chapter foundations of chapter m a r k e t i n g the environment for marketing decisions 2

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The Environmentfor Marketing Decisions

2

Chapter

Objectives1. Identify the environmental factors that affect marketing decisions.

2. Identify three categories of competition faced by marketers, and outline the issues to consider in developing a competitive strategy.

3. Illustrate the association between marketing plans and the technological environment.

4. Demonstrate how the sociocultural environment influences marketing decisions.

5. Show how the economic environment has a bearing on marketing planning.

6. Explain the major legislative framework that regulates marketing activities.

2The Environment for Marketing Decisions

2-1

Chapter

Environmental Planning

• Process by which the marketing manager gathers and sorts information about the marketing environment.


2-2

Chapter 2The Environment for Marketing Decisions

2-3

Components of the Marketing Environment

Figure 2.1

The Marketing

Plan

Customers

Economic Conditions

Political-legalclimate

Socioculturalenvironment

Competition

Technology

Chapter

Competitive Environment

• The interactive process that occurs in the marketplace in which different organizations seek to satisfy similar markets.


2-4

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Types of Competition

• Inter-product or direct

• Product-substitute or indirect

• Alternative-gratification


2-5

Chapter

Technological Environment

• The applications of knowledge based on scientific discoveries, inventions, and innovations.


2-6

Chapter

Key Factors of the Technological Environment

• Computer technology

• Internet


2-7

Chapter

Sociocultural Environment

• The mosaic of societal and cultural components that are relevant to the organization’s business decisions.


2-8

Chapter

Key Factors of the Sociocultural Environment• General readiness of society to accept

a marketing idea

• Trust and confidence in business

• Mixed society

• Towns and rural communities

• Gender

• Consumerism


2-9

Chapter

Economic Environment

• Factors in a region or country that affect the production, distribution, and consumption of its wealth.

• Key elements are monetary resources, inflation, employment, and productive capacity.


2-10

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Stages of the Business Cycle

• Recession

• Depression

• Recovery

• Prosperity


2-11

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Inflation and Stagflation

Inflation• Rising price level resulting in reduced

purchasing power for the consumer.

Stagflation• High unemployment and a rising price

level at the same time.


2-12

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Fiscal and Monetary Policy

Fiscal Policy• Receipts and expenditures of

government.

Monetary Policy• Manipulation of the money supply and

market rates of interest.


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Demarketing

• The process of cutting consumer demand for a product, because the demand exceeds the level that can reasonably be supplied by the firm or because doing so will create a more favorable corporate image.


2-14

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Political - Legal Environment

• The laws and interpretation of laws that require firms to operate under competitive conditions and to protect consumer rights.


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Key Factors in Political - Legal Environment

• Free-enterprise society

• Competition Act


2-16

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The Competition Act prohibits:

• Combinations that lessen competition.

• Mergers or monopolies detrimental to the public.

• Deceptive trade practices.


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