Marketing Environment Analysis

• Continuously monitor both internal & external environments in marketing
• Listen to the consumer in marketing
• Businesses need to rethink how they offer products and services to consumers
• Keep an eye on competitors

A Marketing Environment Analysis Framework

• Includes company, consumers, microenvironment, macroenvironment and competition
• Political/Legal, Culture, Demographics, Social/Natural, Economic, and Technology surround the Company in this framework
• Microenvironment includes corporate partners

Microenvironmental Factors

• Includes company, consumers, microenvironment and competition
• Corporate Partners are included

Company Capabilities

• Core competency = Satisfy customer needs
• Knowledge, facilities, patents, technology, people etc.
• These are applied to target markets and products

Competition

• Identify and analyze direct and indirect competitors
• Look at the strengths and weaknesses of competitors
• Competitive intelligence (CI) is used to collect and synthesize information
• Apple versus Samsung had a patent infringement lawsuit

Corporate Partners

• Firms form alliances, few work in true isolation

• Align with suppliers, corporate partners, etc.

• Company's stockholders is NOT considered part of a company's immediate environment

• Macroenvironmental factors include Culture, Demographics, Social/Natural, Economic, and Technology

Culture

• Country culture versus regional subcultures

Demographics

• Characteristics of human populations and segments used to identify consumer markets

Generational Cohorts

• Classification starts in 1946
• Marketers position their products and services differently depending on generational cohort they are targeting
• Generational cohorts include: Baby Boomers (1946-1964), Gen X (1965-1980), Gen Y (1981 to 1992), and Gen Z born after 1993

Income

• Purchasing power is tied to income
• Statistics Canada tracks income
• Many middle-class families feel the decline in purchasing power in recent years
• The top 10% of Canadians have family income in excess of $226,000
• Canadians are classified in 3 distinct groups based on income and other factors: upper class, middle class, lower class
• Education is related to income, which determines spending power

Gender

• Male/female roles have been shifting
• Marketing has changed to reflect shift in gender roles

Ethnicity

• Ethnic composition of Canada is changing
• 1/5 Canadians not born in Canada
• By 2030, population growth will be mainly attributed to immigration
• Middle class of Canadians can afford a good life most of the time, tend to be careful about spending, and are often value-conscious.

Technological Advances

• Technology has impacted every aspect of marketing: new products, new forms of communication, new retail channels

Artifical Intelligence

• Artificial Intelligence (AI) solutions rely on computer systems to perform tasks that require human intelligence
• Speech recognition, decision-making, or translations are examples

Robotics

• Robotics applications typically perform work that previously was the responsibility of human workers

Internet of Things

• Internet of Things (IoT) includes multiple "smart devices" with internet-connected sensors
• Devices include refrigerators, dishwashers, and coffee machines, combine the data they have collected to help both consumers and companies consume more efficiently
• Foreign currency fluctuations and the combined inflation and interest rates affect a firm's ability to market goods and services

Political/legal Environment

• Includes the Competition Act, Consumer Packaging and Labelling Act, Food and Drugs Act, Access to Information Act, Patent act, North American Free Trade Agreement (NAFTA)
• Government enacted laws promote fair trade and competition by prohibiting formation of monopolies or alliances that would damage a competitive marketplace

Social and Natural Trends

• Shape consumers values
• Trends change over time: Greener consumers, privacy concerns, time-poor society, health and wellness concerns, Efficient distribution of food

Greener Consumers

• Many Canadians care about society's impact on the environment
• Over 90% of Canadians feel individuals can reduce air pollution
• Green marketing involves a strategic effort by firms to supply customers with environmentally friendly merchandise

Privacy Concerns

• Loss of privacy, identity theft, do not call, do not email

Time-Poor Society

• In the majority of families, most parents work
• Consumers have many more choices regarding leisure time
• Many consumers multitask

Health and Welness Concerns

• 63.5% of adults are categorized as obese or overweight
• Childhood obesity has doubled and teenage obesity has tripled in the past 20 years
• CSPI has proposed guidelines for responsible food marketing to children, which outlines a variety of changes to advertising directed at children
• Health and wellness concerns have also spurred numerous mobile apps which help customers get or stay in shape

Efficient Distribution of Food

• Food has always defined social trends that are central to people's lives and environments
• Trends in eating habits establish markets for diet-related products
• Food waste makes up 28%, of the garbage in municipal landfill sites, with Canada ranked 3rd worst in the world
• Food insecurity is another major issue with approximately 18% of Canadian households were found to be food insecure in 2022

Macro Environmental Factors

• CDSTEP VS PESTEL

CDSTEP

• Covers culture, demographics, social/natural trends, technology, economic, and the political/legal environment

PESTEL

• PESTEL looks at the political, economical, social, techological, environmental, and legal environments
• How the government intervenes in the economy, this could include tax policy, labor law, tariffs, political stability
• Economic environment includes economy growth, exchange rates, inflation rates, and interest rates, and it affects how businesses operate and make decisions
• Social environment includes cultural aspects, and trends in social factors, shared beliefs and attitudes of the population; can also include culture, health consciousness, population growth rate, career attitudes, age distribution
• Technology includes R & D, automation, technology incentives, and rates of technology change
• Environmental includes ecological and environmetnal aspects such as weather, climate and climate change; can affect affect industries such as tourism, farming, and insurance
• Legal includes discrimination law, consumer law, antitrust law, employment law, and health and safety law, and can it can affect how a company operates, its can affect it's costs, and demand for it's products

Explore the framework for marketing environment analysis, including internal and external factors. Understand the microenvironment, macroenvironment, company capabilities, and the importance of monitoring competition. Learn how businesses can rethink their offerings based on consumer insights.