McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.
LEARNING OBJECTIVES (LO)
After reading Chapter 1, you should be able to:
LO1
Explain how environmental scanning provides
information about social, economic, technological,
competitive, and regulatory forces.
LO2
Describe how social forces such as demographics
and culture can have an impact on marketing
strategy.
LO3
Discuss how economic forces such as
macroeconomic conditions and consumer income
affect marketing.
1-2
Introduction – Scanning the Market Environment
LEARNING OBJECTIVES (LO)
After reading Chapter 1, you should be able to:
LO4
Describe how technological changes can affect
marketing.
LO5
Discuss the forms of competition that exist in a
market and key components of competition.
LO6
Explain the major legislation that ensures
competition and regulates the elements of the
marketing mix.
1-3
Introduction – Creating Customer Relationships & Value through Marketing
The World’s Third Largest Nation
Facebook: The Social Nation?
1-4
Opening Story – Facebook
Environmental Scanning
Definitions and Examples
• Tracking Environmental Trends
• Example: Coffee Marketers
• An Environmental Scan of Today’s
Marketplace
LO1
1-5
Using Environmental Scanning to Elicit Information
FIGURE 3-1 Environmental forces affect the
organization, its suppliers, and its customers
LO1
1-6
Using Environmental Scanning to Elicit Information
FIGURE 3-2 An environmental scan of
today’s marketplace shows the many
important trends that influence marketing
LO1
1-7
Using Environmental Scanning to Elicit Information
Social Forces
Definitions and Examples
Social Forces
Demographics
• World Population
• Asian Population
LO2
1-8
Social Forces impact Market Strategy
FIGURE 3-3 Changing distribution of the
world population
LO2
1-9
Social Forces impact Market Strategy
Demographics
Differences in Generations
Generational Marketing
Generations differ in mindsets
Products will also be different
Baby Boomers: 1946 - 1964
Generation X: 1965 - 1976
Generation Y: 1977 - 1994
Millennials: 1995 +
LO2
Next Generation: Internet?
1-10
Social Forces impact Market Strategy
Demographics
Which ad for which generation?
LO2
1-11
Social Forces impact Market Strategy
Demographics
Asian Household
3 and 2 Generation Households
Nuclear family?
LO2
DINK
Single-person Households
Blended Family
1-12
Social Forces impact Market Strategy
FIGURE 3-4 Household data of some
metropolitan areas of asia
Source: Euromonitor International
LO2
1-13
Social Forces impact Market Strategy
Social Forces
Population shifts
LO2
Migration to growth regions
Migration from rural to urban areas
Metropolitan areas in Asia
Immigration
1-14
Social Forces impact Market Strategy
FIGURE 3-5
Migrant-contributing countries and migrantreceiving countries in Asia
LO2
1-15
Social Forces impact Market Strategy
FIGURE 3-6 Some metropolitan areas in Asia
LO2
1-16
Social Forces impact Market Strategy
Demographics
Racial / Ethnic diversity
Ethnicity
• Homogenous
• Heterogeneous
LO2
Multicultural marketing program
1-17
Social Forces impact Market Strategy
FIGURE 3-7 Racial and ethnic breakdown of
some countries in Asia
LO2
1-18
Social Forces impact Market Strategy
Demographics
Culture
Culture
The Changing Attitudes and Roles
of Men and Women
Asian Values
• Value Consciousness
LO2
1-19
Social Forces impact Market Strategy
Macroeconomic Conditions
Economic Forces
Economy
• Inflation
• Recession
• Consumer Confidence
LO3
1-20
Economic Forces impact Market Strategy
FIGURE 3-8 Real GDP growth of the world,
the Asia-Pacific region, Japan, and China.
LO3
1-21
Economic Forces impact Market Strategy
FIGURE 3-9 The Nielsen Consumer Confidence
Index (2011) – 35/56 markets declined
LO3
1-22
Economic Forces impact Market Strategy
Consumer Income
Economic Forces
Gross Income
Disposable
Income
Total Income
- Personal Taxes
Discretionary
Income
LO3
Total Income
Total Income
- Personal Taxes
- Necessities
1-23
Economic Forces impact Market Strategy
FIGURE 3-10 Household gross income and
disposable income in 2010
LO3
1-24
Economic Forces impact Market Strategy
Technology of Tomorrow
Technological Changes
Dramatic Technological Changes
• Nanotechnology
• High Definition TV
• Voice over Internet Protocol Services
LO4
1-25
Technological Changes impact Market Strategy
New Technology, New Products
Technological Advancements in 2006
LO4
1-26
Technological Changes impact Market Strategy
New Technology, New Products
Technological Advancements in 2010
LO4
1-27
Technological Changes impact Market Strategy
Effects on Marketing
Technological Changes
• Plummeting Costs of Tech-Based Products
• New Products Developed
• Production of Existing Products Changed
Recycling
Precycling
3-28
LO4
1-28
Technological Changes impact Market Strategy
Sunpower Group
Recovers useful by-products, reduces pollution charges
LO4
1-29
Technological Changes impact Market Strategy
Electronic Business Technologies
Technological Changes
LO4
Marketspace
E-Commerce
Intranet
Extranets
1-30
Technological Changes impact Market Strategy
Competition
Alternative Forms
LO5
Pure Competition
Monopolistic Competition
Oligopoly
Pure Monopoly
1-31
Competition in Markets; Key Components
Competition
Components of Competition
LO5
Barriers to Entry
Power of Buyers and Sellers
Existing Competitors and Substitutes
Small Businesses as Competitors
1-32
Competition in Markets; Key Components
Marketing Dashboards
Assessing Competition is the Key to Success
The Effect of Price Reductions on Sales Increases
LO5
1-33
Competition in Markets; Key Components
Legislation
Regulatory Forces
Regulation
Protecting Competition
• Fair Trade Commission of Japan
– Anti Monopoly Act
– Law Prohibiting Unfair Competition
LO6
1-34
Competition Legislation and Regulation
Legislation
Regulatory Forces
Product-Related: Company Protection
• Patent Law
• Copyright Law
• Intellectual Property Office of Singapore
– Patents Act (Cap 221)
– Copyright Act (Cap 63)
LO6
1-35
Competition Legislation and Regulation
Legislation
Regulatory Forces
Product-Related: Consumer Protection
• Nutritional Labeling
• Malaysian Food Regulations (1985)
• Consumers rights
• Consumerism
LO6
1-36
Competition Legislation and Regulation
Legislation
Regulatory Forces
Product-Related: Company and
Consumer Protection
• Trademarks
• Registered trademarks e.g. Xerox
• U.S. Supreme Court: Trademark Colors
LO6
1-37
Competition Legislation and Regulation
Kleenex, Band-Aid, Q-Tips
Generic Names or Registered Trademarks?
LO6
1-38
Competition Legislation and Regulation
Legislation
Regulatory Forces
Pricing-Related
• Price Fixing
• Thailand – Price Fixing & Anti Monopoly
Act (1979)
• Price Discounting
LO6
1-39
Competition Legislation and Regulation
Legislation
Regulatory Forces
Distribution (Place)-Related
• Exclusive Dealing
• Requirement Contracts
• Exclusive Territorial Distributorships
• Tying Arrangement
LO6
1-40
Competition Legislation and Regulation
Legislation
Regulatory Forces
Advertising and Promotion-Related
• Deceptive, misleading or unfair
Cease and Desist Order
Corrective Advertising
• National Do Not Call Registry
LO6
Self-Regulation
1-41
Competition Legislation and Regulation
