The Changing Marketing Environment Chapter 3

The Uncontrollable Environment  This chapter takes an in-depth look at the uncontrollable marketing environment in Canada today.  Organizations cannot effect the marketing environment, instead they are affected by it. Successful organizations spot trends in the environment and capitalise on these trends.

The Environmental Forces  Remembering from Chapter 1, The uncontrollable factors include: –Social Forces –Economic Forces –Technological Forces –Competitive Forces –Regulatory Forces

The Environmental Forces  Social Forces –Social forces relate to changes, and events that are occurring in society. Key indicators of change are:  Demographic Shifts –Demographics is a study/measure of peoples ages, sex, income levels, where they live, and ethnicity. –Be aware or key terms such as Mature Housholds, Baby Boomers, Generation X, Blended Families and Regional Marketing.  Cultural Changes –Culture is a reflection of a societies shared values and Beliefs. Attitudes are changing and so is the makeup of our society. People are more conscious of Value and the Natural Environment

The Environmental Forces  Economic Forces –Economics deals with issues of income and expenditures in our society. Key measures of change in economic conditions arise from changes in:  The Canadian economy at large (macroeconomics)  Consumer Income  Gross Income - Taxes = Disposable Income  Disposable Income - necessities = Discretionary Income

The Environmental Forces  Technological Forces –Technology is changing faster than ever. Witness how quickly your new computer will become obsolete. –This rapid change poses quite a large challenge for many organizations.  E-Business –The Internet has made doing business anywhere & anytime possible.

The Environmental Forces  Competitive Forces –Competition refers to the number of alternatives a consumer has when buying a particular product or service.  There are varying degrees of competitive environments. –Monopoly - No Competition - only one seller –Oligopoly - Limited Competition - Two or three sellers –Monopolistic Competition - Many sellers offering substitutable products (Coke, Pepsi, Orange Juice) –Pure Competition - Many sellers selling similar or same products.

The Environmental Forces  Components of Competition –Barriers to Entry  Competition may affect a company’s ability to enter a market easily. There may be many Barriers to Entry in place to limit the growth of competition  Suppliers of raw material may help limit competition in an industry by refusing to sell to a new entrant.  Buyers of products may aid in limited competition by being reluctant to buy from an new entrant into the market.  Competitors may try to limit competition buy forcing new entrants out of the market.  Global Competition has helped to increase the overall level of competition. Many companies are forming world-wide partnerships called Strategic Alliances.

The Environmental Forces  Regulatory Forces –Regulation is a basic set of rules/laws set down by either the industry in question (self- regulation) or by government that effects how that business operates. –Most regulation is designed to:  Protect Customers  Protect Competition –To stem off government imposed regulation, many industries have decided to self-regulate. –Consumerism is a movement among consumers to fight for better protection from bad or corrupt business practices and bad products.