MGCR 352: Chapter 3 Analyzing the Market Environment

What is the importance of analyzing the marketing environment

• monitor internal/external environment

• examine market segmentation possibilities

• rethink offering of products/services

• need to have an eye on competitors

Importance of environmental scanning

• acquire information outside company events

• identify potential threats

• track environmental trends

Macroenvironmental factors

• company (its capabilities)

• competition

• corporate partners

Microenvironmental Factors

• economic

• technology

• social/natural

• demographics

• culture

• political/legal

consumer is at the centre

What is and how should we manage the firms value chain?

What are company capabilities and what does it allow it to do?

• resources and skills a firm has

• allows to compete in the market + deliver value

why is it important to know about competitors in the market environment and how do you gather this information

• know strengths/weaknesses

• competitive intelligence used to collect and interpret info

What are corporate partners in business?

• external firms that a company works with → achieve shared goals

• most companies operate within alliances → not in isolation

Microenvironmental Scan: Social

• growing diversity of canadian population

• aging

• obesity

• eco-consciousness

Microenvironmental Scan: Economic

• value experience over buying

• online shopping boom

Microenvironmental Scan: Technological

• increasing digital tech and nanotech

• open source software movement

• advances in biotech, cosmetic surgery, cancer drugs

Microenvironmental Scan: Competitive

• china as world leader

• mergers create scale and improve competition

• increased focus on empowering workers to improve performance

Microenvironmental Scan: Regulatory

• new legislation related to digital copyright, intellectual property protection, consumer privacy

• increased emphasis on free trade

• deregulation of industries to encourage competition

Microenvironmental Scan: Social Forces

• include demographic characteristics of population and cultures

Ethnic Diversity

• most immigrant groups and minorities live in large cities of Canada

• use special and specific marketing efforts to reach distinct ethnic groups

Culture

shared set of learned values, ideas, attitudes, and behaviours

why do consumers prioritize value

concern for best features at cheap price

Demographics

• characteristics of human populations

• most common segmentation

• information is widely available

• assess customers needs/position

economy

pertains to the income/expenditures/resources that affect the cost of running a business and household

Gross income

total amount of money made in one year by a person, household, family unit

Disposable income

money a consumer has left after paying taxes to use for such necessities as food, shelter, clothing, transportation

discretionary income

is the money that remains after paying for taxes and necessities

Technology forces

• innovations

• tech impacts customer value by reducing costs

• provides value for new products

• existing products may be replaced

5 Types of Competitive Forces

• pure competition

• monopoly

• oligopoly

• monopolistic competition

• Monospony

Pure competition

many firms with similar products

Monopoly

only one firm sells the product

Oligopoly

few companies control majority of sales

monopolistic competition

many firms sell similar products

monopsony

only one firm buys the product

Technology impacts marketers through

• internet of things

• electronic commerce

• intranet: within the firm

• extranet: between company and its suppliers

• marketspace

• e-business

• e-marketing

generational cohorts

group of people of the same generation that have similar purchase behaviours bc they have shared experiences and same stage in life

Income and purchasing power

• purchasing power is tied to income

• 3 different classes

Education

related to income, which determines spending power

gender

• male/female roles have been shifting

• marketing has changed to reflect those changes

artificial intelligence

• rely on pre-trained computer systems and massive volume of information to perform/generate tasks that require human intelligence

why is artificial intelligence used?

• advanced customer segmentation

• media selection and message potential customers

• higher customer engagement and satisfaction

• higher market intelligence

internet of things

smart devices with internet-connected sensors share the data they collect, helps people and businesses track performance and make products or services more efficiently

foreign currency fluctuations

• combined with inflation and interest rates of firm’s ability to market goods and services

• monitor general/economic situation domestically and abroad

changing social trends:

• greener consumers

• privacy concerns

• time-poor societies

• health and wellness concerns

Competition act

encourages competition sets out criminal charger for major violations such as price fixing, misleading marketing and unlawful acts, allows for review of business matters such as mergers

Consumerism

movement to increase influence power and rights of consumers in dealing with institutions

Time Poor society

• marketers are faced with challenge of finding creative ways to get messages out to consumer

• goal: final/develop methods to make life easier for diverse consumers in a time-poor society marketers often rely on technology