The Marketing Environment
Chapter 4
Environmental Scanning
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What is
environmental
scanning?
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“The process of
continually acquiring
information on events
occurring outside the
organization.”
Why is it important?
Environmental Forces
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Social
Economic
Technological
Regulatory
Competitive
Social Forces
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Culture
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Values
Attitudes
Demographics

Who is in the population and what is
important to them?
Culture & Values
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What Values are
Important to
Americans?
Changing Role of
Women
Working Longer Hours
Source: http://www.techistan.com
The Mature Household
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Born before 1945
23% of the population
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75% of country’s wealth
Healthcare is important issue
Cautious consumers
Baby Boomers
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Born between 1946-1964
Largest group in
population
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Want to age gracefully

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75 million
Rise in cosmetic/health
products
More brand loyal than
younger groups
Source: http://www.richprice.com
Generation X
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Born between 1965-1980
17 million in U.S.
One parent households
“A lost generation”
“Cut teeth” on
technology
Value religion, rituals,
materialism
“Global teens”: Similar
experiences across
national boundaries
Source: http://banana1015.com
Generation Y
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Born after 1976
28% of the
population
Grew up with
technology
Sons and daughters
of Baby Boomers

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Politically active
Less racially sensitive
Source: http://teachers.net
Tweens

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Be“tween” being a child
and a teenager
Ages 8-12
$200 billion annually
Brand conscious

But not necessarily
brand loyal
Hispanics Buying Patterns

Purchasing power: $1.4 trillion
Unity through language
Brand loyal
Influenced by families and peers
Also influenced by advertising
Highly conservative
Common religion
Opinion leaders
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Difficulties
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Differing backgrounds
Language barrier
African-Americans Buying Patterns
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12% of population
Purchasing power: $1.2
trillion
Lower annual income
than whites
“Younger” subculture
Technological focus
Increasing media
presence
Price conscious
Unique buying patterns
Source: http://www.thevalueengineers.com
Asian Buying Patterns
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Highly educated
Strong family ties
Hard working
Hesitant to use credit
Economic Forces

“Deals with the income, expenditures, and
resources that affect the cost of running a
business or household”
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Macroeconomic
Microeconomic
Macroeconomic Forces
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Deals with entire marketaggregate of all “players”
within it.
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If consumers feel they will
be better off, they will buy
more.
If consumers feel they will
be worse off, they will opt
to save money or be
hesitant to spend it.
Source: http://www.bookbyte.com
Microeconomic Forces

Gross income
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Disposable Income
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Money remaining after
paying taxes
Discretionary Income

Source:
http://www.principlesofmicroeconomics.net
Total amount of money
earned annually by an
individual
Money remaining after
paying taxes and for
necessities
Technological Forces

Becoming increasingly important
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As technology becomes more commonplace,
prices fall.
Designs new products or improves existing
ones
Improves systems and flow of information
Internet
 Intranet
 Extranet
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Competitive Forces
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“Alternative firms that could provide a
product to satisfy a specific market’s need”
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Perfect competition
Monopoly
Oligopoly
Monopolistic competition
Competitive Forces
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Porter’s Model
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Barriers to Entry
Buyer Power
Supplier Power
Degree of Rivalry
Substitutes
Source: http://notesdesk.com/notes/strategy/porters-five-forcesmodel-porters-model/
Regulatory Forces
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“Restrictions state and federal laws place on
business with regard to the conduct of its
activities.”
Protect customers & companies
Regulatory agencies
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Consumer Product Safety Commission
Food & Drug Administration
Federal Trade Commission
Regulatory Forces
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Place-Related Legislation
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Exclusive dealing
Requirement contracts
Exclusive territorial distributorships
Tying arrangement
Promotion-Related Legislation
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Federal Trade Commission