chapter 4: evaluating opportunities in the changing marketing environment

Chapter 4: Evaluating Opportunities in theChanging MarketingEnvironment

When you finish this chapter, you should

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1. Know the variables that shape the environment of marketing strategy planning.

2. Understand why company objectives are important in guiding marketing strategy planning.

3. See how the resources of a firm affect the search for opportunities.

4. Know how the different kinds of competitive situations affect strategy planning.

5. Understand how the economic and technological environment can affect strategy planning.

6. Know why you might be sent to prison if you ignore the political and legal environment.

7. Understand how to screen and evaluate marketing strategy opportunities.

8. Understand the important new terms.

SettingCompanyObjectives

ProvideGuidelines

CoordinateEffort

Lead to Marketing Objectives

BeExplicit

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Exhibit 4-1

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R&DObjectives

HRObjectives

MarketingObjectives

FinanceObjectives

ProductionObjectives

CompanyObjectives

SalesPromotionObjectives

Mass SellingObjectives

PersonalSelling

Objectives

PriceObjectives

PromotionObjectives

PlaceObjectives

ProductObjectives

Marketing StrengthsMarketing Strengths

Producing Capability and Flexibility

Producing Capability and Flexibility

Financial StrengthFinancial Strength??????????????????????????????????????????????????

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Information on Competitors

Competitive Barriers

Competitive Rivals

Competitor Analysis

Kinds of Markets

KeyConcepts

in theCompetitiveEnvironment

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Interest RatesInterest Rates

Global EconomyGlobal Economy Rapid ChangeRapid Change

KeyEconomic

Forces

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Technology is the application of science to convert and economy’s resources to output

Technology impacts marketing both through opportunities for new products and new ways (processes) for handling marketing functions Example: consider the Internet Products: software for computer users Process: selling from a web site

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RegionalGroupings

RegionalGroupings

NationalismNationalism ConsumerismConsumerism

Characteristicsof the PoliticalEnvironment

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Agencies Responsibilities

Federal Trade Commission (FTC) Enforces laws and develops guidelines regarding unfair business practices

Food and Drug Administration (FDA) Enforces laws and develops regulations to prevent distribution and sale of hazardous consumer products

Consumer Product Safety Commission Enforces Consumer Product Safety Act(CPSC)

Federal Communications Commission Regulates interstate wire, radio, and (FCC) television

Environmental Protection Agency (EPA) Develops and enforces environmental protection standards

Office of Consumer Affairs (OCA) Handles consumer complaintsExhibit 4-4

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Cultural Trend: The Changing Roles of Women

Cultural Trend: The Changing Roles of Women

TimePoverty

Economic Power

CareerOpportunity

Exhibit 4-6

Do

llars Total cost

Years

Sales

0 1 2 3 4 5

Product A

In this graphic, a too-narrow focus on the first year’s results might cause the marketing manager to abandon this product as too costly.

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Total cost

Years

Sales

0 1 2 3 4 5

Product B

In this graphic, a too-narrow focus on the first year’s results might cause the marketing manager to adopt the product prematurely, since its performance in year one is misleading.

Exhibit 4-64-13

Exhibit 4-64-14

Do

llars Total cost

Years

Sales

0 1 2 3 4 5

Product A

Total cost

Years

Sales

0 1 2 3 4 5

Product B

Seen together, it is easy to see that Product A offers a vastly better overall return than does Product B

Exhibit 4-74-15

Bu

sin

ess

Str

eng

th

Industry AttractivenessH

igh

Med

ium

Lo

w

High Medium Low

No Growth

Borderline

Growth

Insensitive Sensitive

Basiccommodity-typeconsumerproducts

Industrialproducts

Consumerproducts thatare linked to

culturalvariables

Exhibit 4-84-16

TechnologyNationalismNAFTAConsumerismCultural and Social EnvironmentStrategic Business Unit (SBU)Portfolio Management

Mission StatementCompetitive EnvironmentCompetitor AnalysisCompetitive RivalsCompetitive BarriersEconomic and Technological Environment

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