Chapter Four

EVALUATING OPPORTUNITIES IN THE CHANGING MARKETING ENVIRONMENT

External Market Environment

OBJECTIVES SHOULD SET THE FIRM’S COURSE

Three basic guidelines for objectives

1. Must serve socially and economically useful function
2. Must carry on the business
3. Must provide enough profit to survive

Note: See exhibit 4-1, page 93

THE COMPETITIVE ENVIRONMENT

Must conduct competitor analysis to evaluate the strengths and weaknesses of current and potential competitors’ marketing strategies.

See exhibit 4-2,  page 98

THE ECONOMIC ENVIRONMENT

Affects the way the firm and the whole economy uses resources. It includes interest rates, inflation, and the economies of other countries, etc.

THE TECHNOLOGICAL ENVIRONMENT

Involves the technical skills and equipment used to convert resources into output. The pace is rapid and whole new industries can be created.

Ethics: Firms must decide what technical advancements are ethically acceptable.

Note: Internet technologies are reshaping marketing.

THE POLITICAL ENVIRONMENT

Nationalism can be strong. For example “Buy America”

Unification of the European markets has its own trade rules and restrictions on markets.

NAFTA has caused tariffs to drop, resulting in significant impacts on businesses.

Consumerism has increased the rights and powers of consumers.

THE LEGAL ENVIRONMENT

See exhibit 4-3, page 105

“Let the buyer beware”

THE CULTURAL AND SOCIAL ENVIRONMENT

Woman's role is no longer “in the home”

Change comes slowly

PLANNING GRIDS HELP EVALUATE A PORTFOLIO OF OPPORTUNITIES

Very important!!!  See exhibit 4-7, page 112