MARKETING Golden CHAPTER 3

MARKETING MARKETING ENVIRONMENTENVIRONMENT

Consists of external forces that directly or indirectly influence an organization’s acquisition of inputs (financial, human, natural, and information) and creation of outputs (products).

MARKETING Golden CHAPTER 3

COMPETITIVE FORCESCOMPETITIVE FORCES Competition: Other

organizations that market products similar to or that can be substituted for a marketer’s products in the same geographic area.

MARKETING Golden CHAPTER 3

TYPES OF COMPETITIONTYPES OF COMPETITION

• Brand Competitors (Pepsi –vs- Coke)• Product Competitors (Pepsi –vs-

Snapple)• Generic Competitors (Pepsi –vs- Tap Water)• Total Budget Competitors (Pepsico –vs- Proctor & Gamble)

MARKETING Golden CHAPTER 3

COMPETITIVE COMPETITIVE STRUCTURESSTRUCTURES

• Monopoly: No close substitutes and organization is sole source of supply.

• Oligopoly: A few sellers dominate.• Monopolistic: Many potential

competitors trying to develop a differential marketing strategy.

• Pure Competition: Large number of sellers with none strong.

MARKETING Golden CHAPTER 3

ECONOMIC FORCESECONOMIC FORCES• Prosperity: Low unemployment &

high income• Recession: Unemployment up &

buying power down• Depression: Very high

unemployment, very low wages, and very low disposable income

• Recovery: From recession or depression to prosperity

MARKETING Golden CHAPTER 3

BUYING POWERBUYING POWERResources such as money, goods,

and services that can be traded in an exchange.

• Income• Disposable Income• Discretionary Income• Wealth• Willingness to Spend

MARKETING Golden CHAPTER 3

POLITICAL FORCESPOLITICAL FORCES

• Closely related to the legal and Regulatory Forces because legislation, legal decisions, and regulatory agencies are created and operated by elected officials.

MARKETING Golden CHAPTER 3

LEGAL AND LEGAL AND REGULATORY FORCESREGULATORY FORCES

Procompetitive Legislation and Consumer Protection

– Sherman Antitrust Act (1890)– Clayton Act (1914)– FTC Act (1914)– Robinson-Patman Act (1936)– Nutrition Labeling & Education Act (1990)– Do Not Call Implementation Act (2003)

MARKETING Golden CHAPTER 3

FEDERAL TRADE FEDERAL TRADE COMMISSION (FTC)COMMISSION (FTC)

• Regulates a variety of business practices and curbs:– False Advertising– Misleading Pricing– Deceptive Packaging & Labeling

MARKETING Golden CHAPTER 3

SELF REGULATIONSELF REGULATION

• Better Business Bureau (BBB)

• National Advertising Review Board (NARB)

MARKETING Golden CHAPTER 3

TECHNOLOGICAL TECHNOLOGICAL FORCESFORCES

• Technology:The application of knowledge and tools to solve problems and perform tasks more efficiently.– Physiological needs– PC– Dynamics, Reach, and Self-Sustaining

Nature– Marketing productivity

MARKETING Golden CHAPTER 3

SOCIOCULTURAL SOCIOCULTURAL FORCESFORCES

•The influence in a society and its cultures that change people’s attitudes, beliefs, norms, customs, and lifestyles.

MARKETING Golden CHAPTER 3

DEMOGRAPHICS AND DEMOGRAPHICS AND DIVERSITYDIVERSITY

• Increase of Older Consumers

• Singles on the Rise

• Another Baby Boom

• Rising Multicultural Nature of USA

MARKETING Golden CHAPTER 3

CULTURAL VALUESCULTURAL VALUES

• Health Consciousness

• Family and Marriage Values

• Environmental Consciousness

• Consumerism