MICRO ENVIRONMENT a set of forces, some controllable
and some uncontrollable, that FIRM Decreasing Control influence the ability of a business to create value and attract and serve customers. marketing environment: SWOT analysis helpful harmful
strengths weaknesses
opportunities threats marketing environment Environmental scanning The process of collecting information about forces in the marketing environment Methods: Observation Secondary sources Market research
responding to environmental environmental environmental scanning analysis forces marketing environment Environmental analysis The process of assessing and interpreting information gathered through environmental scanning Is the information accurate? Is the information consistent? Is the information significant? Is the information relevant?
responding to environmental environmental environmental scanning analysis forces marketing environment Responding to Environmental Forces Reactive approach Passive view of environment as uncontrollable Current strategy is cautiously adjusted to accommodate environmental changes Proactive approach Actively attempts to shape and influence environment Strategies are constructed to overcome market challenges and take advantage of opportunities
responding to environmental environmental environmental scanning analysis forces marketing environment
economic forces competitive forces political forces
economic forces competitive forces political forces
legal forces sociocultural forces
technological forces the microenvironment: porter’s 5 forces
Bargaining power of customers
Bargaining Competitive rivalry Threat of
power of within an substitute suppliers industry products
Threat of new entrants types of competitors
brand competitors industry competitors
form competitors generic competitors
types of competitors
market products with similar features and benefits to the same
customers at similar prices
brand competitors industry competitors
form competitors generic competitors
types of competitors
compete in the same product class, but their products have different features, benefits, and prices
brand competitors industry competitors
form competitors generic competitors
types of competitors
provide very different products that solve the same problem or
satisfy the same basic customer need
brand competitors industry competitors
form competitors generic competitors
types of competitors
compete for the limited financial resources of the same customers
brand competitors industry competitors
form competitors generic competitors
monitoring competition Helps determine competitors’ strategies and their effects on firm’s own strategies
• Guides development of competitive advantage and adjusting firm’s
strategy
• Provides ongoing information about competitors
• Assists in maintaining a marketing orientation
economic, political and legal forces marketing environment
economic forces competitive forces political forces
legal forces sociocultural forces
technological forces expectations and willingness to spend future income employment levels
willingness to spend prices family size
general economic conditions economic cycle
prosperity
recession
recovery
depression
time marketing environment
economic forces competitive forces political forces
legal forces sociocultural forces
technological forces political forces
proactive reactive response response
campaign contributions making adjustments to business political action committees practices as laws are passed lobbying elected officials major laws affecting marketing decisions
Law Description Sherman Antitrust Act (1890) Prohibits contracts or conspiracies to restrain trade Pure Food and Drug Act Prohibits the adulteration and mislabeling of food and drug (1906) products Robinson-Patman Act (1936) Prohibits price discrimination Wheeler-Lea Act (1938) Prohibits unfair or deceptive acts or practices, regardless of whether competition is injured Fair Packaging and Labeling Prohibits the unfair or deceptive packaging or labeling of (1966) consumer products Digital Millennium Copyright Refines copyright laws to protect digital versions of Act (1998) copyrighted materials, such as music and movies Children’s Online Privacy Regulates the online collection of personally identifiable Protection Act (2000) information from children under the age of 13 marketing environment
economic forces competitive forces political forces
legal forces sociocultural forces
technological forces major regulatory agencies Agency Area of Responsibility Federal Trade Enforces laws and guidelines regarding business practices; takes action Commission (FTC) to stop false and deceptive advertising, pricing, packaging, and labeling Food and Drug Enforces laws and regulations to prevent distribution of adulterated or Administration (FDA) misbranded foods, drugs, medical devices, cosmetics, veterinary products, and potentially hazardous consumer products Consumer Product Ensures compliance with the Consumer Product Safety Act; protects the Safety Commission public from unreasonable risk of injury from any consumer product not (FCC) covered by other regulatory agencies Federal Regulates communication by wire, radio, and television in interstate and Communications foreign commerce Commission (FCC) Environmental Develops and enforces environmental protection standards and Protection Agency conducts research into the adverse effects of pollution (EPA) Federal Power Regulates rates and sales of natural gas producers, thereby affecting Commission (FPC) the supply and price of gas available to consumers; also regulates wholesale rates for electricity and gas, pipeline construction, and U.S. imports and exports of natural gas and electricity technological and sociocultural factors marketing environment
economic forces competitive forces political forces
legal forces sociocultural forces
technological forces technological forces
Technology The application of knowledge and tools to solve problems and perform tasks more efficiently Impact of Technology Dynamic means constant change Reach refers to how technology quickly moves through society. The self-sustaining nature of technology is the catalyst for even faster development marketing environment
economic forces competitive forces political forces
legal forces sociocultural forces
technological forces sociocultural forces
aging population environmental values
more people living alone family makeup and values
entering another baby marital/parental status boom increase in multiculturalism income and education
health concerns and values age, gender, race, ethnicity
marketing environment
economic forces competitive forces political forces
