Slide 3-1

1. Explain how environmental scanning provides

information about social, economic,
Course technological, competitive, and regulatory forces.
Learning 2. Describe how social forces such as
demographics and culture can have an impact
Outcomes on marketing strategy.
3. Discuss how economic forces such as
macroeconomic conditions and consumer
income affect marketing.
4. Describe how technological changes can affect
marketing.
5. Discuss the forms of competition that exist in a
market and the key components of competition.
6. Explain the major legislation that ensures
competition and regulates the elements of the
marketing mix.

Slide 3-2
Is “Connecting the World” an Ambitious Vision?
Not If You Are Facebook!

Slide 3-3
4

Environmental
Scanning!
The process of continually acquiring information on
events occurring outside the organization to identify and
interpret potential trends is called environmental
scanning.

The monitoring, evaluation, and dissemination

of information relevant to the
organizational development of strategy

Slide 3-4
LO 3-1 ENVIRONMENTAL SCANNING
TRACKING ENVIRONMENTAL TRENDS

o What types of
businesses are likely
to be influenced by
these trends?

o What future would

you predict for
coffee?

Slide 3-5
FIGURE 3-1 Environmental
forces affect the organization, its
suppliers, and its customers
Slide 3-6
LO 3-2
SOCIAL FORCES
The social forces of the environment include the
demographic characteristics of the
population and its culture

 Demographics
• World Population
▪ Population Explosion
▪ Developing countries
▪ Age structure shifting
▪ Relative size of countries
▪e.g., India & China

Slide 3-7
LO 3-2
SOCIAL FORCES
DEMOGRAPHICS—GENERATIONAL COHORTS

Baby Boomers: Generation Y:

1946 – 1964 1977 – 1994
76M 72M

Generation X: Millennials:
1965 – 1976 1995 +
50M

Slide 3-8
LO 3-2
SOCIAL FORCES
DEMOGRAPHICS

Generational Marketing
Population shifts
Racial and Ethnic diversity

Slide 3-9
 SOCIAL FORCES
LO 3-2 DEMOGRAPHICS—THE HOUSEHOLD
01 01–
MULTICULTURAL 01
MARKETING
PROGRAMME
02 – BLENDED
FAMILY
02 Lorem ipsum dolor sit amet, nibh est. A
magna maecenas, quam magna nec

03 – MARITAL quis, lorem nunc. Suspendisse viverra

sodales mauris, cras pharetra proin
egestas arcu erat dolor, at amet.
STATUS 03

04 – GRAY
04 DIVORCE

Slide 3-10
 SOCIAL FORCES
LO 3-2
DEMOGRAPHICS—POPULATION SHIFTS:
Urban and rural population of China from 2008 to 2018

Slide 3-11
LO 3-2
SOCIAL FORCES
DEMOGRAPHICS—POPULATION SHIFTS:
RACIAL AND ETHNIC DIVERSITY

 Composition

 Trends
• African Americans
• Hispanics
• Asian Americans

Slide 3-12
LO 3-2
SOCIAL FORCES
DEMOGRAPHICS—POPULATION SHIFTS:
RACIAL AND ETHNIC DIVERSITY

“The more development that took place in the UAE, that led to an
increase in the population because of the demand on labour to work
in different sectors that are developing.” By 1970, the UAE's
population was up to 226,000 and just five years later had more than
doubled to 560,000

Slide 3-13
 SOCIAL FORCES
DEMOGRAPHICS—POPULATION SHIFTS:
RACIAL AND ETHNIC DIVERSITY

https://www.globalmediainsight.com/blog/uae-population-statistics/ Slide 3-14

LO 3-2
Multi-cultural marketing can go wrong?
Why use ethnic and regional marketing promotions?

Combinations of the marketing mix that reflect the unique

attitudes, ancestry, communication preferences, and lifestyles of
different races.

Slide 3-15
LO 3-2 SOCIAL FORCES
CULTURE

 CHANGING ATTITUDES & ROLES OF MEN AND WOMEN

• Young women had career

mothers who provided a
reference point for lifestyle
choices.
• Increased participation in
organized sports eliminated
one of the most visible
inequalities in opportunities
for women.
• The Internet has provided
exposure to the marketplace
through a mechanism that
makes gender, race, and
ethnicity invisible.
Slide 3-16
 SOCIAL FORCES
CHANGING VALUE

PERSONAL
ACHIEVEMENT CONTROL

CONTINOUS
CHANGE
WORK,
EFFICIENCY
EQUALITY

FUTURE
MATERIAL
ORIENTATION
COMFORT

INDIVIDUALISM

SELF-HELP

Slide 3-17
LO 3-2 SOCIAL FORCES

UAE ARAB NATION OTHERS?

Slide 3-18
LO 3-2 SOCIAL FORCES
CULTURE
 CHANGING VALUE

Value
Consciousness

The concern for obtaining the best

quality, features, and performance
of a product or service for a given
price—is driving consumption
behavior for many products at all
price levels.

Slide 3-19
LO 3-3 ECONOMIC FORCES
MACROECONOMIC CONDITIONS

Economy pertains to the income, expenditures, and resources that affect the
cost of running a business and household.

Macroeconomic Conditions • Inflation

The performance of the
economy based on indicators
such as GDP (gross domestic
product), unemployment, and
price changes (inflation or • Recession
deflation).

Slide 3-20
LO 3-3 ECONOMIC FORCES
CONSUMER INCOME

 Gross Income

 Disposable Income

 Discretionary Income

Slide 3-21
LO 3-4 TECHNOLOGICAL FORCES
TECHNOLOGY OF TOMORROW

• Connectivity
• Intelligent Data Collection
• Green Infrastructure
• 3D Technologies

• Others that Replace or are Substitutes

Slide 3-22
LO 3-4 TECHNOLOGICAL FORCES
TECHNOLOGY OF TOMORROW

 Electronic Business Technologies

Slide 3-23
LO 3-4 TECHNOLOGICAL FORCES
TECHNOLOGY’S IMPACT ON CUSTOMER VALUE

 Plummeting Costs

 New Products

 Change Production of Existing Products

• Recycling • Precycling

Slide 3-24
LO 3-4 TECHNOLOGICAL FORCES
TECHNOLOGY ENABLES DATA ANALYTIC

Slide 3-25
LO 3-5 COMPETITIVE FORCES
ALTERNATIVE FORMS OF COMPETITION

• Pure Competition

• Monopolistic Competition

• Oligopoly

• Pure Monopoly
Slide 3-26
FIGURE 3-A Continuum
of competition
Slide 3-27
LO 3-5 COMPETITIVE FORCES
COMPONENTS OF COMPETITION

 Entry
• Likelihood of new entrants
Capital requirements, ads

• Barriers to Entry
expenditure, product
identity, distribution access,
cost of switching

 Power of Buyers and Suppliers

BUYER: Powerful buyer exist when they are few, & low switching cost

SUPPLIER: Gains power when product is critical to buyer & it has build
up the switching cost

Slide 3-28
LO 3-5 COMPETITIVE FORCES
COMPONENTS OF COMPETITION

 Existing Competitors and Substitutes

Competitive pressures among existing firms depend on
the rate of industry growth and high fixed cost.

 Small Business as Competitors

Strong correlation between national economic
growth and the level of new small business activity.

Slide 3-29
FIGURE 3-B Components
of competition
Slide 3-30
 Five Forces driving Competition
New entrants to an
industry bring new
Ability to raise prices capacity, a desire to
or reduce the quality gain market share and
of purchased goods substantial resources
and services.

Buyers affect an
industry through
their ability to force
down prices, bargain
for higher quality or
more services, and
play competitors
against each other.

A product that appears

to be different but can
satisfy
Source: from Competitive Strategy: Techniques for Analyzing Industries and Competitors (by Michael E. Porter, 1998)
Simon & Schuster, Inc., Copyright © 1980, 1998 by The Free Press. All rights reserved.
thethe same
Reprinted with permission ofneed
Free Press, a division of

as another product

Slide 3-31
LO 3-6 REGULATORY FORCES
Product Related Legislation

Regulation
 Protecting Competition
 Product related Legislation
 Patent Law; Copyright Law; Labelling
Requirements for Dietary
supplements; Trademark Law
 Pricing related Legislation
 Distribution related Legislation
 Advertising & Promotion related Legislation
 Consumerism Slide 3-32
LO 3-6
Generic Trademarks?

Slide 3-33
LO 3-6 REGULATORY FORCES
PRICE-RELATED LEGISLATION

 Price Fixing

 Price Discounting

Slide 3-34
LO 3-6 REGULATORY FORCES
DISTRIBUTION-RELATED LEGISLATION

Requirement Tying
Contracts Arrangement

02 04

01 03

Exclusive Dealing Exclusive Territorial

Distributorship
Slide 3-35
Thank you

Slide 3-36