MKT 301 Chapter 2

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2
Chapter
The Dynamic Marketing Environment
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 firms marketing.
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Chapter 2 Theme

• Looking for opportunities while avoiding threats
  in the marketplace

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Key Factors that Help or Hurt Company Success

• Companys Internal Environment
• Companys 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

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Two Levels of External Forces have an Effect on
Marketing

• Micro influences consist of suppliers, marketing
  intermediaries, and customers.
• Macro influences include demographics, economic
  conditions, culture, and laws.

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Six Interrelated Macroenvironmental Forces can
Affect an Organizations Marketing Program

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

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Environmental Monitoring

• Environmental Monitoring (Scanning) is the
  process of
• gathering information regarding the external
  environment,
• analyzing that information, and
• forecasting the impact of whatever trends the
  analysis suggests.

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Macroenvironmental Forces
Economic conditions
Demo- graphics
Competition
COMPANYS MARKETING PROGRAM
Social and cultural forces
Technology
Political and legal forces
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Demographics

• Age
• Income
• Gender
• Education
• Race/Ethnicity

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Some Key U.S.Demographic Trends
Changing Age Structure Population is aging many
divisions
Changing American Family Later marriage, fewer
children, working women, and nontraditional
households
Geographic Shifts Moving to the Sunbelt, suburbs,
micropolitan areas
Better-Educated More White-Collar Increased
college attendance and white-collar workers
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Race/Ethnicity

• Whats happening in U.S. in regards to
  race/ethnicity?
• Increasing Diversity..
• NM is a window to the future. . . .

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Social Forces
Changing Minorities

• Major Ethnic Groups as a percent of total
• 2001 Wht/NH (71.0) Black (12.9) Hispanic (12.1)
• 2005 Wht/NH (69.3) Black (13.1) Hispanic (13.3)
• 2020 Wht/NH (63.8) Black (13.8) Hispanic (17.0)
• 2050 Wht/NH (52.8) Black (14.7) Hispanic (24.3)

Source www.census.gov January 13, 2000
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Social Forces
Changing Age Structure
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Social Forces
Changing Age Structure
1990
Source www.census.gov January 27, 2004
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Social Forces
Changing Age Structure
2000
Source www.census.gov January 27, 2004
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Social Forces
Changing Age Structure
2025
Source www.census.gov January 27, 2004
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Social Forces
Changing Family Structure
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Social Forces
Population Growth
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As of the latest estimate

• What is the population of the United States?
• Approximately 306 Million people

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Age Distribution of the U.S. Population
Baby Boomer Generation

(78 million people born 1946-1964)
One of the most powerful forces
shaping the marketing environment, 30 of
population
Generation X
(45 million people born 1965-1976) More
skeptical, cynical of frivolous marketing pitches
promising easy success
Echo Boomer Generation


(72 million people born 1977-1994)
Fluent and comfortable with computer, digital,
and Internet technology (Net-Gens)
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Importance of Age

• Why are Baby-Boomers so important to Marketers?
• 76 million of them
• Who are Baby-Busters / Gen. X-ers?
• Generation Y

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Economic Conditions

• The Business Cycle - 3 stages
• Prosperity
• Recession
• Recovery

Learn it on your own...
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Economic Conditions
Inflation - Increase in prices of goods and
services. Interest Rates - How do they affect
marketers? Donnies Z-28 purchase
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Political and Legal Forces

• Monetary and Fiscal Policies
• Social Legislation and Regulation

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Social and Cultural Forces

• Environmental Consciousness
• Changing Gender Roles
• Changing back some though. . . . More manly men.
• A Premium on Time
• Physical Fitness and Health

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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.

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Technological 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.

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Environmental Monitoring

• Environmental Monitoring (Scanning) is the
  process of
• gathering information regarding the external
  environment,
• analyzing that information, and
• forecasting the impact of whatever trends the
  analysis suggests.

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Additional Environmental Monitoring Examples
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KOSS Corporation (1981)

• Show tape (10 min.)
• What happened to KOSS?

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Whats going on in the Macroenvironment that
Sirius/XM Needs to be aware of?
(opportunities/Threats)
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Who are their Competitors now?Who will they be
in the future?
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Is anything happening with Laws, Govt. Legal
Issues???
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Whats going on in the Economic Environment?
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Any changes in the Social Environment?
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Any changes in the Technological Environment?
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