Download MR1100C3 - Changing Marketing Environment

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.
– See Social Media Slideshow
• 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 (self-regulation) 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.