Marketing The Core PDF

CHAPTER 02 THE MARKETING ENVIRONME NT Prepared by: Maria Vincenten, Red © 2021 McGraw-Hill Education Limi...

CHAPTER 02 THE MARKETING ENVIRONME NT Prepared by: Maria Vincenten, Red © 2021 McGraw-Hill Education Limit ed River College  Learning Objectives 1. Explain the importance of an environmental scan and how it is used to improve marketing programs 2. Describe the elements of an environmental scan and summarize the trends affecting each area 3. Outline the current demographic and socio-cultural influences that affect marketing approaches © 2021 McGraw-Hill Education Lim 2  Learning Objectives (continued) 4. Explain how changes in the economic environment influence consumer purchase behaviour 5. Discuss the technological developments shaping current marketing practices 6. Describe the different forms of competition and the regulatory forces that shape the marketing industry 7. List the steps in an environment scan © 2021 McGraw-Hill Education Lim 3  Canada Post Capitalizes on E-commerce Trend Focus on parcels and direct marketing due to: – Canadians mailing 2.4B fewer pieces of mail – Parcel delivery competition – Volatile spending levels – Growth of Internet Transformation focus: – Parcel delivery – Direct marketing © 2021 McGraw-Hill Education Lim 4  The Marketing Environment Six Environmen Demogr a-phic tal forces Regulat Socio- ory cultural Marketing Environm ent Competit Economi ive c Technol o-gical © 2021 McGraw-Hill Education Lim 5  The Marketing Environment (continued) “Successful marketing programs must reach out and address changes and new opportunities in the marketplace.” © 2021 McGraw-Hill Education Lim 6  Situation (SWOT) Analysis The essence involves taking stock of organization’s marketing plans and the external forces and trends affecting it. – Strengths – Weaknesses – Opportunities – Threats Translate the results from a SWOT into specific marketing actions  identify critical factor © 2021 McGraw-Hill Education Lim 7  An Environmental Scan An environmental scan is the process of continually acquiring information on events occurring outside an organization to identify external trends, that are opportunities or threats to a business. Often the first step of developing a more extensive SWOT Let’s look at the six environmental forces more closely © 2021 McGraw-Hill Education Lim 8  Demographic Forces Understanding ensures: – marketing efforts are well placed, and – opportunities are not overlooked Statistics Canada 2016 Census – Aging population, diverse generations, settling in large cities, and ethnically mixed © 2021 McGraw-Hill Education Lim 9  Demographic Forces – An Aging Population Figure 2–1 Population aged 0 to 14 years and 65 years and older, 1998 to 2018 (estimates) and 2019 to 2038 (projections), Canada Significant growth of the population over the age of 65 © 2021 McGraw-Hill Education Lim 10  Demographic Forces – An Aging Population (continued) Government agencies and marketers are taking note of these demographic changes and determining the needs of the aging market. – Health care industry Areas of specialization Home support services Personal care items © 2021 McGraw-Hill Education Lim 11  Demographic Forces – Diverse Generations 1) Baby boomers 2) Generation X 3) Generation Y (Millennials ) © 2021 McGraw-Hill Education Lim 12  Demographic Forces – Big-City Growth From 2016 Census data – Fastest growing G7 country at 1.4% July 2019 – Each province and territory grew Nunavut and Ontario leading the way except Newfoundland and Labrador and NWT – Boosted by immigration – Western Canada more rapidly © 2021 McGraw-Hill Education Lim 13  Demographic Forces – Ethnic Diversity Between 2018 and 2019, 83% of Canada’s growth was due to the arrival of immigrants and non-permanent residents Multicultural mix creates an interesting array of opportunities for marketers – marketing NewsFlash – Chinese Consumers in Canada “Canada prides itself on being a multicultural country.” © 2021 McGraw-Hill Education Lim 14  Demographic Forces – World Markets Over 7.7 Five Largest billion people Countries (population in – Canada millions, as of ranks 2019) number 39 China 1,431.3 Opportunities India 1,360.1 United 328.1 for expansion States to foreign Indonesia 269.3 markets © 2021 McGraw-Hill Education Lim Brazil 214.6 15 Source: World Population Review, “Country  Demographic Forces – Changing Household Composition Dominant household structure is now one-person household – Driven by aging population, economic independence, and increase in separation/divorce rates Increase in: – Couples without children – Common-law relationships – Same-sex couples – Multi-generational families © 2021 McGraw-Hill Education Lim 16  Socio-cultural Forces Not easy to identify Tend to be gradual and sometimes subtle Refer to cultural values, ideas, and attitudes – society’s morals and beliefs Marketers monitor changes to capitalize on new opportunities –Canadians are fair and inclusive, and value good quality of life (education, health care, clean air and water, work-life balance and availability of social programs) © 2021 McGraw-Hill Education Lim 17  Socio-Cultural Forces - Media Device connectivity – Widespread use of Internet on multiple devices – showrooming Social media – No longer just for friends TV and video watching – Over 27 hours per week © 2021 McGraw-Hill Education Lim 18  Socio-Cultural Forces - Media (continued) © 2021 McGraw-Hill Education Lim 19  Socio-Cultural Forces - Food Consumption Increasingly concerned about what they eat – Rise in chronic diseases – Clarity of definitions – Switching from processed – Focus on freshness Buying local Ethnic more © 2021 McGraw-Hill Education Lim 20  Socio-Cultural Forces - Attitude and Roles of Men and Women One of the most notable has been in the attitudes and roles of men and women in the marketplace Some companies are moving away from traditional gender norms to avoid gender stereotypes © 2021 McGraw-Hill Education Lim 21  Socio-Cultural Forces - Healthy Living “There is an ever-increasing consumer interest in maintaining and improving health.” © 2021 McGraw-Hill Education Lim 22  Socio-Cultural Forces - Ethical Consumption Canadians most likely to recycle, buy used or preowned goods, and use their own bags when shopping – Retailers adopted “green” aisles Willing to make decisions and support companies that adopt responsible and ethical practices © 2021 McGraw-Hill Education Lim 23  Economic Forces Marketers need to recognize how the economy affects the purchase behaviour of their target markets – Upswing increased spending – Downswing causes delays and cancellations Canadians are cautious with their spending, focusing on paying down debt © 2021 McGraw-Hill Education Lim 24  Economic Forces - Macroeconomic Forces State of a country’s economy as a whole Key economic indicators: – Growth rate (GDP) – Inflation rate Recession – Unemployment rate Marketers may adjust programs to maximize business results © 2021 McGraw-Hill Education Lim 25  Economic Forces - Microeconomic Forces Directly refers to the supply and demand of goods and services and how this is impacted by individual, household, and company decisions to purchase © 2021 McGraw-Hill Education Lim 26  Technological Forces Some dramatic technological changes include: – Artificial intelligence – Automation – Internet of Things (IoT) – Wearables Seamlessly move from one device to another Consumers want consistent interactions with brands Marketers need to understand online consumer behaviour © 2021 McGraw-Hill Education Lim 27 Technological Forces (continued) Each new wave of technology can replace existing products, and companies need to be aware of technological changes to ensure that products do not become obsolete “Marketers need to know how consumers are integrating technology into their lives.” © 2021 McGraw-Hill Education Lim 28  Canadians’ Use of Technology Internet access E-commerce Cloud-based services Privacy Music Online video Computers Smartphones Mobile payments © 2021 McGraw-Hill Education Lim 29  Competitive Forces Marketers must monitor the competitive activity of products that compete head-to-head with its brands – Also the competitive nature of the industry Competiti Direct on Indire ct © 2021 McGraw-Hill Education Lim 30  Types of Competition Marketers need to have a clear understanding of the competitive nature of the industry in which they function © 2021 McGraw-Hill Education Lim 31  Regulatory Forces Regulations are put in place to: – Protect consumers from unscrupulous business practices, – Set acceptable standards of practice, and – Encourage fair competition Ethical business practices should be followed to avoid consumer backlash and negative publicity Review regulatory bodies and associations specific to their industry and jurisdiction © 2021 McGraw-Hill Education Lim 32  Regulatory Forces - Competition The Competition Bureau - independent law-enforcement agency tasked to ensure that the market in Canada is competitive and innovative Canadian Anti-Fraud Centre (CAFC) – reduce marketing fraud © 2021 McGraw-Hill Education Lim 33  Regulatory Forces - Advertising Advertising Standards Canada (ASC) - self-regulatory non-government association run by advertising, media, and marketing professionals with the purpose of setting and regulating standards of professional practice in the advertising industry. © 2021 McGraw-Hill Education Lim 34  Regulatory Forces - Do Not Call List Canadian Radio-television and Telecommunications Commission (CRTC) – Do Not Call List (DNCL) – Gives consumers the ability to elect to not receive telemarketing calls by registering their phone numbers. keeps these numbers in the DNCL for five years, after which consumers must re-register. Telemarketers are required by law to subscribe to the DNCL and to not call the numbers in its database. © 2021 McGraw-Hill Education Lim 35  Regulatory Forces - Marketing & Mobile Canadian Marketing Association (CMA) – Code of Ethics and Standards of Practice Canadian Wireless Telecommunications Association (CWTA) – Provides resources on communication devices Mobile Marketing Association (MMA) – Global standards and guidelines © 2021 McGraw-Hill Education Lim 36  Regulatory Forces - Privacy Personal Information Protection and Electronic Documents Act (PIPEDA) refers to the private-sector collection of personal data. Privacy Act - government agencies limits federal government departments and agencies from collecting personal information unless it relates directly to the task at hand and discloses the purpose of this collection © 2021 McGraw-Hill Education Lim 37  Regulatory Forces - SPAM Canada’s anti-spam legislation (CASL) - protect consumers and businesses from unwanted commercial electronic – including messages to e-messages (CEMs) mail addresses, social networking accounts, and text messages sent to a cellphone. – Spam refers to the dissemination of unsolicited electronic messages to recipients © 2021 McGraw-Hill Education Lim 38  Regulatory Forces - Online behavioural advertising Online behavioural advertising (OBA) - use of web-based programs that track consumers’ online browsing activities in order to serve online ads that correspond to their browsing interests – The Digital Advertising Alliance of Canada (DAAC) was formed to ensure that consumers were aware of OBA and could opt out of the collection and use of OBA data on their © 2021 McGraw-Hill devices Education Lim 39  Steps in an Environmental Scan Brainstorm, Determine evaluate, Collect the the impact and facts and that this implement identify fact/trend ideas to trends will have on meet the business business objectives Gather data Set business Brainstorm and objectives Evaluate and information Analyze the implement Conduct external trends alternatives competitive to determine reviews their impact Cluster information into facts and © 2021 McGraw-Hill Education Lim 40  Summary…just the facts (part 1) 1. An environmental scan is the process of continually acquiring information on events occurring outside an organization to identify external trends that are opportunities or threats to a business. 2. Elements in an environmental scan include demographic factors, socio- cultural factors, economic factors, technological factors, competitive factors, and regulatory factors. © 2021 McGraw-Hill Education Lim 41  Summary…just the facts (part 2) 3. Demographics is the statistical data about a population according to characteristics such as gender, age, ethnicity, income, education, and occupation. Socio-cultural forces look at cultural values, ideas, and attitudes, as well as society’s morals and beliefs. 4. Economic forces consider macro and micro environmental factors. These forces reflect the state of the overall economy as well as the ability of consumers to spend. 5. Technological forces relate to scientific inventions and innovations that may impact the running of a business and influence consumer behaviour and interactions. © 2021 McGraw-Hill Education Lim 42  Summary…just the facts (part 3) 6. Competitive forces refer to direct and indirect competitors as well as the competitive nature of the market in which they function. Regulatory forces are the restrictions placed on businesses, products, or services by the government or industry associations. 7. Steps in a marketing environment scan involve (1) collecting the facts and identifying trends, (2) determining the impact that these facts/trends will have on the business, and (3) brainstorming, © 2021 McGraw-Hill Education Lim 43