Marketing Environment Analysis - Chapter 3

Chapter 3: Analyzing the Marketing Environment

• The chapter analyzes the marketing environment, focusing on internal and external factors influencing a firm's strategy.
• Learning Objectives:
  • Outline how factors in a firm's microenvironment influence its marketing strategy.
  • Identify factors in a firm's macroenvironment and explain how they influence overall marketing strategy.
  • Identify important social and natural trends that impact marketing decisions.

Analyzing the Marketing Environment!

• Continuously monitor both internal and external environments.
• Technology influences consumer buying behaviors and demands.
• Businesses need to rethink how they offer products and services to consumers.

A Marketing Environment Analysis Framework

• The framework visually represents the various factors affecting a company's marketing decisions.
  • Microenvironment: Factors close to the company: Company capabilities, Consumers, Competition, Corporate Partners.
  • Macroenvironment: Broader societal factors: Culture, Demographics, Political/Legal, Economic, Technology, Social/Natural.

Microenvironmental Factors

• Company: Core competency—satisfying customer needs (knowledge, facilities, technology, people).
• Consumers: Focus on consumer needs and preferences.
• Competition: Identifying direct and indirect competitors, analyzing strengths and weaknesses, utilizing competitive intelligence.
• Corporate Partners: Aligning with suppliers and other partners for effective distribution.

Competition

• Identifying and analyzing direct and indirect competitors.
• Understanding strengths and weaknesses of competitors.
• Use of Competitive Intelligence (CI) to collect and synthesize information.

Bulldog - Taking a Bite Out of the Competition!

• Bulldog founders identified a niche in the male grooming product market.
• Created high-quality, natural skincare products.
• Won awards for Best Men's Face Cream by 2010.
• Product line includes face wash, moisturizers, shower gels, and body lotions.

Corporate Partners

• Firms often work in alliances and collaborations.
• Align with suppliers and other corporate partners.

Test Your Knowledge (Page 10-11)

• Which of the following is not part of a company's immediate environment: Company's corporate partners, stockholders, competition, company capabilities.
  • The correct answer is Company Capabilities.

Macroenvironmental Factors

• Includes broader societal factors such as culture, demographics, political/legal, economic, technology, and social/natural trends. Acronym for memory: 260STER.

Culture

• Country culture vs. regional subcultures.
• Coca-Cola uses similar ads in different countries targeting specific cultures.

Demographics

• Characteristics of human populations and segments used to identify consumer markets.
  • Examples: Age, gender, race, behavior, dress.

Generational Cohorts

• Baby Boomers, Generation X, Generation Y (aka Millennials), Generation Z (aka Digital Natives), Seniors
• Marketers position their products differently based on generational cohorts.

Income

• Purchasing power is tied to income.
• Statistics Canada tracks income trends.
• Middle-class families may feel a decline in purchasing power recently.
• Top 10% of Canadians have a high family income ($226,000).

Education

• Education is related to income, determining spending power.

Gender

• Male/female roles are shifting.
• Marketing is adapting to reflect these shifts.
  • Example: Female gamers participating in tournaments, reflected in the advertisement.

Ethnicity

• Canada's ethnic composition is changing.
• Immigration is responsible for most population growth.
• Will be mainly attributed to immigration by 2030.

Technology

• Technology impacts marketing in several aspects: New products, New forms of communication, new retail channels.
• AI, robotics, Internet of Things, all influence marketing increasingly.

Artificial Intelligence (AI)

• Uses computer systems for tasks requiring human intelligence (speech recognition, decision making, translations).
• Marketers use AI for: Advanced customer segmentation, Media selection and buying, Customer engagement.
• Examples include The North Face using AI to help customers with purchases.

Robotics

• Robotics perform work previously done by human workers.
  • Examples: Automated delivery of products.

Internet of Things (IoT)

• Multiple "smart devices" with Internet connections enable collection and combination of data to improve consumer and business efficiency.
  • Examples: Smart refrigerators, dishwashers, and other appliances collecting and utilizing data.

Economic Situation

• Foreign currency fluctuations
• Combined effect of inflation and interest rates on a firm's ability to market goods and services.

Political/Legal Environment

• Laws influence business strategies, including: Competition Act, Consumer Packaging and Labelling Act, Food and Drugs Act, Access to Information Act, Patent Act, NAFTA agreement.

Social and Natural Trends

• Shaping consumer values
• Global Goals of Sustainable Development (17 goals of the United Nations).

Green Consumers

• Green marketing involves strategic efforts to supply environmentally friendly products.

Privacy Concerns

• Loss of privacy, identity theft, 'Do Not Call' and 'Don't Email' regulations.

Time-Poor Society

• Most families have working parents.
• Consumers have more leisure-time choices.
• Many consumers multitask.

Efficient Distribution of Food

• Food defines some social trends.
• Trends around food and eating create markets for diet-related products.
• Food waste is a significant issue.

Health and Wellness Concerns

• Obesity and overweight are significant health concerns.
• Child and teenage obesity rates have increased.
• Guidelines for Responsible Food Marketing to Children.
• Wellness concerns have fueled mobile apps for tracking exercise, calorie intake, and sleep cycles.