2-1

2-2 The Dynamic Marketing Environment Chapter 2 McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

2-3 Chapter Goals McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. The concept of environmental monitoring The effect of external environmental forces on an organization’s marketing The influence of external factors on a firm’s marketing The effect of a firm’s nonmarketing resources on its marketing

2-4 Levels of External Forces Macro Level Influences that affect all firms Micro Level Influences that affect a particular firm

2-5 External Macroenvironment Forces

2-6 Demographics People Make Markets Markets DistributionDistributionGrowthGrowth SizeSize Characteristics of Populations Populations

2-7 Economic Factors People with Money to Spend and Willing to Spend it People with Money to Spend and Willing to Spend it InflationInflation Interest Rates RatesInterest Stage of the BusinessCycle BusinessCycle

2-8 Competition Rivals for Customers’ Limited Buying Power Rivals for Customers’ Limited Buying Power SubstituteProductsSubstituteProductsEvery Company CompanyEvery BrandCompetitionBrandCompetition Differential Advantage

2-9 Social and Cultural Forces People Make Markets Markets BeliefsBeliefs Socio-culturalPatterns Changing Quickly Socio-culturalPatterns ValuesValues LifestylesLifestyles

2-10 Social and Cultural Changes Concern for Natural Environment Natural Environment Concern for Natural Environment Natural Environment Quality not Quantity Quality not Quantity Changing Gender Roles Two Incomes and Balance Two Incomes and Balance Physical Fitness and Health Health Exercise and Diet Premium on Time Convenience

2-11 Political and Legal Forces Monetaryand Fiscal Policies Monetaryand GovernmentalRelationshipwithIndustriesGovernmentalRelationshipwithIndustries Social Legislation andRegulation andRegulation Legislation Related RelatedtoMarketingLegislation toMarketing

2-12 Legislation Affecting Marketing Sherman Antitrust Act Federal Trade Commission Act Clayton Antitrust Act State Unfair Trade Practices Acts Robinson-Patman Act Wheeler-Lea Act Lanham Trademark Consumer Goods Pricing Act Various deregulation laws pertaining to specific industries Regulate Competition

2-13 Legislation Affecting Marketing Pure Food and Drug Act Automobile Disclosure Act Kefauver-Harris Drug Amendments National Traffic and Motor Vehicle Safety Act Fair Packaging and Labeling Act Cigarette Labeling and Advertising Acts Consumer Credit Protection Act Consumer Product Safety Act Consumer Product Warranty Act FTC Improvement Act Nutritional Labeling and Education Act Children’s Television Act Protect Consumers

2-14 Technology Affects How Marketing is Carried Out Affects How Marketing is Carried Out AlteringExistingIndustriesAlteringExistingIndustries Impacts lifestyles, consumption patterns, consumption patterns, economic well-being Impacts lifestyles, consumption patterns, consumption patterns, economic well-being StartingNewIndustriesStartingNewIndustries StimulatesMarketsand Other Industries StimulatesMarketsand

2-15 External Microenvironment

2-16 Internal Environment

2-17 Operating Environment

2-18 Key Terms and Concepts McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. Environmental Monitoring Demographics Baby boomers Generation X Generation Y Economic environment Business cycle Inflation Interest rates Differential advantage Social and cultural forces Political and legal forces Technology Market Suppliers Marketing intermediaries Value chain