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CHAPTER FOUR
Evaluating
Opportunities in the
Changing Marketing
Environment
For use only with
Perreault and McCarthy
texts.
© 2006 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
When we finish this lecture you should
1. Know the variables that shape the environment
of marketing strategy planning.
2. Understand why company objectives are
important in guiding marketing strategy
planning.
3. See how the resources of a firm affect the
search for opportunities.
4. Know how the different kinds of competitive
situations affect strategy planning.
5. Understand how the economic and technological
environment can affect strategy planning.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
When we finish this lecture you should
6. Know why you might be sent to prison if you
ignore the political and legal environment.
7. Know about the cultural and social
environment and key population and income
trends that affect it.
8. Understand how to screen and evaluate
marketing strategy opportunities.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The Marketing Environment
Resources
and Objectives
of the Firm
Competitive
Environment
Direct Marketing
Environment
Cultural and
Social
Environment
Political and
Legal Environment
Economic
Environment
External Marketing
Environment
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Technological
Environment
Objectives Should Set Firm’s Course
Three
Basic Objectives
Provide
Guidelines
Socially and
Economically
Useful Function
Develop an
Organization
Earn Profit
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Mission Statement and Objectives
Mission
Statement
Company
Objectives
Production
Objectives
Finance
Objectives
Product
Objectives
Personal Selling
Objectives
Marketing
Objectives
Place
Objectives
HR
Objectives
Promotion
Objectives
Mass Selling
Objectives
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
R&D
Objectives
Price
Objectives
Sales Promotion
Objectives
Company Resources May Limit
Search for Opportunities
Financial Strength
Producing Capability
and Flexibility
Marketing Strengths
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Marketing Strengths
+
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The Competitive Environment
Avoid Head-On Competition!
Know the Market Situation!
Monopoly
Monopolistic
Competition
Oligopoly
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Pure
Competition
Monopolistic Competition
+
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Avoiding Head-on Competition
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Analyzing Competition
Competitor
Analysis
Competitive
Advantage
Key
Concepts
Competitive
Barriers
Competitive
Rivals
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Marketers Need Information About
Competitors
Seek Information About
Competitors
Ethical Issues
Competition May Vary
From Country To Country
Direct Competition Can’t
Always Be Avoided
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The Economic Environment
Global
Economy
Rapid Change
Key
Economic
Forces
Interest Rates
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The Technological Environment
+
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The Political Environment
Regional
Economic
Groupings
Nationalism
Characteristics
of the Political
Environment
Consumerism
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Exhibit 4-3
The Legal Environment
+
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Consumer Protection
+
“Let the Seller Beware”
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The Cultural and Social Environment
+
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People with Money Make Markets
Search for
Growing Markets
Other Countries
Current Population
Population Trends
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Worldwide Population Growth
+
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Other Population Trends
Increasing Density
Increasing Urbanization
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
No Money, No Market!
Gross National Income
(GNI)
Income earned by
foreigners in the nation
Gross
Domestic Product
(GDP)
GNI / Country’s Population Size = Per Capita Income
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Issues Related to Development
Literacy and
marketing
problems
What do
third world
consumers
really need?
Much segmenting
may be needed
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Exhibit 4-5a
Where Does Your State Stand?
+
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Exhibit 4-5b
Where Are the People Today and Tomorrow?
+
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
US Population Mobility
Population
Mobility
Rural to
Urban
Urban to
Suburban
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Growth Trends Young and Old
Key Trends
Population
Growing, but…
Birthrate – Boom
or Bust?
Graying of
America
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Appealing to the “Matures”
+
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Not Just for the Younger Generation
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Teenagers – They’re Back
High
Growth
Buying
Power
Different
Needs
Unique
Culture
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Keeping Competitive in the SocialCultural Environment
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Using Screening Criteria to
Narrow Down to Strategies
Product B
Product A
Sales
Sales
Dollars
Total cost
0
Total cost
1
2
3
4
5
0
1
2
3
Years
Years
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
4
5
Planning Grids Help Evaluate a
Portfolio of Opportunities
Industry Attractiveness
Low
Medium
High
Medium
No Growth
Low
Business Strength
High
Borderline
Growth
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Multiproduct Firms Have a Difficult
Strategy Planning Job
+
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Exhibit 4-10
Evaluating Opportunities in International Markets
Insensitive
Industrial
products
Sensitive
Basic
commodity-type
consumer
products
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Consumer
products that
are linked to
cultural
variables
Interactive Exercise: Wheel of
Opportunity
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Key Terms
• Mission statement
• Competitive
•
•
•
•
•
•
•
environment
Competitor analysis
Competitive rivals
Competitive barriers
Economic and
technological
environment
Technology
Internet
Nationalism
•
•
•
•
•
•
•
North American Free Trade
Agreement (NAFTA)
Consumerism
Cultural and social
environment
Gross domestic product
(GDP)
Metropolitan Statistical
Area (MSA)
Senior citizen group
Strategic business unit
(SBU)
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin