Lecture Basic Marketing: A global-managerial approach: Chapter 4 - William D. Perreault, E. Jerome McCarthy

When you finish this chapter, you should: Know why company objectives are important in guiding strategic market planning, see how the resources of a firm affect the search for opportunities, know the variables that shape the environment of strategic market planning, know how the different kinds of competitive situations affect strategic planning,...

Evaluating

Opportunities in the

Changing Marketing

Environment

Chapter 4 Objectives

1  Know the variables that shape 

the environment of marketing 

strategy planning.

2   Understand why company 

objectives are important in 

guiding marketing strategy 

planning.

3   See how the resources of a 

firm affect the search for 

opportunities.

4  Know how the different kinds 

of competitive situations 

affect strategy planning.

5  Understand how the economic  and technological 

environment can affect  strategy planning.

6   Know why you might be sent 

to prison if you ignore the  political and legal 

environment.

7  Understand how to screen and  evaluate marketing strategy  opportunities.

8  Understand the important new  terms.

The Importance of Objectives

Setting Company

Objectives

Provide Guidelines

Coordinate Effort

Lead to Marketing

Objectives

Be Explicit

A Hierarchy of Objectives

Exhibit 4­1

R&D Objectives

HR Objectives

Marketing Objectives

Finance Objectives

Production

Objectives

Company Objectives

Sales Promotion Objectives

Mass Selling Objectives

Personal Selling Objectives

Price Objectives

Promotion Objectives

Place Objectives Product

Objectives

Limits on Opportunity Search

Marketing Strengths

Producing Capability

and Flexibility

Producing Capability

and Flexibility

Financial Strength

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The Competitive Environment

Information on Competitors

Competitive Barriers Competitive Rivals Competitor Analysis

Kinds of Markets

Key Concepts

in the Competitive

Environment

The Economic and

Technological Environment

Interest Rates

Key Economic Forces

The Impact of Technology

 Technology is the application of science to 

convert and economy’s resources to output

 Technology impacts marketing both 

through opportunities for new products and  new ways (processes) for handling 

marketing functions

 Example:  consider the Internet

 Products:  software for computer users

 Process: selling from a web site

The Political and Legal Environment

Regional Groupings

Regional Groupings

Nationalism Consumerism

Characteristics

of the Political Environment

Agencies  Responsibilities

Federal Trade Commission (FTC)  Enforces laws and develops guidelines 

regarding unfair business practices Food and Drug Administration (FDA) Enforces laws and develops regulations to 

prevent distribution and sale of hazardous  consumer products

Consumer Product Safety Commission  Enforces Consumer Product Safety Act

(CPSC)

Federal Communications Commission  Regulates interstate wire, radio, and 

Environmental Protection Agency (EPA) Develops and enforces environmental 

protection standards Office of Consumer Affairs (OCA)  Handles consumer complaints

Exhibit 4­4

Some Important U.S Federal

Regulatory Agencies

The Cultural and Social Environment

Cultural Trend:

The Changing Roles of Women

Cultural Trend:

The Changing Roles of Women

Time Poverty

Economic Power

Career Opportunity

Sales and Cost Curves of

Two Strategies

Exhibit 4­6

Years

Sales

Product A

In this graphic,  a  too­narrow focus on the  first year’s results might  cause the marketing 

manager to abandon this  product as too costly.

Sales and Cost Curves of

Two Strategies

Total cost

Years

Sales

Product B

In this graphic,  a 

too­narrow focus on 

the first year’s results 

might cause the 

marketing manager 

to adopt the product 

prematurely,  since its 

performance in year 

one is misleading.

Sales and Cost Curves of

Two Strategies

Exhibit 4­6

Years

Sales

Product A

Total cost

Years

Sales

Product B

Seen together, it is easy to see that Product A offers a vastly better overall return than does Product B

Industry Attractiveness

High Medium Low

No Growth

Borderline

Growth Evaluating Opportunities

Insensitive Sensitive

Basic commodity­type consumer

products

Industrial

are linked to cultural variables

Exhibit 4­8

Continuum of Environmental Sensitivity

Technology Nationalism NAFTA

Consumerism Cultural and Social Environment Strategic Business Unit (SBU)

Portfolio Management

Mission Statement

Competitive Environment

Competitor Analysis

Competitive Rivals

Competitive Barriers

Economic and Technological

   Environment

Key Terms