Chapter

Chapter

The Dynamic Marketing The Dynamic Marketing EnvironmentEnvironment

The Dynamic Marketing The Dynamic Marketing EnvironmentEnvironment

2

After studying this chapter you should be able to explain:The concept of environmental marketing.How external environmental forces affect marketing.How external factors (markets, suppliers, intermediaries) affect marketing.How nonmarketing resources affect a firm’s marketing.

Chapter 2 Theme:

• Looking for opportunities while avoiding threats in the marketplace…

Key Factors that Help or Hurt Company Success:

• Company’s Internal Environment

• Company’s External Marketing Environment• Includes:

– Microenvironment - forces close to the company that affect its ability to serve its customers.

– Macroenvironment - larger (typically uncontrollable) forces that affect most companies

Two Levels of External Forces have an Effect on Marketing:

• MicroMicro influences consist of suppliers, marketing intermediaries, and customers.

• MacroMacro influences include demographics, economic conditions, culture, and laws.

Six Interrelated Macroenvironmental Forces can Affect an Organization’s

Marketing Program:

• Demographics• Competition• Political and legal forces• Economics conditions• Social and cultural forces• Technology

Environmental Monitoring

• Environmental Monitoring (Scanning) is the process of:– gathering information regarding the gathering information regarding the

external environment,external environment,– analyzing that information, andanalyzing that information, and– forecasting the impact of whatever trends forecasting the impact of whatever trends

the analysis suggests.the analysis suggests.

COMPANY’SMARKETINGPROGRAM

Demo-graphics

Economiccondition

s

Politicaland legal

forces

Social and cultural

forces

Competition

Technology

Macroenvironmental ForcesMacroenvironmental Forces

Demographics

• Age

• Income

• Gender

• Education

• Race/Ethnicity

Some Key U.S.Demographic Trends

Changing Age StructurePopulation is aging; many divisions

Changing American FamilyLater marriage, fewer children, workingwomen, and nontraditional households

Geographic ShiftsMoving to the Sunbelt, suburbs,

“micropolitan areas”

Better-Educated & More White-Collar Increased college attendance

and white-collar workers

Race/Ethnicity

• What’s happening in U.S. in regards to race/ethnicity?

• Increasing Diversity……..

• NM is a window to the future. . . .

Social ForcesSocial ForcesSocial ForcesSocial Forces

Changing MinoritiesChanging Minorities

• Major Ethnic Groups as a percent of total:

2001: Wht/NH (71.0) Black (12.9) Hispanic (12.1)




Source: www.census.gov January 13, 2000


Changing Age StructureChanging Age Structure

3031.4

32.834.3

35.7

38.539.3

20

25

30

35

40

1980 1985 1990 1995 2000 2005 2010

Median Age of Resident Population 1980-2050




1990




2000




2025


Changing Family StructureChanging Family Structure


Population GrowthPopulation Growth

As of the last census:

• What is the population of the United States?

• Approximately 308 Million people

Age Distribution of the U.S. Population

(78 million people born 1946-1964) One of the most powerful forces shaping

the marketing environment, 30% of population

(45 million people born 1965-1976) More skeptical, cynical of frivolous marketing pitches promising easy

success (72 million people born 1977-1994)

Fluent and comfortable with computer, digital, and Internet

technology (Net-Gens)

Importance of Age

• Why are Baby-Boomers so important to Marketers?

• 76 million of them• Who are Baby-Busters / Gen. X-er’s?• Generation Y

Economic Conditions

• The Business Cycle - 3 stages:

– ProsperityProsperity

– RecessionRecession

– RecoveryRecovery

Learn it on your own...

Economic Conditions

InflationInflation - Increase in prices of goods and services.Interest RatesInterest Rates - How do they affect marketers?

Donnie’s Z-28 purchase

Political and Legal Forces

• Monetary and Fiscal Policies

• Social Legislation and Regulation

Social and Cultural Forces

• Environmental Consciousness

• Changing Gender Roles

– Changing back some though. . . . More manly men.

• A Premium on Time

• Physical Fitness and Health

Technological Environment

• Faster pace of technological change; products are outdated at a rapid pace.

• Almost unlimited opportunities being developed daily in health care, space industry, robotics, and bio-genetic field.

• Challenge is not only technical, but also commercial – make practical, affordable versions of products.

Technological ForcesTechnological Forces

• Some of the most dramatic technological changes occurring now are:– the declining cost and size, and increasing power,

of microprocessors;– the convergence of television, personal computer,

and telephone technologies;– the pervasive trend toward “connectedness”

through the World Wide Web;– the emergence of biotechnology as a key

component of the economy.

Environmental Monitoring

• Environmental Monitoring (Scanning) is the process of:– gathering information regarding the gathering information regarding the

external environment,external environment,– analyzing that information, andanalyzing that information, and– forecasting the impact of whatever trends forecasting the impact of whatever trends

the analysis suggests.the analysis suggests.

Additional Environmental

Monitoring Examples

KOSS Corporation (1981)

• Show tape (10 min.)

• What happened to KOSS?

What’s going on in the Macroenvironment that Sirius/XM Needs

to be aware of? (opportunities/Threats)

Documents

Chapter