupt
B. begin making “serious” money
Page 61
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 17
Mission Statement
Page 61
• “… sets out the organization’s basic purpose
for being…”
• “… focus on a few key goals”
• use language which is motivating and
creates enthusiasm
• choose words which allow you to be
understood by other people
• provide guidelines for executive decision
making
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 18
The Mission Statement,
which fosters the
Corporate goal, and
objectives, should lead to
the marketing objectives
Page 62
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 19
The Pressure of Competition
Japanese companies had better manufacturing
techniques and Japanese bikes were cheaper - so
Harley had to work harder at making their production
costs less - at the same time they worked hard to
create an “image” so people would want to pay more
for their bigger bikes.
Page 63
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 20
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 21
Types of Competitive Structures
• Monopoly
• Oligopoly
• Monopolistic Competition
• Pure Competition
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 22
Types of Competitive Structures
Monopoly
A monopoly exists when a firm offers a
product that has no close substitutes.
Because the organization has no
competition, it controls supply of the
product completely and can erect barriers to
potential competitors
Page 65
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 23
Types of Competitive Structures
Oligopoly
“A few sellers, or large firms, and many
smaller ones”
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 24
Types of Competitive Structures
Oligopoly
An Oligopoly exists when a few sellers
control the supply of a large portion of the
product.
Example - 6 main banks in Canada (soon to
be reduced to 4)
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 25
Types of Competitive Structures
Monopolistic Competition
”Is a market situation that develops when a
market has;
1. Different products
2. Sellers feel they do have some competition
“Each firm is trying to get control in their own
little market”
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 26
Types of Competitive Structures
Monopolistic Competition
This exists when a firm with many different
competitors attempts to develop a marketing
strategy to differentiate its product.
Example LEVI
- there are many different brands of jeans
- what LEVI has done is try to make its
marketing “unique” so their product “stands
out”.
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 27
Types of Competitive Structures
Pure Competition
“Many buyers and sellers”
easy for buyers and sellers to get involved
people have little difficulty in starting their own
business
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 28
Types of Competitive Structures
Pure Competition
This exists when there are a large number of
sellers, and nobody has a dominant position.
The closest example to this is the weekend
“farmers markets” that allow farmers to sell
agricultural products to individual customers.
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 29
Competitor Analysis
Page 65
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 30
Competitor Analysis
“The best way for a manager to avoid
competition, is to find better ways to satisfy
customer needs…”
IF your people cannot come up with any new ideas,
one thing you can do is look at what the competition
is doing, and see if you want to copy that, or change
it slightly, or develop a totally new variation.
Page 65
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 31
Competitor Analysis
“You compare the strengths and weakness of
your current Marketing Strategy [= target
market + marketing mix], with what
competitors are doing…”
Page 64
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 32
Competitor Analysis
Where do you get information about competitors
•“monitor local newspapers”
•“middlemen”, brokers, agents
•employee newsletters
•web sites
•sub-contractors
•people who no longer work there
To accompany
Basic Marketing, Shapiro,
9th
Page 64
Cdn Ed.
ppt slides created
Slide 33
Competitor Analysis
So instead of stealing the information Take the people
- its called “Competitive Executive Recruitment”
Page 64
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 34
Anticipate Competition
Page66
What will Motorola do when Nokia comes
up with a small phone like the Startac?
Only 3.08 pounds with
battery. $900 US
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 35
Competitive Barriers
Page 66
• Things which make it difficult for other
companies to compete in a market
• Things which make it tough to do
business there
•
•
•
•
•
To accompany
government regulations
advertising rules
distribution alliances
“getting cooperation in the channel”
patent protection
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 36
Economic and Technological
Environments
“We will treat the economic and
technological environments
separately”
Page 68
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 37
Page68
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 38
Economic Environment
The factors in a region or country that
affect the production, distribution, and
consumption of its wealth. Key elements
are monetary resources, inflation,
employment, and productive capacity.
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 39
Page 74
Technological Environment
The applications of knowledge based on
scientific discoveries, inventions, and
innovations.
Advances in technology frequently lead to price
reductions due to
- newer more efficient production methods
ie. circuit boards
- new materials create better components
ie. Lithium batteries for cell phones and laptop
computers
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 40
Technological Environment
Biggest challenge is keeping up with the
pace of changes
eg.
•386, 486, 486DX, Pentium, Pentium II
•3 1/2 drive , CD ROM, DVD
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 41
Socio-Cultural Environment
CONSUMERISM
Not mentioned in 9th edition
- making business more responsible to the consumer
- the evolution of consumer rights
- product safety
- false advertising etc.
- environmental and socially responsible
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 42
Socio-Cultural Environment
CONSUMERISM
- “ … a social movement that seeks to increase the
rights and powers of consumers and buyers…”
Ralph Nader
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created
Slide 43
Political Environment
To accompany
Basic Marketing, Shapiro,
9th
Cdn Ed.
ppt slides created