Strategic Marketing Management

Scanning the Scanning the Marketing Marketing Environment Environment

Overview : Why Study of Environment is Why Study of Environment is

Important? Important? Opportunities or Threats come from it. Opportunities or Threats come from it.
Strategic fit is critical for success and Strategic fit is critical for success and environmental scanning helps company keep in environmental scanning helps company keep in touch touch Marketing more then any other functional Marketing more then any other functional department has the responsibility to carry department has the responsibility to carry this out this out
PIA: Sales are slipping or stagnant. PIA: Sales are slipping or stagnant. Reasons could be greater competition, increasing Reasons could be greater competition, increasing costs, poor quality etc. costs, poor quality etc.

Opportunities
Un met needs are opportunities Un met needs are opportunities
Opportunities can be found by Opportunities can be found by identifying trends identifying trends

Trend is a direction or sequence Trend is a direction or sequence of events with momentum and of events with momentum and direction direction

Fads Trends and Mega Fads Trends and Mega Trends Trends

Is It a Trend or a Fad?
A trend is a direction or sequence of events A trend is a direction or sequence of events that have some momentum and durability. that have some momentum and durability.
Many Opportunities are found by identifying trends. Many Opportunities are found by identifying trends.

1. Does it fit with basic lifestyle changes? 2. What are the benefits? 3. Can it be personalized? 4. Is it a trend or a side effect? 5. What other changes have occurred? 6. Who has adopted the change?

Forces in the environment

Macro vs Micro Internal vs External Controllable vs Uncontrollable

Factors in the External Environment

Marketing Mix
Ever-Changing Marketplace Social & Social & Cultural Cultural

Demographics Demographics

Natural Natural

Economic Economic Conditions Conditions

Competition Competition Product Product Place Place Promotion Promotion Price Price

Target Market
Technology Technology

Political & Political & Legal Factors Legal Factors

Environmental Scanning

External Environmental Factors (MACRO)

Political & Legal Political & Legal Political & Fiscal Policy. Political & Fiscal Policy. Interest Groups, Interest Groups, Consumerism, Deregulation, Consumerism, Deregulation, Legislation, Legislation, Most Important due to Most Important due to accelerated rate of change. accelerated rate of change. Unlimited opportunity for Unlimited opportunity for innovators.. innovators Raw material shortage, Raw material shortage, increased energy cost, increased energy cost, pollution, depleting natural pollution, depleting natural resources resources

Technology Technology

Natural Natural

External Environmental Factors (MACRO)

Demographic Demographic Economic Conditions Economic Conditions Competition Competition Statistical Study of human Statistical Study of human population: Gender, regions, population: Gender, regions, cities,ethnic etc cities,ethnic etc Interest rates, inflation, income Interest rates, inflation, income distribution, business cycle distribution, business cycle Closest Competitor is with Closest Competitor is with similar 4Ps and is called a similar 4Ps and is called a strategic group strategic group Most difficult to change. Role Most difficult to change. Role of women, health & fitness. of women, health & fitness. Subcultures & High // Low Subcultures & High Low Context culture Context culture

Social & Cultural Social & Cultural

Demographics
Population Growth Age Mix Ethnic and other markets Educational groups Geographic shifts in Population Mass markets to Micro markets

Demography: Changing Role of Women

84.5 81.1 80.0

% Employed

58.0 51.5

63. 63.0 0

37.8

1960

1985

1995

2005

Demography: Youth: 18- to 34-Year Olds a pack of cigarettes a day. 17% smoke more than a half
42% use vitamins or supplements or try to eat mostly organic foods. 59% almost always read labels to find out about content of food. 36% restrict the amount of red meat they eat. 15% drink three or more cups of coffee a day.
Source: Lifestyles of the Young, Old and In-Between,Wall Street Journal, 28 June 1996, p. R4.

Demography: Boomers: 35- to 54-Year Olds 21% smoke more than a half a pack of cigarettes a
day. 51% use vitamins / supplements. Try to eat mostly organic foods. 63% almost always read labels to find out about content of food. 49% restrict the amount of red meat they eat. 32% drink three or more cups of coffee a day.

Source: Lifestyles of the Young, Old and In-Between,Wall Street Journal, 28 June 1996, p. R4.

Demography: Seniors: 55 Years and Over

14% smoke more than a half a pack of cigarettes a day.

60% use vitamins or supplements or try to eat mostly organic 51% restrict the amount of red meat they eat. 30% drink three or more cups of coffee a day.

64% almost always read labels to find out about content of fo

Source: Lifestyles of the Young, Old and In-Between,Wall Street Journal, 28 June 1996, p. R4.

Social-Cultural Environment

Of the Universe

Of Oneself Views That Express Values Of Society

Of Others

Of Nature

Of Organizations

Social-Cultural Environment High Persistence of Core Cultural beliefs Existence of sub Cultures Shifts of secondary cultural values

Culture: Multiculturalism.
Niche Niche Marketing Marketing

Marketing Marketing Strategies Strategies for for Multicultural Multicultural Markets Markets

Adapting Adapting Promotion Promotion

Stitching Stitching Niches Niches

Technological Environment and High R & D Accelerating Pace of Varying

Change Budgets Issues in the Technological Environment

Unlimited Opportunity for Innovation

Increased Regulation

To protect Consumers- Protect companies To protect Consumers- Protect companies from unfair competition- Protect Society from unfair competition- Protect Society from uncontrolled Behavior from uncontrolled Behavior

Economic Factors

Income Distribution Saving Debt and Credit availability Inflation Recession

Economic Factors Affecting Marketing

Key Economic Key Economic Factors of Interest to Factors of Interest to Marketers Marketers

Distribution of Distribution of Consumer Income Consumer Income (Socio-econ Groups) (Socio-econ Groups) is higher than increase is higher than increase in personal income in personal income

Inflation: If price rise Inflation: If price rise

Econ growth period. Econ growth period. Part of Business Cycle Part of Business Cycle (Prosperity, Recession, (Prosperity, Recession, Depression, Recovery) Depression, Recovery)

Recession: Low Recession: Low

Types of Economies:
Type Type
Subsistence Subsistence Raw Material Raw Material Exporting Exporting
Industrializing Industrializing

Description Description
Agricultural based Afghanistan Agricultural based Afghanistan Saudi Arabia, Indonesia Saudi Arabia, Indonesia Malaysia, Singapore Malaysia, Singapore High Saving rate, availability of credit High Saving rate, availability of credit

Industrial Industrial

Lessons to learn
Adjust yourself to the external Adjust yourself to the external environment environment Avoid Dinosaur Dilemma. Avoid Dinosaur Dilemma. Plan for change Plan for change Avoid surprises. Avoid surprises. Create Opportunity from Environment Create Opportunity from Environment Avoid them to become threats. Avoid them to become threats.