Chapter foundations of Chapter M A R K E T I N G The Environment for Marketing Decisions 2

Chapter Objectives 1. Identify the environmental factors that affect marketing decisions. 2. Identify three categories of competition faced by marketers, and outline the issues to consider in developing a competitive strategy. 3. Illustrate the association between marketing plans and the technological environment. 4. Demonstrate how the sociocultural environment influences marketing decisions. 5. Show how the economic environment has a bearing on marketing planning. 6. Explain the major legislative framework that regulates marketing activities. 2 The Environment for Marketing Decisions 2-1

Chapter Environmental Planning Process by which the marketing manager gathers and sorts information about the marketing environment. 2 The Environment for Marketing Decisions 2-2

Chapter 2 The Environment for Marketing Decisions 2-3 Components of the Marketing Environment Figure 2.1 The Marketing Plan Customers Economic Conditions Political-legal climate Sociocultural environment Competition Technology

Chapter Competitive Environment The interactive process that occurs in the marketplace in which different organizations seek to satisfy similar markets. 2 The Environment for Marketing Decisions 2-4

Chapter Types of Competition Inter-product or direct Product-substitute or indirect Alternative-gratification 2 The Environment for Marketing Decisions 2-5

Chapter Technological Environment The applications of knowledge based on scientific discoveries, inventions, and innovations. 2 The Environment for Marketing Decisions 2-6

Chapter Key Factors of the Technological Environment Computer technology Internet 2 The Environment for Marketing Decisions 2-7

Chapter Sociocultural Environment The mosaic of societal and cultural components that are relevant to the organization’s business decisions. 2 The Environment for Marketing Decisions 2-8

Chapter Key Factors of the Sociocultural Environment General readiness of society to accept a marketing idea Trust and confidence in business Mixed society Towns and rural communities Gender Consumerism 2 The Environment for Marketing Decisions 2-9

Chapter Economic Environment 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. 2 The Environment for Marketing Decisions 2-10

Chapter Stages of the Business Cycle Recession Depression Recovery Prosperity 2 The Environment for Marketing Decisions 2-11

Chapter Inflation and Stagflation Inflation Rising price level resulting in reduced purchasing power for the consumer. Stagflation High unemployment and a rising price level at the same time. 2 The Environment for Marketing Decisions 2-12

Chapter Fiscal and Monetary Policy Fiscal Policy Receipts and expenditures of government. Monetary Policy Manipulation of the money supply and market rates of interest. 2 The Environment for Marketing Decisions 2-13

Chapter Demarketing The process of cutting consumer demand for a product, because the demand exceeds the level that can reasonably be supplied by the firm or because doing so will create a more favorable corporate image. 2 The Environment for Marketing Decisions 2-14

Chapter Political - Legal Environment The laws and interpretation of laws that require firms to operate under competitive conditions and to protect consumer rights. 2 The Environment for Marketing Decisions 2-15

Chapter Key Factors in Political - Legal Environment Free-enterprise society Competition Act 2 The Environment for Marketing Decisions 2-16

Chapter The Competition Act prohibits: Combinations that lessen competition. Mergers or monopolies detrimental to the public. Deceptive trade practices. 2 The Environment for Marketing Decisions 2-17

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