Chapter 2

The Dynamic
Marketing
Environment

2-1
McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 Chapter Goals
• The concept of environmental monitoring
• The effect of external environmental forces
on an organization’s marketing
• The influence of external factors on a firm’s
marketing
• The effect of a firm’s nonmarketing
resources on its marketing

2-2
McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 Levels of External Forces

Macro Level
Influences that affect all firms

Micro Level
Influences that affect a particular firm

2-3
 External Macroenvironment Forces

2-4
 Demographics

People Make
Make Characteristics of
Characteristics of
People
Markets Populations
Populations
Markets

Size
Size

Distribution
Distribution Growth
Growth

2-5
 Economic Factors

People with
People with
Stage of
Stage of the
the
Money to
Money to Spend
Spend
Business
Business
and Willing
and Willing toto
Cycle
Cycle
Spend itit
Spend

Interest
Interest
Inflation
Inflation Rates
Rates

2-6
 Competition

Rivals
Rivals Brand
Brand
forCustomers’
for Customers’ Competition
Competition
Limited
Limited
BuyingPower
Buying Power Substitute Every
Substitute Every
Products
Products Company
Company

Differential Advantage
Differential Advantage

2-7
 Social and Cultural Forces

Socio-cultural
Socio-cultural
People Make
People Make Patterns
Patterns
Markets
Markets Changing Quickly
Changing Quickly

Lifestyles
Lifestyles
Values
Values
Beliefs
Beliefs

2-8
 Social and Cultural Changes

Concern for
Concern for Quality
Quality not
not
Natural Environment
Natural Environment Quantity
Quantity

Changing Gender
Gender Roles
Roles Two
Two Incomes
Incomes
Changing and
and Balance
Balance

Premium on
Premium on Time
Time Convenience
Convenience

Physical Fitness
Physical Fitness and
and
Exercise
Exercise and
and Diet
Diet
Health
Health

2-9
 Political and Legal Forces

Monetary
Monetary Social Legislation
Social Legislation
and
and and
and
Fiscal Policies
Fiscal Policies Regulation
Regulation

Governmental
Governmental Legislation
Legislation
Relationship
Relationship Related
Related
with
with to
to
Industries
Industries Marketing
Marketing
2-10
 Legislation Affecting Marketing
Regulate Competition
• Sherman Antitrust Act • Wheeler-Lea Act
• Federal Trade • Lanham Trademark
Commission Act • Consumer Goods
• Clayton Antitrust Act Pricing Act
• State Unfair Trade • Various deregulation
Practices Acts laws pertaining to
• Robinson-Patman Act specific industries

2-11
 Legislation Affecting Marketing
Protect Consumers
• Pure Food and Drug Act
• Automobile Disclosure Act
• Kefauver-Harris Drug
Amendments
• National Traffic and Motor
Vehicle Safety Act
• Fair Packaging and Labeling
Act
• Cigarette Labeling and
Advertising Acts
2-12
• Consumer Credit Protection
Act
• Consumer Product Safety Act
• Consumer Product Warranty
Act
• FTC Improvement Act
• Nutritional Labeling and
Education Act
• Children’s Television Act
 Technology
Impactslifestyles,
Impacts lifestyles, AffectsHow
How
Affects
consumptionpatterns,
consumption patterns, Marketingis
Marketing is
economicwell-being
economic well-being CarriedOut
Carried Out

Starting
Starting
New
New
Industries
Industries Altering
Altering
Existing
Existing
Industries
Industries Stimulates
Stimulates
Markets
Markets
and
and
OtherIndustries
Other Industries

2-13
 External Microenvironment

2-14
 Internal Environment

2-15
 Operating Environment

2-16
 XM Satellite Radio
What consumer needs does
satellite fill?

2-17