Chapter

1. 2 Chapter The Dynamic Marketing Environment After studying this chapter you should be able to explain: The concept of environmental marketing. How external environmental forces affect marketing. How external factors (markets, suppliers, intermediaries) affect marketing. How nonmarketing resources affect a firm’s marketing.

2. Chapter 2 Theme: • Looking for opportunities while avoiding threats in the marketplace…

3. Key Factors that Help or Hurt Company Success: • Company’s Internal Environment • Company’s External Marketing Environment • Includes: • Microenvironment - forces close to the company that affect its ability to serve its customers. • Macroenvironment - larger (typically uncontrollable) forces that affect most companies

4. Two Levels of External Forces have an Effect on Marketing: • Micro influences consist of suppliers, marketing intermediaries, and customers. • Macro influences include demographics, economic conditions, culture, and laws.

5. Six Interrelated Macroenvironmental Forces can Affect an Organization’s Marketing Program: • Demographics • Competition • Political and legal forces • Economics conditions • Social and cultural forces • Technology

6. Macroenvironment MNEMONICS Mac’s Dog Can’t Pee on Every Single Tree Or: DCPEST

7. Environmental Monitoring • Environmental Monitoring (Scanning) is the process of: • gathering information regarding the external environment, • analyzing that information, and • forecasting the impact of whatever trends the analysis suggests.

8. Macroenvironmental Forces Economic conditions Demo- graphics Competition COMPANY’S MARKETING PROGRAM Social and cultural forces Technology Political and legal forces

9. Demographics • Age • Income • Gender • Education • Race/Ethnicity

10. Some Key U.S.Demographic Trends Changing Age Structure Population is aging; many divisions Changing American Family Later marriage, fewer children, working women, and nontraditional households Geographic Shifts Moving to the Sunbelt, suburbs, “micropolitan areas” Better-Educated & More White-Collar Increased college attendance and white-collar workers

11. Race/Ethnicity • What’s happening in U.S. in regards to race/ethnicity? • Increasing Diversity…….. • NM is a window to the future. . . .

12. Social Forces Changing Minorities • Major Ethnic Groups as a percent of total: 2001: Wht/NH (71.0) Black (12.9) Hispanic (12.1) 2005: Wht/NH (69.3) Black (13.1) Hispanic (13.3) 2020: Wht/NH (63.8) Black (13.8) Hispanic (17.0) 2050: Wht/NH (52.8) Black (14.7) Hispanic (24.3) Source: www.census.gov January 13, 2000

13. Social Forces Changing Age Structure

14. Social Forces Changing Age Structure 1990 Source: www.census.gov January 27, 2004

15. Social Forces Changing Age Structure 2000 Source: www.census.gov January 27, 2004

16. Social Forces Changing Age Structure 2025 Source: www.census.gov January 27, 2004

17. Social Forces Changing Family Structure

18. Social Forces Population Growth

19. Most Recent Population Estimate: • What is the population of the United States? • Approximately 313 Million people • (As of Feb. 6, 2012)

22. Age Distribution of the U.S. Population Baby Boomer Generation (78 million people born 1946-1964) One of the most powerful forces shaping the marketing environment, 30% of population Generation X (45 million people born 1965-1976) More skeptical, cynical of frivolous marketing pitches promising easy success Echo Boomer Generation (72 million people born 1977-1994) Fluent and comfortable with computer, digital, and Internet technology (Net-Gens)

23. Importance of Age • Why are Baby-Boomers so important to Marketers? • 76 million of them • Who are Baby-Busters / Gen. X-er’s? • Generation Y

24. Economic Conditions • The Business Cycle - 3 stages: • Prosperity • Recession • Recovery Learn it on your own...

25. Economic Conditions Inflation - Increase in prices of goods and services. Interest Rates - How do they affect marketers? Donnie’s Z-28 purchase

26. Political and Legal Forces • Monetary and Fiscal Policies • Social Legislation and Regulation

27. Social and Cultural Forces • Environmental Consciousness • Changing Gender Roles • Changing back some though. . . . More manly men. • A Premium on Time • Physical Fitness and Health

28. Technological Environment • Faster pace of technological change; products are outdated at a rapid pace. • Almost unlimited opportunities being developed daily in health care, space industry, robotics, and bio-genetic field. • Challenge is not only technical, but also commercial – make practical, affordable versions of products.

29. Technological Forces • Some of the most dramatic technological changes occurring now are: • the declining cost and size, and increasing power, of microprocessors; • the convergence of television, personal computer, and telephone technologies; • the pervasive trend toward “connectedness” through the World Wide Web; • the emergence of biotechnology as a key component of the economy.

30. Environmental Monitoring • Environmental Monitoring (Scanning) is the process of: • gathering information regarding the external environment, • analyzing that information, and • forecasting the impact of whatever trends the analysis suggests.

31. Additional Environmental Monitoring Examples

32. KOSS Corporation (1981) • Show tape (10 min.) • What happened to KOSS?

33. What’s going on in the Macroenvironment that Sirius/XM Needs to be aware of?(opportunities/Threats)