Overview
This lecture covers the marketing environment, focusing on how uncontrollable micro- and macro-environmental factors influence marketing strategies, and the importance of environmental scanning for success.
Environmental Scanning and Its Importance
- Environmental scanning is the process of continuously gathering information on external events to identify and interpret trends.
- It enables organizations to anticipate changes and adapt their marketing programs accordingly.
- Failure to monitor the environment can cause even good products or marketing plans to fail due to unforeseen factors.
Microenvironmental Factors
- Microenvironment includes company capabilities, competition, and corporate partners.
- Firms must focus on consumer needs that match their core competencies to maintain value.
- Understanding direct and indirect competitors is critical; companies use Competitive Intelligence (CI) to gather information.
- Firms rely on alliances with suppliers and partners to effectively deliver goods and services.
Macroenvironmental Factors (CDSTEP)
- Macroenvironment consists of Culture, Demographics, Social/Natural environment, Technology, Economic factors, and Political/Legal environment (CDSTEP).
- Culture impacts consumer preferences and responses; both country and regional cultures must be considered.
- Demographics such as age, gender, ethnicity, income, and education inform market segmentation and targeting.
- Generational cohorts (Gen Z, Y, X, Baby Boomers) have different values and behaviors affecting marketing.
- Economic factors like income, inflation, and consumer confidence affect purchasing power and market potential.
- Technological advances, AI, robotics, and IoT are reshaping marketing and consumer behavior.
- Political/legal environments involve laws and regulations affecting business practices and trade.
- Social/natural trends (e.g., green consumers, privacy, time-poor society, health concerns) shape consumer values and buying habits.
Contemporary Issues and Examples
- Criticism of brands (e.g., Nike) regarding workplace culture can affect public perception.
- Partnerships reflecting values (e.g., Biles with Athleta) help shape brand reputations.
- Companies like Adidas address environmental issues with products made from recycled ocean plastic.
- Marketers adapt messaging and offerings in response to trends like gender equality, diversity, and multiculturalism.
Key Terms & Definitions
- Environmental Scanning â Ongoing process of acquiring external information to spot trends and threats.
- Microenvironment â Immediate forces (company capabilities, competition, partners) affecting a firm's operations.
- Macroenvironment â Broader, uncontrollable forces (culture, demographics, social trends, technology, economy, politics/law) impacting all organizations.
- Demographic Segmentation â Market division based on demographic characteristics like age, income, or gender.
- Generational Cohort â Group of people born during the same time, sharing similar experiences and behaviors.
- Competitive Intelligence (CI) â Legal and ethical collection of information about competitors.
- CDSTEP â Acronym for macroenvironmental forces: Culture, Demographics, Social/Natural, Technology, Economic, Political/Legal.
Action Items / Next Steps
- Start the individual Marketing Analysis assignment; download instructions from the Assignments area.
- Review Chapter 3 slides and relevant textbook sections for deeper understanding of micro and macroenvironmental factors.
- Prepare analysis of the marketing environment for your chosen industry or organization.