Scanning The Marketing Environment By Agung Utama Kotler

Scanning The Marketing Environment By: Agung Utama

� Kotler on marketing : “ Today, you have to run faster to stay in the same place”. � Successful companies take an outside-inside view of their business. � They recognize that the marketing environment is constantly presenting new opportunities and threats. � They understand the importance of continuously monitoring and adapting to that environment.

Analyzing needs and trends in the macro environment � Successful companies recognize and respond profitably to unmet needs and trends. � Companies could make a fortune if they could solve any of this problem: a cure for cancer, chemical cures for mental diseases, desalinization of seawater, etc. � Many opportunities are found by identifying trends.

Trends �A trends is a direction or sequence of events that has some momentum and durability (Kotler) or a gradual, long-term up or down movement of demand (Russel). � A new product or marketing program is likely to be more successful if it is in line with strong trends rather than opposed to them. � For example : the percentage of people who value physical fitness and well being has risen steadily over the years, especially in the under 30 group, the young women and people living in the west. Marketers of health foods and exercise equipment capture to this trend with appropriate products and communications.

Identifying and responding to the major macro environment forces. � Macro environment forces and trends shape opportunities and threats for the company, marketing intermediaries, customers, competitors and publics. � The company must monitor and respond to the forces of macro environment because it represents “ non controllable forces”. � It is including: 1. Demographic environment 2. Economic environment 3. Natural environment 4. Technological environment 5. Political legal environment 6. Socio-cultural environment

1. • Demographic environment World wide population growth : Ø Ø The world population is showing explosive ( totaled 6. 1 billion in 2000 and will exceed 7. 9 billion by the year 2025) It can be source of major concern: Ø Ø Ø Certain resources are limited and may run out at some point. It is highest in countries and communities that can least afford it. Explosive population growth does not mean growing market unless have sufficient purchasing power, nonetheless companies that carefully analyze their market can find major opportunities.

� Population age mix Ø National populations vary in their age mix. Mexico, has a very young population and rapid population growth, at the other hand, Japan, a country with one of the world oldest population. ØMilk, diapers, school supplies, and toys would be important product in Mexico, while adult products would be important in Japan. ØA population can be subdivided into six age groups: pre school, school-age children, teens, young adults (age 25 to 40), middle-aged adults (age 40 to 65), and older adults age ( age 65 and up). ØFor marketers, the most populous age groups shape the marketing environment.

� • Ethnic and other markets Ø Countries vary in ethnic and racial markets. Ø at one extreme is Japan, where almost every one is Japanese; at the other is USA, which is consists of 72 % white, African American 13 % and Latinos 11 %. ØEach group has certain specific wants and buying habits. Ø Yet, marketers must be careful not to overgeneralize about ethnic groups. Educational levels ØThe population classified into 5 educational groups: illiterates, high school dropouts, high school degrees, college degrees, and professional degrees. ØEach groups has certain specific wants and individual ability.

� House hold pattern ØThe traditional household consists of a husband, wife, and children ( and some times grand parents). ØYet, in USA, one out of eight households is “diverse or non traditional “ includes: single lives alone, adult live-togethers of one or both sexes, single parents families, childless married couples, and empty nesters. More people are divorcing or separating, choosing not to marry, marrying later, or marrying without to have children. ØEach groups has a distinctive set of needs and buying habits.

2. Economic environment Ø Markets require purchasing power as well as people. Ø The purchasing power depends on : Ø Ø Current income Prices savings, Debt and credit availaibility. Ø Marketers must pay close attention to major trends in income and consumer-spending behavior. Ø Marketers often distinguish countries with five different income distribution patterns : very low incomes, mostly low incomes, very low-very high incomes, low, medium, high incomes, and mostly medium incomes.

� Savings, debt, and credit availability. ØConsumers expenditures are affected by savings, debt, and credit availability. ØThe Japanese save about 13. 1 % of their income, other wise, US consumers about 4. 7%. ØThe result has been that Japanese banks were able to loan money to Japanese companies at a much lower interest rate than US bank, so Japanese companies expand faster. ØThe bottom line is that marketers must pay careful attention to major changes in incomes, cost of living, interest rates, savings, and borrowing patterns because they can have a strong impact on business.

3. Natural environment • The marketers need to be aware of the threats and opportunities associated with four trends in natural environment; Ø Ø 4. Shortage of raw materials Increased energy cost Anti-pollution pressures Changing role of governments. Technological environment • One of the most dramatic forces shaping people’ lives is technology • Technology has released such wonders as penicillin, open heart surgery, the birth control pill. • It has released such horrors as hydrogen bomb, nerve gas, submachine gun. • Every technology is a force for “creative destruction” such as autos hurt the rail roads, and television hurt the newspaper.

� The economy’s growth rate is affected by how many major new technologies are discovered. � New technology also creates major long run consequences that are not always foreseeable. The contraceptive pill, led to smaller families, more working wives, and larger discretionary incomes, resulting in high expenditures on vacation travel, durable goods and luxury items. � The marketer should monitor the following trends in technology: the pace of change, the opportunities for innovation, varrying R&D budgets, and increased regulation.

5. Political legal environment • This environment is composed of laws, government agencies, and pressure groups that influence and limit various organization and individuals. • Business regulation Ø Business regulation has three main purposes: to protect business from : 1)unfair competition, 2) unfair business practices and 3) to protect the interests of society from unbridled business behavior. Ø Marketers must have a good working knowledge of the major laws protecting competition, consumers, and society. • Growth of special interest groups. Ø An important force affecting business is the consumerist movement, an organized movements of citizens and government to strengthen the rights and power of buyers in relation to sellers. Ø The consumerists has advocated the true interests cost of loan unit pricing, the basic ingredients in a product, the nutritional quality of foods, the freshness of product, and the true benefits of a product.

6. • Socio-cultural environment High persistence of core cultural values. Ø Ø The people living in a particular society hold many core beliefs and values that tend to persist. Most American still believe in work, in getting married and in being honesty. Core beliefs and values are passed on from parents to children and are reinforced by major institutions: schools, churches, mosque, business, and governments. Secondary beliefs and values are more open to change. Believing in the institution of marriage is a core belief, believing that people ought to get married early is a secondary beliefs. Marketers have some chance of changing secondary values but little chance of changing core values.