The Marketing Environment andMarketing Strategy :

The Marketing Environment andMarketing Strategy Environmental scanning Environmental

forces Social Economic Technological Competitive Regulatory Strategic Planning Purposes
Objectives and challenges Business-Unit Strategies--core competencies Issues in creating a
strategy Choosing your battles carefully

The Marketing Environment :

The Marketing Environment The importance of the environment Some forces and their
implications e.g., truth in lending laws; antitrust laws, economic cycles; changing
demographics

Environmental Scanning and Analysis :

Environmental Scanning and Analysis SCANNING ANALYSIS ACTION

Elements of The Environment :

Elements of The Environment Social Economic Technological Competitive Regulatory

Social Forces :

Social Forces Demographics—more Older citizens Unmarried singles Immigrants Ethnic

diversity Family changes “Blended” families Non-traditional households Cultural changes
Roles of women Values E.g., fitness Longer work hours for some; yet also more people
working part time Changing cultural standards (e.g., were Beatle members’ haircuts that
offensive?)

Economic Forces :

Economic Forces Consumer Income Nominal vs. inflation adjusted Impact of inflation
Disposable vs. pre-tax income Discretionary income Regional influences Economic cycles
“Teach a parrot to say ‘supply” and ‘demand” and you have a learned economist!” Paul
Samuelson.

Economic Cycles :

Economic Cycles

Technological Forces :
Technological Forces Changes in technology may make business obsolete; e.g., buggy whips
(automobile) airport at Gander, Newfoundland (longer range aircraft) Federal Express (fax
machine; Internet) New opportunities—e.g., specialty online retailers, mass customization

Competition :

Competition Levels Discretionary income Product competition Brand competition Market

structures Monopoly (e.g., electric power) Oligopoly (e.g., cars, OPEC) Monopolistic
competition (e.g., supermarkets) Pure competition (commodities; e.g., Competition benefits
the consumer is increasingly global

Issues in Competition :

Issues in Competition Barriers to entry Financial Technological Intellectual property Brand

recognition Running businesses Distribution channels Other asset (e.g., landing rights) Power
of Buyers Substitutes available Direct Indirect Suppliers Existing competitors and substitutes
Potential competition—DO NOT underestimate!

Political Forces :

Political Forces Lobbying by business groups (e.g., honey lobby) consumer/political groups
(e.g., labor unions; senior lobby) foreign interests

Legal and Regulatory Environment :

Legal and Regulatory Environment Laws and Regulations for safety for consumer protection
to protect special interests Dangers of litigation--anyone can sue, and juries often buy it!
Examples: Antitrust Fair competition Pricing “Truth in Lending”--have to tell people real
costs of financing; car leases now regulated

Antitrust Law :

Antitrust Law Provisions Must compete fairly; no collusion predation Must not abuse market
power; no “excessive” market share “tying”--requiring people to buy a less desired item to
get a desired one; e.g., must buy service to get Xerox copier Ford only drilled a slot if you
bought a radio No, now that you mention it, I don’t trust you!

Strategy :

Strategy Plan to achieve desired objectives (e.g., profit, market share) based on available
resources (e.g., financial, patents, trademarks, people, brand name/image , distribution
channels) subject to choices made (e.g., willingness to take risk, short run vs. long run goals)
Strategy, Marketing, and the Organization :

Strategy, Marketing, and the Organization DESIRED OUTCOMES STRATEGY

RESEARCH, ANALYSIS AND PLANNING IMPLEMENTATION EVALUATION
RESULTS

Dimensions of Strategy :

Dimensions of Strategy Ultimate organizational objective Profit Non-profit Level Corporate

Business Unit Functional

Some Issues in Strategy :

Some Issues in Strategy The Business What is it? Should not define too narrowly or too
broadly The Mission Scope Customers Markets Technology Values Values and culture Goals
and objectives Profit Revenue Market share Unit sales Employee welfare Social
responsibility Technological leadership Other

Considerations in Strategies :

Considerations in Strategies Customers Competencies Competitors

Selecting Target Consumers :

Demand measurement/forecasting Market segmentation Target marketing Market positioning

Selecting Target Consumers

The Boston Consulting Group (BCG) Matrix :

The Boston Consulting Group (BCG) Matrix © 2003 McGraw-Hill Companies, Inc.,
McGraw-Hill/Irwin

Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis :

Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis STRATEGY

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

SWOT--Microsoft :

SWOT--Microsoft Strengths Technology Market share Barriers to entry Brand name Cash
Weaknesses Non-Windows division (e.g., MSN, games) Opportunities Hardware e.g., home
networks Services Threats Recession Legal Regulatory
Microsoft: Implications :

Microsoft: Implications Decision on whether to stay in ISP business Game business If the
decision is to stay: Should more resources be invested? Possible focus or differentiation?
Dealing with decline in demand due to recession Price cuts? “Hold out?” Political relations to
limit future legal problems