Chapter 2 The Marketing Environment

Learning Objectives Understand the importance of monitoring change in the marketing environment Describe how trends in the demographic, socio-cultural, economic, and technological environment affect marketing Recognize the impact competition has on companies and their marketing programs Understand the regulatory forces that encourage free market competition, and protect consumers from questionable marketing practices 1

Environmental Change 2 Changed the way the consumer: Collects information Communicates Contributes Changed the way the consumer: Collects information Communicates Contributes The Internet

Marketing Environment 3 Changes Awareness of changes Thwart threats Opportunities

Marketing Environment 4

The knowledge from a marketing environmental scan  Relevant products, services, and ideasmarketing environmental scan 5

Demographic Forces Statistics Canada provides access to demographics information demographics Companies can complete their own demographics research 6

Demographic Forces - Age Aging Population 7 People 50+ control 75% of Canadian household net worth

Demographic Forces 8

Demographic Forces – Diverse Generations Baby Boomers 60% of consumer goods and service expenditures Have redefined the concept of aging 9

Demographic Forces – Diverse Generations Generation X 12% of the population Not brand loyal Self-reliant Entrepreneurial Educated 10

Demographic Forces – Diverse Generations Generation Y 27.5% of the population Technology and sports 11

Demographic Forces - Urbanization 12

Demographic Forces – Ethnic Diversity 2/3 of Canada’s population growth is due to immigration 13

Demographic Forces – Non- Traditional Families Changes in family structure: More common-law relationships Single-parent families Blended families Same-sex marriages 14

Socio-Cultural Forces Marketers monitor socio-cultural forces so they can capitalize on new opportunitiessocio-cultural forces 15

Socio-Cultural Changes Ethnic foods Health and fitness Environmental awareness Changing gender roles 16

Economic Forces A change in the economy impacts a person’s ability to purchaseeconomy 17

Economic Forces Key economic indicators: Inflation rate Unemployment rate Economic growth rate 18

Microeconomic Forces Gross income Disposable income Discretionary income 19

Technological Forces What new inventory are being introduced and how consumers are accepting these technological forcestechnological forces 20

Technological Advances Internet and search engines , text, and instant messaging Social networking sites Video sharing sites Downloading Blogs Online TV Cell phones 21

Technological Forces 22

Competitive Forces An analysis of direct competitors and indirect competitors is necessary in designing a marketing strategy that is responsive to competitiondirect competitors indirect competitors competition 23

Competition Types of Competitive Markets 24

Regulatory Forces A marketer must be aware of regulations that affect how they do business regulations 25

Regulatory Groups Competition Bureau Canadian Radio & Television & Telecommunications Commission (CRTC) Advertising Standards Council (ASC) Canadian Marketing Association (CMA) Better Business Bureau (BBB) 26

Marketing Environmental Scan The process of continually acquiring information on events occurring outside the organization to identify trends, opportunities, and threats to your business 27 BACK

Demographics The statistical data on a population according to characteristics such as age, gender, ethnicity, income, and occupation 28 BACK

Baby Boomers People born between 1946 and BACK

Generation X People born between 1965 and BACK

Generation Y People born between 1975 and BACK

Socio-Cultural Forces Cultural values, ideas, and attitudes, and society’s morals and beliefs 32 BACK

Economy The collective income, expenditures, and resources that affect the cost of running a business or household 33 BACK

Gross Income Total amount of money made in one year by a person, household, or family unit, including taxes 34 BACK

Disposable Income Balance of income left after paying taxes that is used for spending and savings 35 BACK

Discretionary Income Money that consumers have left after paying taxes and buying necessities 36 BACK

Technological Forces Inventions from applied science or engineering research 37 BACK

Direct Competitors Similar products sold in the same category 38 BACK

Indirect Competitors Products competing for the same buying dollar in a slightly different, but related, category 39 BACK

Competition Alternative products that can satisfy a specific market’s needs 40 BACK

Regulations Restrictions placed on marketing practices by government and industry associations 41 BACK