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The Changing
Marketing Environment
Chapter 3
The Uncontrollable Environment
 This
chapter takes an in-depth look
at the uncontrollable marketing
environment in Canada today.
 Organizations cannot effect the
marketing environment, instead they
are affected by it. Successful
organizations spot trends in the
environment and capitalise on these
trends.
The Environmental Forces
 Remembering
from Chapter 1, The
uncontrollable factors include:
– Social Forces
– Economic Forces
– Technological Forces
– Competitive Forces
– Regulatory Forces
The Environmental Forces
 Social
Forces
– Social forces relate to changes, and events that are
occurring in society. Key indicators of change are:
 Demographic
Shifts
– Demographics is a study/measure of peoples ages,
sex, income levels, where they live, and ethnicity.
– Be aware or key terms such as Mature Housholds,
Baby Boomers, Generation X, Blended Families and
Regional Marketing.
 Cultural
Changes
– Culture is a reflection of a societies shared values
and Beliefs. Attitudes are changing and so is the
makeup of our society. People are more conscious
of Value and the Natural Environment
The Environmental Forces
 Economic
Forces
– Economics deals with issues of income
and expenditures in our society. Key
measures of change in economic
conditions arise from changes in:
 The
Canadian economy at large
(macroeconomics)
 Consumer Income
 Gross
Income - Taxes = Disposable Income
 Disposable Income - necessities =
Discretionary Income
The Environmental Forces
 Technological
Forces
– Technology is changing faster than ever.
Witness how quickly your new computer
will become obsolete.
– This rapid change poses quite a large
challenge for many organizations.
 E-Business
– The Internet has made doing business
anywhere & anytime possible.
The Environmental Forces
 Competitive
Forces
– Competition refers to the number of
alternatives a consumer has when
buying a particular product or service.
 There
are varying degrees of competitive
environments.
– Monopoly - No Competition - only one seller
– Oligopoly - Limited Competition - Two or three
sellers
– Monopolistic Competition - Many sellers offering
substitutable products (Coke, Pepsi, Orange
Juice)
– Pure Competition - Many sellers selling similar or
same products.
The Environmental Forces

Components of Competition
– Barriers to Entry
 Competition
may affect a company’s ability to enter a
market easily. There may be many Barriers to Entry
in place to limit the growth of competition
 Suppliers of raw material may help limit competition
in an industry by refusing to sell to a new entrant.
 Buyers of products may aid in limited competition by
being reluctant to buy from an new entrant into the
market.
 Competitors may try to limit competition buy forcing
new entrants out of the market.
 Global Competition has helped to increase the overall
level of competition. Many companies are forming
world-wide partnerships called Strategic Alliances.
The Environmental Forces
 Regulatory
Forces
– Regulation is a basic set of rules/laws set down
by either the industry in question (selfregulation) or by government that effects how
that business operates.
– Most regulation is designed to:
 Protect Customers
 Protect Competition
– To stem off government imposed regulation,
many industries have decided to self-regulate.
– Consumerism is a movement among consumers
to fight for better protection from bad or corrupt
business practices and bad products.