Fall 2011 chapter 7 slides

Chap

ter 2

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2- 1

The Market in Marketing

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Chapter Objectives

1. What are the components of the marketing environment? How do those elements affect marketing strategy?

2. What are consumer markets?

3. How are business markets similar to consumer markets? How are they different?

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 3Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Objective 1

What are the components of the

marketing environment? How do those

elements affect marketing strategy?

DEFINED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 4Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

The Marketing Environment is a

set of forces, some controllable and

some uncontrollable, that influence the

ability of a business to create value and

attract and serve customers.

EXPLAINED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 5Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Organization

Micro Environment

Macro Environment

Economy

Political

Technology

Social

Buyers

Suppliers

Competitors

Internal Environment

ExternalEnvironment

Loss of Control

APPLIED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 6Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Marketing Environment

External Environment

Micro- Environment

Macro- Environment

CustomersCompetitors

SuppliersPartners

TechnologyPolitical

Social / CulturalLegal

Economic

APPLIED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 7Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Microenvironment

Bargaining power of

customers

Threat of substitute products

Bargaining power of suppliers

Threat of new

entrants

Competitive rivalry within

an industry

Porter’s Five Forces

APPLIED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 8Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Macroenvironment

Economic

Social / Cultural

Competitive

LegalPolitical

Technological

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 9Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Objective 2

What are consumer markets?

DEFINED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 10Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Consumer Markets are the end

user of the product or service and

include individuals and

households that are

potential or actual buyers

of products or services.

EXPLAINED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 11Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Consumer Markets

$10 Trillion

ID

AZ

UT

MT

WY

NM

CO

AL

FL

SC

TN

KY

INOH

NC

SD

KS

NE

MN

WI

IA

IL

MO

AR

MS

OK

ND

OR

CA NV

WA

AK

PA

ME

VA

NY

CT

WV

MDNJ

VT

NH

MA

DE

RI

HI

LA

MI

GA

TX

4 states account for 1/3rd of buying power:

CaliforniaTexasFloridaNew York

U.S. Consumer Buying Power in 2007

APPLIED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 12Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Consumer Markets

Heavily influenced by promotion

Brand names used to convey value

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 13Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Objective 3

How are business markets similar to

consumer markets? How are they different?

THINK

ABOUT

IT

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 14Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Consumer / Business Markets

Consumer Market

Business Market

DEFINED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 15Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Business Markets include individuals

and organizations that are potential or

actual buyers of goods and services that are

used in, or in support of,

the production of other

products or services that

are supplied to others.

EXPLAINED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Business Markets

Manufacturers

Intermediaries

Universities

Governments

THINK

ABOUT

IT

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 17Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

NAICS

Level Code Description

Sector 51 Information

Subsector 513 Broadcasting and telecommunications

Industry Group 5133 Telecommunications

Industry 51332 Wireless telecom carriers (except satellite)

U.S. Industry 513321 Paging

EXPLAINED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 18Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Buying Classifications

• New Task

• Modified Rebuy

• Straight Rebuy

APPLIED

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 19Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Business vs. Consumer Markets

Characteristic Business Markets Consumer Markets

Demand Organization Individual

Purchase Volume Larger Fewer

# of Customers Fewer Many

Location of buyers Concentrated Dispersed

Distribution Direct Indirect

Nature of buying Professional Personal

Buying Influence Multiple Single

Negotiations Complex Simpler

Reciprocity Yes No

Leasing Greater Lesser

Promotion Method Personal Selling Advertising

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 20Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 2-

Visual Summary