1. Marketing II The Chang School-Ryerson University Continuing Education Email: agervais@ryerson.ca preferred agervais@ryerson.ca Web: www.ryerson.ca/~agervais Office: Bus 308 Phone: 416-979-5000 Ext 4215 CMKT 200 Fall 2005 Instructor: Armand Gervais

2. 1 Lecture 1 Agenda Introductions Introductions Overview of Course Overview of Course Project Overview Project Overview Peer Evaluation Peer Evaluation Break Break Marketing Review Marketing Review To Do’s for next weeks class To Do’s for next weeks class Questions and Answers Questions and Answers Time to begin forming Groups Time to begin forming Groups

3. 2 Introduction Armand Gervais Education: Bachelor of Commerce-Major Economics University of Toronto Bachelor of Commerce-Major Economics University of Toronto MBA York University MBA York University Teaching Experience: 3 years teaching MKT 731 (Industry Analysis), BUS 800 (Strategic Management) 3 years teaching MKT 731 (Industry Analysis), BUS 800 (Strategic Management) CMKT 200 Business Experience: ID-ONE Inc. Residential Interior Design ID-ONE Inc. Residential Interior Design Partner and Operations Manager Partner and Operations Manager 4 years with Air Miles 4 years with Air Miles Business/Database Analyst Business/Database Analyst Project Manager Database Development Project Manager Database Development 6 years retail management. Wendy's, Major Video 6 years retail management. Wendy's, Major Video Industry Experience: Loyalty programs Loyalty programs Hospitality- restaurants and resorts Hospitality- restaurants and resorts Retail-Confectionaries, clothing, travel, books and electronics. Retail-Confectionaries, clothing, travel, books and electronics. Telecommunications Industry Telecommunications Industry

4. 3 Class – Your turn Your Name Your Name School Major or specialization School Major or specialization Work or life experience Work or life experience Expectations for the class Expectations for the class What are your objectives? What are your objectives? What has to happen for this to be a success for you? What has to happen for this to be a success for you?

5. Course Outline

6. Group Project and Peer Evaluation

7. 6 SCANNING THE MARKETING ENVIRONMENT 33 C HAPTER

8. 7 Challenge Launching New Products New-product experts estimate that 80-94% of the over 25,000 new consumable products (food, beverage, health, beauty, and other household and pet products) introduced in North America annually “Don’t succeed in the long run” New-product experts estimate that 80-94% of the over 25,000 new consumable products (food, beverage, health, beauty, and other household and pet products) introduced in North America annually “Don’t succeed in the long run”

9. 8 FIGURE 3-1 Environmental forces affecting the organization, as well as its suppliers and customers

10. 9 FIGURE 3-2 An environmental scan of Canada

11. 10 Demographics Demographics Population Size and Growth Population Size and Growth Age Waves Age Waves Mature household Mature household Baby boomers Baby boomers Generation X Generation X Baby boomlet Baby boomlet SOCIAL FORCES

12. 11

13. 12 FIGURE 3-3 The age distribution forecast for the Canadian population in 2011

14. 13 The Canadian Family The Canadian Family Blended family Blended family Population Shifts Population Shifts Census metropolitan areas (CMAs) Census metropolitan areas (CMAs) Regional Marketing Regional Marketing Ethnic Diversity Ethnic Diversity SOCIAL FORCES

15. 14 Culture Culture Changing Attitudes and Values Changing Attitudes and Values Value consciousness Value consciousness Social Forces

16. 15 Macroeconomic Conditions Macroeconomic Conditions Consumer Income Consumer Income Gross Income Gross Income Economic Forces

17. 16

18. 17 FIGURE 3-4 Income distribution of Canadian households

19. 18 Macroeconomic Conditions Macroeconomic Conditions Consumer Income (cont) Consumer Income (cont) Disposable Income Disposable Income Discretionary Income Discretionary Income Economic Forces

20. 19 Technology of Tomorrow Technology of Tomorrow Technology’s Impact on Customer Value Technology’s Impact on Customer Value Electronic Business Technologies Electronic Business Technologies Marketspace Marketspace Electronic commerce Electronic commerce Internet and Worldwide Web Internet and Worldwide Web Commercial online services Commercial online services Intranet Intranet Extranets Extranets Technological Forces

21. 20 Alternate Forms of Competition Alternate Forms of Competition Pure competition Pure competition Monopolistic competition Monopolistic competition Oligopoly Oligopoly Monopoly Monopoly Competitive Forces

22. 21 Components of Competition Components of Competition Entry Entry Barriers to Entry Barriers to Entry Power of Buyers and Suppliers Power of Buyers and Suppliers Existing Competitors and Substitutes Existing Competitors and Substitutes Start-Ups, Entrepreneurs, and Small Business Start-Ups, Entrepreneurs, and Small Business Competitive Forces

23. 22 The New Look in American Corporations The New Look in American Corporations Restructuring Restructuring Competitive Forces

24. 23 Regulation Regulation Protecting Competition and Consumers Protecting Competition and Consumers The Competition Act The Competition Act REGULATORY FORCES

25. 24 FIGURE 3-5 Major federal legislation designed to protect competition and consumers

26. 25 Self-Regulation Self-Regulation Consumerism Consumerism Regulatory Forces

27. 26 The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends is called environmental scanning. Environmental Scanning

28. 27 The generation of children born between 1946 and 1964 is know as the baby boomers. Baby Boomers

29. 28 Generation X includes the group of Canadians born between 1965 and 1976. Generation X

30. 29 The baby boomlet encompasses Canadians born after 1977. Baby Boomlet

31. 30 A blended family is formed by the merging into a single household of two previously separated units. Blended Family

32. 31 Porter 5 Forces Framework Entry Barriers Economies of Scale Proprietary Product Differences Brand Identity Switching Costs Capital Requirements Access to Distribution Absolute Cost Advantages - Proprietary learning curve - Access to necessary inputs - Proprietary low-cost product design Government Policy Expected Retaliation Determinants of Supplier Power Differentiation of Inputs Switching Costs of Suppliers and Firms in the Industry Presence of Substitute Inputs Supplier Concentration Importance of Volume to Supplier Cost Relative to Total Purchases in the Industry Impact of Inputs on Cost or Differentiation Threat of Forward Integration Relative to the Competition Threat of Backward Integration by Firms in the Industry Rivalry Determinants Industry Growth Fixed (or Storage) Costs/Value Added Intermittent Over-Capacity Product Differences Brand Identity Switching Costs Concentration and Balance Informational Complexity Diversity of Competitors Corporate Stakes Exit Barriers Determinants of Substitutes Relative Price Performance of Substitutes Switching Costs Buyer Propensity to Substitute Bargaining Leverage Buyer Concentration vs. Firm Concentration Buyer Volume Buyer Switching Costs Relative to Firm Switching Costs Buyer Information Ability to Backward Integrate Substitute Products Pull-Through Price Sensitivity Price/Total Purchases Product Differences Brand Identity Impact on Quality/ Performance Buyer Profits Decision Makers’ Incentives Industry Competitors Intensity of Rivalry Buyers New Entrants Substitutes Suppliers Threat of New Entrants Bargaining Power of Suppliers Threat of Substitutes Buying Power of Buyers Determinants of Buyer Power

33. 32 To Do’s for Next Class Before you leave today sign attendance sheet Before you leave today sign attendance sheet Email me your contact information Student ID, Email, and contact number Email me your contact information Student ID, Email, and contact number Include course and section number in subject line Include course and section number in subject line Please include a little about yourself: Please include a little about yourself: Program, Major, work experience etc. Program, Major, work experience etc. Get textbook Get textbook Complete the assigned readings download through library Complete the assigned readings download through library Form groups Form groups