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Marketing Management 2nd Edition

Marketing Management 2nd Edition. Michael R. Czinkota and Masaaki Kotabe. Chapter 3: Understanding the Environment and the Competition. Chapter Outline. Growing Environmental Turbulence Overall Environment Sociocultural Environment Technological Environment Economic Environment

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Marketing Management 2nd Edition

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  1. Marketing Management2nd Edition Michael R. Czinkota and Masaaki Kotabe Chapter 3: Understanding the Environment and the Competition

  2. Chapter Outline • Growing Environmental Turbulence • Overall Environment • Sociocultural Environment • Technological Environment • Economic Environment • Political and Legal Environment • Environmental Analysis • Competition

  3. Growing Environmental Turbulence 1900 Stable 1930 Reactive 1950 Anticipating 1970 Exploring 1990 Creative

  4. Overall Environment External Environment Laws Culture Marketing Environment Internal Organization Technology Suppliers Competitors Society Geography Politics Demographics Economy

  5. Sociocultural Environment • Societal trends • Goods-producing to service-producing • Materialist society to postmaterialist society • Demography

  6. U.S. Age Groups 77M born 1980 - 1999 76M born 1945 - 1964 “Baby Boomers” Millions

  7. Technological Environment • Electronic Data Interchange (EDI) • Merchandise scanning • Data sharing • Distribution relationships • Customer communication

  8. Economic Environment • Globalization • Regional economic integration • NAFTA • European Union • MERCOSUR • Exchange rates • Currency flows

  9. Political and Legal Environment • Laws and regulations • Intellectual property • Contract law • Interest groups • Stakeholders • Workers’ councils

  10. Environmental Analysis • Track information on political, social, and economic affairs; on changes in attitudes, and changes in the market. • Example: • Content analysis Method 1: Environmental Scanning

  11. Environmental Analysis • Aggregate judgment of a number of experts who cannot come together physically. Method 2: Delphi Studies

  12. Environmental Analysis • Group of employees identifies the forces of change within an industry. Method 3: Scenario Building

  13. Competition: Industry • Industry: • Group of organizations that offer products that are near substitutes for each other. • Important factors: • Size of the market • Number of organizations

  14. Competitive Structure • Issues affecting structure of competition: • Economies of scale • Government influence • Competitive history of firms • Distribution channels • Production capacity configuration

  15. Forces Driving Competition Potential entrants Threat of new entrants Bargaining power of suppliers Industry competitors Rivalry among existing firms Suppliers Buyers Bargaining power of buyers Threat of substitute products Substitutes

  16. Competitive Structure • Three types of competitive response: • Nonresponse (or slow response) • Fast response • Focused response

  17. Competitive Strategies Cost Leadership Product Differentiation Focus

  18. Attack Strategies Bypass attack Flank attack Guerilla warfare Attacker Defender Frontal attack Encirclement attack

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