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Essentials of Marketing Management - 1
Essentials of Marketing Management - 1
MARKETING MANAGEMENT
William M. Pride and O.C. Ferell
CHAPTER 1:
THE MARKETING ENVIRONMENT, SOCIAL
RESPONSIBILITY AND ETHICS
• The marketing environment consists of external forces that directly or
indirectly influence an organization’s acquisition of inputs (human,
financial, natural resources and raw materials, information) and creation
of outputs (goods, services and ideas)
• Includes six forces namely:
1.Competitive forces
2.Economic forces
3.Political forces
4.Legal and Regulatory forces
5.Technological forces
6.Sociocultural forces
ENVIRONMENTAL SCANNING
• The process of collecting information about forces in the marketing
environment
• Scanning involves observation; secondary sources such as business,
trade, government, internet and market research
• Example:
After the financial crisis caused by worldwide recession, the US government
passed established a new Consumer Financial Protection Bureau to
protect consumers from deceptive financial practices
4. LEGAL AND REGULATORY FORCES
• Federal, state, and local bodies can set rules or restrictions on the
conduct of businesses. The purpose of regulation is to protect both
consumers and businesses. Businesses favor some regulations (such as
patent laws) while chafing under others (such as restrictions on
advertising)
Example:
the tobacco industry has had to learn to live with a federal ban on TV and
radio advertising
5. TECHNOLOGICAL FORCES
• The word technology brings to mind scientific advances such as electric vehicles,
smartphones, virtual office communication, life style, radio frequency identification tags,
and more. Such development make it possible for marketers to operate more efficiently
and provide an exciting array of products for consumers. However, even though these
innovations are outgrowths of technology, none of them is technology
Technology – the application of knowledge and tools to solve problems and perform tasks
more efficiently
• Also determines how we, as a member of society, satisfy our psychologic needs
Example:
When’s the last time you rented a VHS tape of a new movie? If you had trouble finding it,
that’s because DVDs are in and videotapes are out. Videotape makers who were monitoring
technological trends in the industry would probably have taken steps to keep up (go into
DVDs) or otherwise protect themselves from losses (maybe even getting out of the market).
In addition to making old products obsolete, technological advances create new products.
6. SOCIOCULTURAL FORCES
• Influences the society and its culture that brings out changes in attitudes,
beliefs, norms, customs and lifestyles
• Profoundly affecting how people live, these forces help to determine what,
where, how, when people buy products