Shekter_1ce_PPT_accessible_fullppt_031 (1).pptx

Marketing Chapter 3 The Marketing Environment Copyright © 2021 Pearson Canada, Inc. 3-1 Learning Objectives After studying this chapter you should be able to: 3.1 Analyze the microenvironment 3.2 Analyze the macroenvironment Copyright © 2021 Pearson Canada, Inc. 3-2 The Microenvironment (1 of...

Marketing Chapter 3 The Marketing Environment Copyright © 2021 Pearson Canada, Inc. 3-1 Learning Objectives After studying this chapter you should be able to: 3.1 Analyze the microenvironment 3.2 Analyze the macroenvironment Copyright © 2021 Pearson Canada, Inc. 3-2 The Microenvironment (1 of 6) Figure 3.1 The Microenvironment Copyright © 2021 Pearson Canada, Inc. 3-3 The Microenvironment (2 of 6) • Define the function of the organization in the microenvironment – There are 3 key ways the organization itself impacts the marketing activities 1. Capabilities – What does the organization do well? 2. Shortcomings – What does it do poorly or need to improve upon? 3. Organizational stakeholders – People within the organization who have a direct involvement, impact, or effect on the activities of the marketing function Copyright © 2021 Pearson Canada, Inc. 3-4 The Microenvironment (3 of 6) Figure 3.2 Key Organizational Roles in the Microenvironment Role Organization Responsibility Impact on Marketing President/CEO Leads all corporate activities Responsible to shareholders/owners Ensures that marketing activities represent the company in a positive light Hires/trains senior marketing executives Responsible for ensuring that corporate image and standards are maintained Legal Department Ensures adherence to all legal guidelines Assesses legal risk of all corporate activities Protects company from any legal exposure due to marketing efforts Negotiates all contracts with vendors, suppliers, endorsers, sponsors, etc. Provides legal opinions on marketing activities Sales Responsible for relationship between organization and retail customers Introduces new products to retailers Manages any retail-level marketing efforts Finance/ Accounting Responsible for ensuring the financial health of the organization Ensures that all marketing activities contribute to the financial goals of the organization Reviews and monitors marketing budget spending Manufacturing Production of organization’s product Managing production timelines, inventories, and supply chain Ensures product is produced to specifications Ensures sufficient inventory of product Manages timelines Copyright © 2021 Pearson Canada, Inc. 3-5 The Microenvironment (4 of 6) • Define the function of competition in the microenvironment – It is strange to think of “competition” as being part of our microenvironment, yet, the actions of competitors can drive or impact our activities – Did the taxi industry “create” its own competition? Copyright © 2021 Pearson Canada, Inc. 3-6 The Microenvironment (5 of 6) • Define the function of third parties in the microenvironment – Although not technically part of the organization, third parties are part of our microenvironment because we: 1. We control their activities 2. Have the option of making this an integrated role – Some more common 3rd parties and their impact on the marketing environment are explored in Figure 3.3 Copyright © 2021 Pearson Canada, Inc. 3-7 The Microenvironment (6 of 6) Figure 3.3 Third Parties and Their Impact on the Microenvironment Role Relationship to Organization Impact on Marketing Suppliers Provide and often maintain equipment Supply of ingredients Cost of inputs can impact ultimate price that consumer pays Availability of exclusive, rare, or unique ingredients can be key to product competitiveness Vendors Distribute the product to consumers Availability of willing vendors can impact product availability Costs associated with vendors can have impact on final consumer price Professional Services Many organizations lack the size, capability, or need to have internal organizational functions such as accounting, bookkeeping, legal. Others consciously prefer to “farm out” key aspects of the marketing function (e.g., agencies, packaging). Impact is similar to that of similar roles that could be part of the organization e.g., external legal team would still be responsible for ensuring adherence to all regulations and assessing risk The impact is felt in that the organization is required to rely on the expertise of individuals beyond their direct control. Copyright © 2021 Pearson Canada, Inc. 3-8 The Macroenvironment (1 of 11) • Describe the characteristics of the macroenvironment – All of the uncontrollable factors outside of the organization 1. Largely outside of the organization’s control 2. Often impacting entire industries 3. Generally long-term impacts 4. Predictable and anticipated or sudden and shocking Copyright © 2021 Pearson Canada, Inc. 3-9 The Macroenvironment (2 of 11) Figure 3.4 Macroeconomic Factors Copyright © 2021 Pearson Canada, Inc. 3 - 10 The Macroenvironment (3 of 11) • Explain consumer dynamic factors in the macroenvironment – The collection of statistics, trends, and attitudes that help us to identify, segment, and target specific groups of consumers and that tend to change over time and affect large groups of the consumer population in similar ways – Issues with measurability and responsiveness Copyright © 2021 Pearson Canada, Inc. 3 - 11 The Macroenvironment (4 of 11) Figure 3.5 Consumer Dynamics and Their Impact on Marketing Dynamic Definition and Examples Impact on Marketing Demographics • Statistics and facts about a particular population group • Examples: age, income, level of education, family composition • Demographic shifts impact everything from the types of products consumers seek (or will seek in the future) to whom their marketing efforts are targeted. Social and Behavioural Trends • These characteristics define who we are as a society and how consumers interact with one another. • Examples: Popularity of online commerce; “sharing” of personal information via social media • While harder to measure, these trends have much of the same impact on marketing as demographics, but also impact media choices (how to reach consumers), choice of key influencers (popular celebrities), as well as present opportunities for new products and services. Attitudes • Attitudes can be defined as “learned predispositions”—opinions and perspectives that take time to form and are slow to adjust. • Examples: Changing perspectives on males being primary stay-at-home caregivers; popular opinion on cannabis legalization • Like social and behavioural trends, attitudes can be hard to track and predict, but can have a powerful influence on consumer choices. • A great weathervane of attitudes, which impacts and is impacted by marketing efforts, is voters’ choices. How do the importance of key issues, and voters’ preferences, change over time? Copyright © 2021 Pearson Canada, Inc. 3 - 12 The Macroenvironment (5 of 11) • Explain global events in the macroenvironment – Worldwide events that impact the macroenvironment over which the organization has no control and often finds it difficult to prepare for – E.g., weather, natural disasters, international conflict Copyright © 2021 Pearson Canada, Inc. 3 - 13 The Macroenvironment (6 of 11) • Explain human advancement factors in the macroenvironment – Advances in technology, science, engineering, and medicine that impact the products we buy, how we live, and sometimes replace and change both Copyright © 2021 Pearson Canada, Inc. 3 - 14 The Macroenvironment (7 of 11) Figure 3.6 Areas of Human Advancement Area of Advancement Technology Examples • Digital photography Science • Medicine • Engineering • Improvements in fertilizers, plant supplements Improved disease detection 3D printing Impact • Virtual elimination of film • Ability to produce, reproduce, modify, edit, and share images more easily • Ability to produce food in previously arid areas • Higher yields per acre • Consumers living longer, healthier lives • Lower mortality rates • Customizability • Ability to produce more products any time, any place Copyright © 2021 Pearson Canada, Inc. 3 - 15 The Macroenvironment (8 of 11) • Explain governmental control factors in the macroenvironment – All aspects of the macroenvironment that are impacted by political authority, including laws, regulations, bureaucracy, enforcement, and regime change. Copyright © 2021 Pearson Canada, Inc. 3 - 16 The Macroenvironment (9 of 11) Figure 3.7 Examples of Areas of Governmental Control Area How Does Government Impact? Example Product Safety • • • • Standards and controls Licensing Regulations • • The process for getting new prescription medications approved is long and rigorous to protect consumers from products that might do more harm than good. Distribution • Certain products, while legal, have restrictions on where they can be distributed • In most Canadian provinces, the provincial government controls how alcohol is sold. Promotion • • Restrictions on advertising claims Regulations regarding advertising targeted to children • Products that claim to be a “source/good source/excellent source” of a particular vitamin or nutrient have strict governmental guidelines on the use of those terms. Pricing Pricing is overseen by government control in several ways: • Price Fixing: Government laws preclude competitors from colluding to establish pricing for an industry. • Price Controls: Governments set certain price limits and price increase limits in certain industries. • Price Discrimination: Governments ensure that different prices are offered to different customers. • Many provinces set minimum “floor prices” for beer to discourage overconsumption.18 When Bell Canada had a monopoly on phone service in Canada (prior to the 1980s), any price increase needed to be approved by the government • Copyright © 2021 Pearson Canada, Inc. 3 - 17 The Macroenvironment (10 of 11) Area How Does Government Impact? Example Industry Regulation Certain industries require operators to have special licences, training, and/or government sanction to operate. • In order to sell real estate or financial investment services, most provinces require individuals to be trained and licensed. Privacy Limitations and restrictions on access to and use of personal information • Organizations that wish to email offers or marketing information to consumers require them to “opt in.” Labelling Government regulations cover many aspects of product labelling including: • Safety warnings • Allergen notifications • Usage instructions • Food ingredients In addition, in Canada, there are legal requirements regarding use of French and English in labelling • The Canadian Consumer Packaging and Labelling Act prescribes what ingredients must be declared as allergens on food labels, as well as standardizes nutritional formats, product claims, and even minimum font sizes in some cases.19 Consumer Protection Various government agencies and ministries have responsibility for investigation, enforcement, and penalization of violators • In Canada, certain areas relating to advertising claims fall under the Criminal Code, meaning that violators can be prosecuted and fined or jailed. Intellectual Property A variety of laws, rules. and guidelines cover: • Patents: The right to own a particular idea or method • Trademarks: Symbols or images that identify a product or company • Copyright: Protection of ownership of a written or visual work • One of the most common illegally reproduced products in Canada is knock-off versions of the Canada Goose line of winterwear. Knock-offs are inexpensively made replicas that imitate the style, logo, and even brand name, without permission of or payment to, Canada Goose.20 Copyright © 2021 Pearson Canada, Inc. 3 - 18 The Macroenvironment Explain Economic Force Factors in the Macroenvironment – All aspects of the macroenvironment that are impacted by globalism, Free Trade agreements, currency issues, the state of production, employment trends and overall national and international wealth. Copyright © 2021 Pearson Canada, Inc. 3 - 19 Summary • The concept of the microenvironment has been introduced • Key elements of the microenvironment: the organization, the competition, and third parties have been explained • The concept of the macroenvironment has been introduced • The key elements have been explained: – Consumer dynamics – Global events – Human advancement – Governmental controls – Economic forces Copyright © 2021 Pearson Canada, Inc. 3 - 20 Mini Case: Did the taxi industry create its biggest competition? 1. What is your personal experience with taxis and ride share programs? Are the claims in the case presented valid? 2. What could the taxi industry have done? Are we just looking backwards at something that was not obvious at the time? 3. If you were to go back to Chapter 2 and do a S W OT analysis on this case, could we have anticipated the rise of rideshares? Is there anything left for the taxi industry? Copyright © 2021 Pearson Canada, Inc. 3 - 21 Mini Case: Global disruptive events 1. The 2020 C OVID -19 pandemic impacted every country in the world – whether they had large or small outbreaks, whether or not they took intervening action. What are some of the ways the outbreak impacted the marketing world temporarily? 2. Were there any changes that you see as being permanent? Can we look back to other global crises to find examples of how the world changed forever? Copyright © 2021 Pearson Canada, Inc. 3 - 22 Mini Case: Global luxury goods market 1. The apparent stability and strength of the luxury goods market calls into question whether or not these are truly macroeconomic forces, if some aspects (large areas) of the marketing world can be unaffected. Discuss. Copyright © 2021 Pearson Canada, Inc. 3 - 23