Chapter 3 Analyzing The Marketing Environment PDF

Chapter 3 Analyzing the Marketing Environment © 2023 McGraw Hill Limited 3-1  Chapter 3: Analyzing the Marketing Environment LEARNING OBJECTIVES LO1 Outline how the factors in a firm’s microenvironme...

Chapter 3 Analyzing the Marketing Environment © 2023 McGraw Hill Limited 3-1  Chapter 3: Analyzing the Marketing Environment LEARNING OBJECTIVES LO1 Outline how the factors in a firm’s microenvironment influence its marketing strategy LO2 Identify the factors in a firm’s macroenvironment and explain how they influence the overall marketing strategy LO3 Identify important social and natural trends that impact marketing decisions © 2023 McGraw Hill Limited 3-2  Analyzing the marketing environment! ⚫ Important to continuously monitor both internal & external environments ⚫ Technology influences consumers buying behaviours and demands ⚫ Businesses need to rethink how they offer products & services to consumers ⚫ Need to key an eye on additional long-term opportunities © 2023 McGraw Hill Limited 3-3 A marketing environment analysis framework © 2023 McGraw Hill Limited 3-4 Microenvironmental factors © 2023 McGraw Hill Limited 3-5 Company capabilities Core competency = Satisfy customer needs Knowledge, facilities, patents, technology, people etc. applied to Target markets, products etc. © 2023 McGraw Hill Limited 3-6  Competition Identify and analyze direct and indirect competitors Know strengths & weaknesses Competitive Intelligence (CI) used to collect and synthesize info Bulldog Skincare’s focus on sustainability is evident with products such as its Bamboo Razor. © 2023 McGraw Hill Limited 3-7  Bulldog - Taking a bite out of the competition! Bulldog founders identified a niche in the male grooming product market Created a high-quality, natural skincare product By 2010 were inning awards for Best Men’s Face Cream Today, their product line includes face wash and moisturizers, shower gels and body lotions, as well as razors, Bulldog Skincare’s focus on sustainability beard-care creams, and oils is evident with products such as its Bamboo Razor. © 2023 McGraw Hill Limited 3-8  Corporate Partners Firms are part of alliances – few work in isolation Align with suppliers, corporate partners etc. Nau works with its corporate partners to develop socially responsible outdoor (left) and urban (right) apparel. © 2023 McGraw Hill Limited 3-9 Macroenvironmental factors Acronym: CDSTEP © 2023 McGraw Hill Limited 3-10  Culture Culture Country Culture vs. Regional Subcultures Some firms, like Coca-Cola, bridge the cultural gap by using very similar advertising in different countries, as illustrated by these two ads using the same model and tagline. The left photo is for the English-speaking market; the right photo is for the Spanish-speaking market. © 2023 McGraw Hill Limited 3-11  Demographics Characteristics of human populations & segments used to identify consumer markets. Age Sex Lifestyle Race Value Income Personality Religion Interests Geographic Location Purchase Occasion, Usage Rate, Brand Loyalty, Benefits Sought © 2023 McGraw Hill Limited 3-12  Generational cohorts Generation Z (aka Digital Natives) Baby Boomers Generation X Generation Y Seniors (aka Millennials) Marketers position their products and services differently depending on which generational cohort they are targeting. A group of people of the same generation. © 2023 McGraw Hill Limited 3-13  Generational Cohorts classifications staring in 1946 Generation Z Generation Y Generation X Baby Boomers Generational Cohort Range of birth years Born after 1993 1981 to 1992 1965 to 1980 1946 to 1964 © 2023 McGraw Hill Limited 3-14  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 percent of Canadians have family income in excess of $226,000. © 2023 McGraw Hill Limited 3-15  Income ⚫ Canadians are classified in three distinct groups based on income and other factors such as background, education, and occupation ⚫ Upper class ⚫ Middle class ⚫ Lower class © 2023 McGraw Hill Limited 3-16  Education Education is related to income, which determines spending power © 2023 McGraw Hill Limited 3-17  Gender Male/female roles have been shifting Marketing has changed to reflect these shifts To encourage female gamers, in Bandai Namco Entertainment’s recent “Bonnie- and-Clyde” tournament, teams composed of one male and one female player battled one another for prize money. © 2023 McGraw Hill Limited 3-18  Ethnicity Ethnic composition of Canada is changing 1/5 Canadians not born in Canada Immigration has been responsible for over 75 percent of Canada’s total population growth since 2016 By 2030, population growth will be mainly attributed to immigration (left) Sephora used an all-Indigenous cast and crew to celebrate National Indigenous History Month. (right) Harley-Davidson created the Tough Turban, protective headgear for Sikh riders. © 2023 McGraw Hill Limited 3-19  Technological advances Technology has impacted every aspect of marketing: ⚫ New products ⚫ New forms of communication ⚫ New retail channels Netflix relies on its advanced technological capabilities not just to suggest which movies we should watch but also to develop new content that it is confident we will like. © 2023 McGraw Hill Limited 3-20  Artificial Intelligence Artificial Intelligence (AI) solutions, which rely on computer systems to perform tasks that require human intelligence, such as speech recognition, decision making, or translations. © 2023 McGraw Hill Limited 3-21  Artificial Intelligence Marketers that are embracing (AI) primarily use it for: ⚫ Advanced customer segmentation ⚫ Media selection and buying The North Face uses AI, with its Expert Personal Shopper program, to determine what customers are looking for. By asking questions, the program selects items that might meet a shopper’s needs and presents them onscreen. ⚫ Customer engagement © 2023 McGraw Hill Limited 3-22  Robotics Robotics applications typically perform work that previously was the responsibility of human workers. Retailers are experimenting with delivering products using drones. © 2023 McGraw Hill Limited 3-23  Internet of things Internet of Things (IoT) emerges when multiple “smart devices” with Internet-connected sensors, such as refrigerators, dishwashers, and coffee machines, combine the data they have collected to help both consumers and companies consume more efficiently. © 2023 McGraw Hill Limited 3-24  Economic situation Foreign currency fluctuations Combined with inflation and interest rates affect a firm’s ability to market goods and services Tourists from other countries often come to Canada to shop because the value of the dollar is low compared with their own currency. © 2023 McGraw Hill Limited 3-25  Political/legal environment ⚫ Competition Act ⚫ Consumer Packaging and Labelling Act ⚫ Food and Drugs Act ⚫ Access to Information Act ⚫ Patent Act ⚫ North American Free Trade Agreement (NAFTA) → Changed July 1, 2020 under American President D. Trump to the Canadian, United States, Mexico Trade Agreement (CUSMA). Major trade decisions changed including how we trade Agriculture, Automotive Industry Rules, Labour Rights, Intellectual Property Right, Environmental Protection, Digital Trade, Sunset Clause, Dispute Resolutions, and De Minimis Thresholds. © 2023 McGraw Hill Limited 3-26  Social and natural trends ⚫ Shape consumer values ⚫ 17 Global Goals of Sustainable Development United Nations, “Sustainable Development Goals: 17 Goals to Transform Our World,” Last modified March 18, 2019. The content of this publication has not been approved by the United Nations and does not reflect the views of the United Nations or its officials or Member States. © 2023 McGraw Hill Limited 3-27  Greener Consumers Green marketing involves a strategic effort by firms to supply customers with environmentally friendly merchandise. Demand for green-oriented products is a boon to firms like Natasha Tonić’s line of swimwear made from hemp. © 2023 McGraw Hill Limited 3-28  Privacy concerns ⚫ Loss of privacy ⚫ Identity theft ⚫ Do not call ⚫ Do not e-mail © 2023 McGraw Hill Limited 3-29  Time-poor society In the majority of families, most parents work Consumers have many more choices regarding leisure time Many consumers multitask Time-poor consumers multitask to cope with their lack of leisure time. © 2023 McGraw Hill Limited 3-30  Efficient Distribution of Food ⚫ Food has always defined social trends that are central to people’s lives and environments. ⚫ Trends associated with food and eating establish markets for diet-related products. ⚫ Issues with food waste, making up 28 percent of the garbage in municipal landfill sites, with Canada ranked third for being the worst food waste offender in the world. ⚫ One reason for the waste is simply because we produce more food than is needed. © 2023 McGraw Hill Limited 3-31  Health and Wellness Concerns ⚫ In Canada, 63.5 percent of adults are categorized as obese or overweight. ⚫ In the past 20 years, child obesity has doubled, and teenage obesity tripled in North America ⚫ (CSPI) has proposed Guidelines for Responsible Food Marketing to Children, which outlines a variety of changes to advertising directed at children. © 2023 McGraw Hill Limited 3-32  Health and Wellness Concerns Health and wellness concerns have also spurred a number of mobile apps, many of which help customers get or stay in shape by tracking exercise, calorie intake, and sleep cycles. The practice of yoga is growing as more consumers embrace healthy lifestyles. © 2023 McGraw Hill Limited 3-33