1. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Chapter 4: Evaluating Opportunities in the Changing Marketing Environment

2. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill A Hierarchy of Objectives Exhibit 4-1 4-4 R&D Objectives HR Objectives Marketing Objectives Finance Objectives Production Objectives Company Objectives Sales Promotion Objectives Mass Selling Objectives Personal Selling Objectives Price Objectives Promotion Objectives Place Objectives Product Objectives

3. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill How Major Objectives should be Changed 1] In Writing 2] Discuss the Reason for the change in objectives with people involved 3] Describe the process for getting to the new objectives Remember, you do not want to change objectives too often

4. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Limits on Opportunity Search Marketing Strengths Producing Capability and Flexibility Financial Strength 4-5

5. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Competitive Environment Information on Competitors Competitive Barriers Competitive Rivals Competitor Analysis Kinds of Markets Key Concepts in the Competitive Environment 4-6

6. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Measuring the Competition For a Local Market 1] Start with your known competitors 2] Consult the Yellow Pages 3] Ask your customers 4] Keep your eyes open

7. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Measuring the Competition for a Regional or National Business 1] Read your trade press carefully 2] Make notes at trade shows 3] Get a list of all members of your National or Regional Trade Association 4] Look at Wholesalers & Retailers 5] Web & News Sources

8. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Measuring Your Competitors Strategy Make Sure you measure ALL elements of the marketing mix Product Price Place Promotion

9. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Where Do you Find This Information? 1] Trade Shows 2] Trade Press 3] Obtaining Price Lists 4] Purchasing & testing Competitor Brands 5] Visit Competitors Stores 6] Check public warehouses 7] Monitor local newspapers 8] Web & Other News Sources

10. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill What Next? 1] Write down this information - with dates 2] Use measurable criteria 3] Think! What are competitor’s strengths, weaknesses, market trends? 4] Most important - where are the strategy gaps? Consider this from the CUSTOMER’S View.

11. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Economic and Technological Environment Interest Rates Global Economy Rapid Change Key Economic Forces 4-7

12. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Impact of Technology Technology is the application of science to convert an economy’s resources to output Technology impacts marketing both through opportunities for new products and new ways (processes) for handling marketing functions Example: consider the Internet Products: software for computer users Process: selling from a web site 4-8

13. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Political and Legal Environment Regional Groupings Regional Groupings Nationalism Consumerism Characteristics of the Political Environment 4-9

14. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Key Ideas in the U.S. Legal System 1] Promote Competition 2] Warn About Dangerous Products 3] Enforce Contracts 4] Protect Children 5] There is variation between states

15. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Important Laws Affecting Marketing Sherman Act (1890) prohibits conspiracy to reduce competition example: price "fixing" agreements among competing firms Federal Trade Commission Act (1914) prohibits unfair methods of competition example: use of deceptive advertising Robinson-Patman Act (1936) prohibits most types of price-related discrimination example: offering "advertising allowances" to some middlemen but not others (without cost justification)

16. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Federal Antimonopoly Laws & the Four Ps

17. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Cultural and Social Environment 4-11 Cultural Trend: The Changing Roles of Women Cultural Trend: The Changing Roles of Women Time Poverty Economic Power Career Opportunity

18. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Sales and Cost Curves of Two Strategies Exhibit 4-6 Dollars Total cost Years Sales 012345 Product A In this graphic, a too-narrow focus on the first year’s results might cause the marketing manager to abandon this product as too costly. 4-12

19. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Sales and Cost Curves of Two Strategies Total cost Years Sales 012345 Product B In this graphic, a too-narrow focus on the first year’s results might cause the marketing manager to adopt the product prematurely, since its performance in year one is misleading. Exhibit 4-6 4-13

20. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Sales and Cost Curves of Two Strategies Exhibit 4-6 4-14 Dollars Total cost Years Sales 012345 Product A Total cost Years Sales 012345 Product B Seen together, it is easy to see that Product A offers a vastly better overall return than does Product B

21. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 4-7 4-15 Business Strength Industry Attractiveness High Medium Low HighMediumLow No Growth Borderline Growth Evaluating Opportunities

22. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill InsensitiveSensitive Basic commodity-type consumer products Industrial products Consumer products that are linked to cultural variables Exhibit 4-8 4-16 Continuum of Environmental Sensitivity

23. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Mission Statement Provides Guidance Mission statement helps set the course of a firm by explicitly stating the organization’s basic purpose for being May make it clear that some opportunities (target market or marketing mix alternatives) are not related to the mission Some opportunities may be a good fit with mission, but not as good a fit or as high a priority as others Mission statement works in combination with specific objectives and should relate to screening criteria used to evaluate strategy alternatives

24. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill http://www.benjerry.com/activism/mission- statement/