global market environment

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C H A P T C H A P T E R E R © 2007 The McGraw-Hill Companies, Inc. All rights reserve McGraw-Hill/Irwin The Global Marketing Environment 2

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Page 1: Global Market Environment

C H A P T E RC H A P T E R

© 2007 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

The Global Marketing

Environment

The Global Marketing

Environment

2

Page 2: Global Market Environment

2-2 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives

After studying this chapter, you should be able to: Understand the nature of the marketing environment and

why it is important to marketers. Describe the major components of the social environment

and how trends in the social environment affect marketing.

Understand how the economic environment affects marketing.

See how the political/legal environment offers opportunities and threats to marketers.

Appreciate the importance of the technological environment to marketers.

Understand differences in the competitive environment. Know how changes in the institutional environment affect

marketers.

Page 3: Global Market Environment

2-3 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

DellDellDellDell

Michael Dell founded Dell Computer Corporation with $1,000 when he was a college student at the University of Texas at Austin in 1984. Today Dell is the world’s leading direct computer systems company with annual revenues in excess of $40 billion and over 34,000 employees.

Page 4: Global Market Environment

2-4 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

The Marketing EnvironmentThe Marketing EnvironmentThe Marketing EnvironmentThe Marketing Environment

The marketing environment consists of all factors external to an organization that can affect the organization’s marketing activities.

Exhibit 2-1

Page 5: Global Market Environment

2-5 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

Identifying Market Opportunities and ThreatsIdentifying Market Opportunities and Threats

Many firms use environmental scanning to identify important trends and determine whether they represent present or future market opportunities or threats.

Exhibit 2-2

Page 6: Global Market Environment

2-6 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

SocialSocialEnvironmentEnvironment

Number of Number of PeoplePeople

CharacteristicsCharacteristics

BehaviorBehavior

GrowthGrowthProjectionProjection

The Social EnvironmentThe Social EnvironmentThe Social EnvironmentThe Social Environment

The social environment includes all factors and trends related to groups of people, including their number, characteristics, behavior, and growth projections.

Page 7: Global Market Environment

2-7 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

The Demographic EnvironmentThe Demographic EnvironmentThe Demographic EnvironmentThe Demographic Environment

The demographic environment refers to the size, distribution, and growth rate of groups of people with different characteristics.

The demographic characteristics of interest to marketers relate in some way to purchasing behavior, because people from different countries, cultures, age groups, or household arrangements often exhibit different purchasing behaviors.

A global perspective requires that marketers be familiar with important demographic trends around the world as well as within the United States.

Page 8: Global Market Environment

2-8 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

Population Estimate —Year 2025Population Estimate —Year 2025

Exhibit 2-3

Page 9: Global Market Environment

2-9 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

Demographic TrendsDemographic TrendsDemographic TrendsDemographic Trends

World and country population statistics are important, but most marketers target subgroups. Trends in population subgroups are typically the most useful to marketers, for example, the growth of the urban population.

Page 10: Global Market Environment

2-10 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

Demographic TrendsDemographic TrendsDemographic TrendsDemographic Trends

Another interesting trend is the aging of the population. The aging of the population is especially evident in Italy, Japan, Britain, and the United States.

Page 11: Global Market Environment

2-11 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

CulturalCulturalFactorsFactors

ValuesValues

IdeasIdeas

AttitudesAttitudes

SubgroupSubgroupActivitiesActivities

BeliefsBeliefs

The Cultural EnvironmentThe Cultural EnvironmentThe Cultural EnvironmentThe Cultural Environment

The cultural environment refers to factors and trends related to how people live and behave.

Page 12: Global Market Environment

2-12 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

Cultural DiversityCultural DiversityCultural DiversityCultural Diversity

Cultural differences are important in both international and domestic markets.

Much of the population and buying power growth in the United States is and will be from multicultural groups.

Exhibit 2-6

Page 13: Global Market Environment

2-13 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

Changing RolesChanging RolesChanging RolesChanging Roles

As more women enter the workforce and household compositions change, typical household roles are altered.

Tremendous market opportunities exist for firms that can develop effective strategies for appealing to these changing roles.

Page 14: Global Market Environment

2-14 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

Emphasis on Health & FitnessEmphasis on Health & FitnessEmphasis on Health & FitnessEmphasis on Health & Fitness

The pursuit of a more healthful lifestyle includes: eating more nutritious foods exercising regularly participating in various sports activities focusing on wellness.

This translates into potential market opportunities for firms that provide products and services geared toward improving health and fitness.

Page 15: Global Market Environment

2-15 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

The Desire for ConvenienceThe Desire for ConvenienceThe Desire for ConvenienceThe Desire for Convenience

Increased desire for convenience created by: Changes in household composition Increases in the number of working womenGeneral shortage of time

Page 16: Global Market Environment

2-16 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

ConsumerismConsumerismConsumerismConsumerism

Consumerism is the movement to establish and protect the rights of buyers.

One increasingly important consumer issue is environmentalism.

Successful marketers can respond by developing environmentally safe products and communicating their environmental contributions.

Page 17: Global Market Environment

2-17 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

The Economic EnvironmentThe Economic EnvironmentThe Economic EnvironmentThe Economic Environment

The economic environment includes factors and trends related to income levels and the production of goods and services.

Economic trends in different parts of the world can affect marketing activities in other parts of the world.

The gross domestic product (GDP) represents the total size of a country’s economy measured in the amount of goods and services produced.

Page 18: Global Market Environment

2-18 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

The Political/Legal EnvironmentThe Political/Legal EnvironmentThe Political/Legal EnvironmentThe Political/Legal Environment

The political/legal environment encompasses factors and trends related to governmental activities and specific laws and regulations that affect marketing practice.

Political Political LegalLegal

EnvironmentEnvironment

GlobalGlobalTrendsTrends

LegislationLegislationRegulationRegulation

Page 19: Global Market Environment

2-19 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

Global Political TrendsGlobal Political TrendsGlobal Political TrendsGlobal Political Trends

In today’s world economy, international political events greatly affect marketing activities. For example the impact of the war on terrorism on the travel and security industries.

A second important political trend is movement toward free trade and away from protectionism. Studies show that countries with the freest trade have the highest GDP growth.

Page 20: Global Market Environment

2-20 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

LegislationLegislationLegislationLegislation

Page 21: Global Market Environment

2-21 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

Regulations and Regulatory AgenciesRegulations and Regulatory AgenciesRegulations and Regulatory AgenciesRegulations and Regulatory Agencies

Most legislation in the United States is enforced through regulations developed by a variety of agencies, and marketers must often work with regulatory authorities at the federal, state, and local levels.

Page 22: Global Market Environment

2-22 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

The Technological EnvironmentThe Technological EnvironmentThe Technological EnvironmentThe Technological Environment

The technological environment includes factors and trends related to innovations that affect the development of new products or the marketing process.

These technological trends can provide opportunities for new product development, affect how marketing activities are performed, or both.

Page 23: Global Market Environment

2-23 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

The Competitive EnvironmentThe Competitive EnvironmentThe Competitive EnvironmentThe Competitive Environment

The competitive environment consists of all the organizations that attempt to serve similar customers.

Product Product CompetitorsCompetitors

Offer different types of products to satisfy the same general need. Domino’s Pizza, McDonald’s, and Kentucky Fried Chicken are product competitors.

Brand Brand CompetitorsCompetitors

The most direct competition, offering the same types of products as competing firms. For example, Nike is a brand competitor of Reebok as both companies manufacture shoes.

Page 24: Global Market Environment

2-24 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

The Institutional EnvironmentThe Institutional EnvironmentThe Institutional EnvironmentThe Institutional Environment

The institutional environment consists of all the organizations involved in marketing products and services.

Market Market Research FirmsResearch Firms

AdvertisingAdvertising

WholesalersWholesalers

RetailersRetailers

SuppliersSuppliers

CustomersCustomers

Page 25: Global Market Environment

2-25 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

The FutureThe FutureThe FutureThe Future

The only certainty about the future is that it will be uncertain, and change will occur at an increasing rate.

It will also be more complex. Businesses and consumers now must

operate in an era of terrorism and lack of trust.

Page 26: Global Market Environment

2-26 © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th Ed

SummarySummarySummarySummary

After studying this chapter, you should be able to: Understand the nature of the marketing environment and

why it is important to marketers. Describe the major components of the social environment

and how trends in the social environment affect marketing.

Understand how the economic environment affects marketing.

See how the political/legal environment offers opportunities and threats to marketers.

Appreciate the importance of the technological environment to marketers.

Understand differences in the competitive environment. Know how changes in the institutional environment affect

marketers.