Download 03 - CANVAS- Environmental factors

The Marketing Environment
THE MARKETING ENVIRONMENT
The external forces that directly or indirectly
influence a firm’s acquisition and allocation of
resources and its creation of products
Uncontrollable Factors
Social
Economic
Product
Price
Customer
Promotion
Place
Regulatory
Competitive
Technological
THE ENVIRONMENT AFFECTS EVERYONE
Proper Scan
Identify CORRECT environment
 Proper scale: global, national, regional, local
 Proper industry
 Determine key competitors
Identify key facts and trends
 Earlier is better
 Assess impact quickly/accurately
 Localize trends if business is local
Use scan to make forward-looking decisions
Competitive Forces
Competition: firms that market similar or
substitute products
 Who does your customer consider when looking
to satisfy the need for what you do?
When analyzing competition:
 Consider the competitive structure
 Identify key competitors
 SWOT
 Competitive advantages
 Marketing mix
Types of Competition
Brand Competitors
Product Competitors
Generic Competitors
Total Budget (Indirect)
Competitors
Competitive Structures
Monopoly
• One competitor
• Many, typically big, barriers
• No close product substitutes
• Maintain monopoly status
No
competition
Pure
competition
Competitive Structures
Oligopoly
• Few competitors
• Some barriers
• Homogeneous or differentiated
products
• Focus on competitor reactions
to events
No
competition
Pure
competition
Competitive Structures
Monopolistic Competition
• Many competitors
• Fewer barriers
• Product differentiation, many
substitutes
• Focus on differentiating
product/brand
No
competition
Pure
competition
Competitive Structures
Pure Competition
• Unlimited competitors
• no barriers to entry
• Countless substitutes
• Theoretical situation
No
competition
Pure
competition
Economic Forces
Economic Conditions
Buying Power
Willingness to Spend
Business Cycle
A pattern of economic fluctuations that has four
stages
 Prosperity
 Recession
 Depression
 Recovery
Buying Power and Willingness to Spend
Buying Power = resources (typically money)
that can be traded in an exchange
 Gross income: total income
 Disposable income: after tax money used for
necessities
 Discretionary income: money left over after
covering taxes and necessities
Willingness to Spend is
closely related to Ability to Buy
 “Cash or credit”
Legal/Regulatory and Political Forces
Legislation
Legal decisions by courts
Regulatory agencies
Self-regulatory forces
Marketers
 Adjust to conditions
 Influence through contributions
Legal and Regulatory Forces
Regulatory Agencies
 Federal Trade Commission (FTC)
 Food and Drug Administration (FDA)
 Federal Communications Commission (FCC)
 Environmental Protection Agency (EPA)
Self-Regulatory Forces
 Better Business Bureau
 National Advertising Review Board (NARB)
Technology
Technology is the
application of knowledge
and tools to solve
problems and/or perform
tasks more efficiently
 Inventions or innovations
Technology
Characterized by:
 Falling costs
 Increasingly new
products/rapid obsolescence
of old products
Can transform entire
industries and/or societies
Social
The influences in a society
and its culture(s) that
change people’s attitudes,
values and/or lifestyles
Examples
 Demographic shifts
 “Going green”
 Increasing customer
sophistication
 Population migration