1 Chapter 2. The Marketing Environment наfocus on the marketing ...
1
Chapter 2. The Marketing Environment focus on the marketing environment—the factors that marketers monitor to stay current and informed—and explain how these factors impact marketing decisions Dempster's breads Andrew Pollock, senior vice president of marketing at Canada Bread; Dempster's competes with instore bakeries offer freshly baked breads as well as prepackaged loaves that appear sidebyside on supermarket shelves must deliver the very best quality to really stand out in the marketplace Dempster's was started by the James Dempster bakery in the early 1900s; later purchased by Canada Bread and Maple Leaf Foods; Dempster's Smart bread, a highly successful brand developed to meet changing consumer needs; Smart bread has become an $80 million business for Canada Bread marketing of Smart bread marketing environment looks at demographic trends, sociocultural changes, the economic environment, the use of technology, the competitive nature of the market, and regulatory forces; considered the latest trends and concerns Sociocultural factors: understand consumers' food interests; families were experimenting with new food choices; wider assortment of multicultural dishes and ethnic foods; Society was also becoming more aware of the relationship between food,; nutrition, and health and looking for nutritious, easy, mealtime solutions; Nutrition and the environment were top concerns; were not always willing to pay a premium for these benefits; saw an opportunity in the health and nutrition area Demographic factors continued increases in singleparent families, timestarved parents, and an aging population that was educated and knowledgeable; opportunity to help busy families make informed decisions on nutritious food choices; make mealplanning easier Its target market consisted (1) dualincome soccer moms, which are timestarved parents looking for ideas on quick and nutritious tasty meals; (2) nofrills families, people who watch their pennies and want affordable nutritious foods; (3) healthy foodies, adults who love food and are focused on health and nutrition; and (4) privatelabel pensioners, older adults who are pricesensitive and see bread as a functional food. dualincome soccer moms and nofrills families had the strongest business potential Economic factors: bread is recessionproof; uncertain economic times people buy bread more than ever; choose to bring sandwiches to work; demand for quality breads was strong in the current economic climate Technological factors: target markets were at ease with the Internet; should continue to integrate online approaches into communication programs
2
Competitive factors: strong branded presence in the retail industry; seen as a topquality brand competing headon with brands such as Wonder Bread and D'Italiano Regulatory factors: ensure that all products meet government guidelines for health and safety; The Canadian Food Inspection Agency adds another level of complexity, vetoing the use of certain ingredients and manufacturing practices unless they fall within approved guidelines; realized that working within these regulations is a necessary but a timeconsuming challenge looked at these areas of the marketing environment and saw substantial business opportunities in a softtextured, morenutritious white bread; almost a third of current white bread purchasers would buy such a product as long as it had the same soft texture and appearance as their regular white bread; created product prototypes; fielded consumer research to select a winning formulation; blend of whole grain and white flour was selected knew it could not make overt health claims; relied on the product name and subtle claims positioned Smart bread to appeal to consumer needs for a softtextured, nutritious family bread that is fun for kids (influencers in the category); cleverly emphasized the product benefit; created a superhero mascot, Smartman; mascot could distinguish the brand and make emotional connections with kids; differentiated the brand and made a bold statement in the category; mascot makes appearances at store openings and during instore promotional events The Marketing Environment A marketing environmental scan helps marketers identify what changes affect their consumers take this approach and scan the elements of the marketing environment to identify business opportunities integrate sound business ideas into marketing plans that provide direction for the business use this approach to stay apprised of changes monitor the marketing environment with a view to capitalizing on new opportunities and curtailing potential threats marketers scan the marketing environment and review six key areas of focus: (1) demographic forces, (2) sociocultural forces, (3) economic forces, (4) technological forces, (5) competitive forces, and (6) regulatory forces A Marketing Environmental Scan use this knowledge to ensure that their goods, services, and ideas are relevant and meaningful the process of continually acquiring information on events occurring outside an organization to identify trends and pinpoint opportunities and threats to a business A SWOT analysis assessing an organization's internal strengths and weaknesses; external opportunities and threats; in relation to the industry, its competitors, and trends identified in an environmental scan
3
Demographic Forces statistical study of populations; gender, age, ethnicity, income, education, and occupation of a group of people; can access demographic information through Statistics Canada or through their own surveys and databases of information Statistics Canada provides demographic data through its census information Currently available data (2006) shows that the Canadian population is growing older, contains diverse generations, is settling in the suburbs of large cities, is becoming more ethnically mixed (see Figure 2–1), and is increasingly living in nontraditional families An Aging Population Canada is populated by approximately 31.6 million people; 1.7 percent, are between the ages of 55 and 64; over the age of 65 also continues to increase due to low birth rates and better health care; now represents 13.7 percent of the population; higher proportion of seniors who require different goods and services; People over the age of 50 control 75 percent of the net worth of Canadian households; an opportunity for business growth likely to spend its resources on travel and electronics and channels funds toward healthrelated products Tylenol is an example of a health care brand specifically addressing the aging population; arthritis is becoming more prevalent due to the aging population; developed Tylenol Arthritis Pain to help relieve pain symptoms; advertises this product in magazines such as CAA Magazine Diverse Generations four main generational groups of consumers baby boomers, Generation X, Generation Y (also known as Millennials), and Generation Z (the Net Generation) Baby boomers are the main reason for the greying of North America; people born between 1946 and 1964 had an average of 4 children; accounts for approximately 60 percent of expenditures; currently redefining the; concept of aging with a keen interest in health, selfimage, and retirement antiwrinkle creams and greyhair products, luxury educational vacations for the aging boomers with high levels of disposable income; increasingly using digital technology to communicate with others and research products eMarketer reported a surge in baby boomers' social media usage; jump of 15 percent; 46 percent of baby boomers now maintaining a profile on social networks Generation X is the group of people born after the baby boomers, between 1965 and 1974 3.9 million; 12 percent of the population; they are not as brand loyal and tend to be more selfreliant, entrepreneurial, and better educated; less prone to materialism and extravagance than the baby boomers; key influence in the market Generation Y is the group of people born between 1975 and 1991 children of baby boomers; referred to as the echo boom or millennials; 8.7 million; account for 27.5 percent of the Canadian population; Music, video games, sports, and computer purchases; expected to become as influential as their babyboom parents Generation Z is the group of people born between 1992 and 2010
4
grown up with the Internet; pioneers of social media; most disruptive of the generations; net generation; avid users of social media, very objective in their purchases, and not very brand loyal; discoverers and creators of content that they readily critique and share with others. Baby Boomers Flock to Social Media Baby boomers Anderson Analytics Usage and Attitude study boomers are comfortable in the online environment use social networks to connect with others 46 percent of baby boomers have a profile on a social network half of baby boomers claim their purchase decisions are influenced by a brand's online presence and yet they do not readily befriend brands on social networks can become vocal about either positive or negative experiences with a brand can be nurtured by marketers to help informally spread positive brand messages in the online environment Generations X and Y are more apt to use a social network than baby boomers, with 77 percent of young people between the ages of 14 and 28 using social networks boomers have the money; are the spine of Canadian consumer culture; born in the years following World War II—1946 through 1964—represent the bulk of the country's money and buying power Canadians aged 44 years and older control more than 77 percent of the country's wealth 73 percent have a household income over $100,000, with 83 percent having securities surpassing $500,000 Big City Dwelling Canada one of the most urbanized nations in the world 2006 more than 80 percent of Canadians lived in urban areas or their suburbs cities are growing much faster than rural areas; overall population of Canada grew by 5.4 percent six urban areas in Canada with populations over one million people: Toronto, Montreal, Vancouver, OttawaGatineau, Calgary, and Edmonton city centres are growing more slowly than the suburbs; cities with the highest growth rates were Barrie, Ontario, at 19.2 percent, and Calgary, Alberta, at 13.4 percent Population declines were seen in Saint John, New Brunswick, and Saguenay, Quebec Ethnic Diversity twothirds of the nation's growth between 2001 and 2006 was due to immigration most new immigrants coming from Asia (58 percent) one in five people citing their mother tongue as neither English nor French Other than English or French, the top two languages used at home were the Chinese languages and Punjabi Visible minorities now make up 50 percent of the population in large urban areas; have their own particular interests and habits, which can be addressed in unique ways Rogers Communications; offering a diverse list of foreignbased TV stations to people World Markets
5
world population is showing growth in underdeveloped areas such as Africa, Asia, and India represent future opportunities for marketers seeking to expand into foreign markets sheer size of these countries presents an opportunity increasingly easy due to the global appeal of the Internet, which allows companies to target foreign markets through online communication tools. NonTraditional Families traditional nuclear family of two parents and two children has changed over time size has decreased with families having one or two children more commonlaw relationships, singleparent families, and blended families samesex marriages impacts marketers who need to determine whether these new trends will affect their markets DeBeers Canada took these societal changes and used them as an opportunity to develop products that address evolving needs; market its diamond engagement rings to traditional groups; expanded into diamond pendants; anniversary bands; developed a celebratory threestone ring to symbolize the past, the present, and the future SocioCultural Forces more difficult to pinpoint than demographic not easy to identify societal and cultural shifts in attitudes tend to be gradual, over a prolonged period of time, and sometimes very subtle Statistical data is not as readily available in these areas sociocultural forces, we are referring to cultural values, ideas, and attitudes that are learned and shared among a group of people includes society's morals and beliefs Canadians are known to be trustworthy, family oriented, worldly, organized, reliable, socially conscious, and conservative Canadian society is tolerant of different cultural beliefs; welcomes new ideas and perspectives; and values honesty, integrity, fairness, and hard work Media Usage media landscape is blurring, making marketing communications more complex and challenging Magazines and newspapers now use websites to stream video clips online, while TV news programs have their own websites that post written articles influencing how consumers interact with each other, gather information, and stay informed devices are making the media accessible at all times whether this is at home, in the workplace, or outofhome This multiplatform media landscape is resulting in sociocultural changes that see consumers in control of a diverse set of tools to access the media and communicate with each other; leaves a fragmented media landscape for marketers who find that
6
consumers, spread across multiple platforms and media outlets, are more elusive and difficult to reach once marketing communications might have relied on a mass market TV or print campaign, marketers now reach beyond these forms of media into other channels to match the current media habits of target markets online platforms one of the building blocks of communication campaigns using carefully designed microsites, online ads, and creative social media tactics to engage consumers widespread use of social media is impacting the sociocultural environment in Canada and providing new communication platforms for m Creativity has become a prime ingredient in the social media space used by marketers to captivate individuals and engage in conversations that help build business Food Consumption Canadian Food Trends to 202018 outlines food consumption trends over the next few years will continue to demand highquality foods that balance good taste with nutrition and convenience fresh and nutritious foods that offer good value and choice Ethnic foods wide variety of international meals from friends, families, restaurants, and multicultural communities Marketers note these trends and develop products geared to evolving palates Patak's markets a full line of Indian sauces in mainstream supermarkets, and Club House with their spice line, Seasoning Blends, that includes Thai, Greek, Cajun, and Indian Masala spices. Canada's aging population, shrinking household size, and high incidence of dualincome parents that balance work and family is impacting food consumption patterns. away from raw ingredients toward preprepared foods replacing traditional mealtimes with snacking occasions consuming more and more meals onthego SupperWorks new food concept prompted by changing food consumption trends growing trend also lies with meatless meals, organic offerings, local produce, and small indulgent gourmet brands that are expected to exhibit slight increases over the next few years Food safety and healthrelated food issues are expected to pepper the media from time to time Canadian Food Trends to 2020 points food marketers toward a continued interest in trans fats, low sodium/sugar products, healthy carbohydrates, highfibre offerings, allergy identification, and foods that help prevent disease Health and Fitness
7
healthier products and new ideas that address concerns around obesity and its associated medical conditions—diabetes and cardiovascular disease such as the food industry, pharmaceutical business, fitness industry, entertainment world, and toy market Starbucks; Tazo fullleaf tea made from natural botanicals and spices Aquafina Plus; bottled water line that is fortified with vitamins Fontaine Santé; selling dips such as hummus, bruschetta, and spinach in mainstream supermarkets with products that are 100 percent natural, are good sources of omega 3s, and contain no trans fats or preservatives Even wellestablished products with less healthy images such as chocolate bars, chips, and carbonated beverages are addressing health concerns by introducing smaller portion sizes and lower calorie offerings Canadian Children's Food and Beverage Advertising Initiative (CAI) voluntarily created by 19 of Canada's largest food and beverage companies to restrict children's advertising messages to healthy choices all participants agreed to either eliminate all advertising to children under the age of 12, or to restrict it to betterforyou products steer children away from junkfood products and help them make healthier food choice Environmental Awareness Canadian Tire has its Smart Energy Solutions program focused on helping homeowners save electricity and reduce pollution. Sunlight has plantbased detergents SunChips have biodegradable chip bags Chevy Volt has an electric car electricity companies market offpeak energysaving rates and tips to encourage reduced energy consumption attitudes to green products waver over time and can vary from being highly engaged to being moderately interested journal of Personality and Social Psychology; indicates that consumers often balance green living with more wasteful purchases and buy highprofile green products such as hybrid or electric cars to make public statements about their beliefs, purchasing less environmentally friendly products in less public circumstances; criticized for greenwashing; paint themselves and their products as “environmentally friendly; market more products and to gain positive publicity Evolving Gender Roles women are working fulltime and men are becoming more involved in household duties resulted in dualincome families that are timestarved convenience products and better services to help busy families flexible hours for employees and the continued growth of the home office offering prepared foods and expanded areas that merchandise these item delivering food to help timestarved families providing daycare centres and before and afterschool programs to assist working parents
8
Economic Forces The economy is another area in a marketing environmental scan that marketers need to note household's income and ability to purchase economic downturn, the automotive sector is one of the first industries to suffer recession of 2009 saw new car purchases in Canada fall by 15 percent versus the previous year with people moving to used car sales to save money In the U.S., where the 2009 recession was more severe, new car sales for this same period dropped 30 percent, pushing the industry into governmentsupported bankruptcy protection.22 RBC's Blue Water Project Makes Waves tenyear initiative that channels $50 million to nonprofit organizations apply and qualify to protect bodies of freshwate named one of Canada's Greenest Employers and one of Canada's 50 Most Socially Responsible Corporations Project 13Tides Canada protects the Canadian Great Bear Rainforest in British Columbia accounts for 25 percent of the world's current ancient coastal temperate rain forests and is an economic and cultural resource for B.C.'s First Nations communities protects five million acres of this rain forest Project 20National Geographic raises awareness of water conservation issues in the U.S spotlight on water depletion at its largest water reservoir, Lake Mead supplies water to Las Vegas, Los Angeles, as well as farms in Arizona and California increased water usage in the area has resulted in a drop in water levels by over 100 fee covers a 10year period and extends to many parts of the world has pledged over $28 million to more than 380 organizations with $50 million earmarked for its projects telling the world about the Blue Water Project through a series of short documentaries that profile select projects as well as a fulllength documentary Marketers need to recognize how the economy affects the purchase behaviour economy consists of macroeconomic forces and microeconomic forces Macroeconomic forces refer to the state of a country's economy as a whole; key economic indicators are its inflation rate, its unemployment rate, and its economic growth rate Consumer confidence is also an important indicator of the economy's health how people feel about their longterm economic prospects inflation; if prices rise faster than consumer income, consumer purchasing power decreases recession; slow economic activity with two consecutive periods of negative growth production levels decline unemployment levels rise; consumers have less money to spend; focus their spending on life's necessities
9
business cycle fluctuates between different levels of growth depending on the state of the economy international economic factors, and global pressures Organisation for Economic Cooperation and Development (OECD) Canada: relatively strong due to its strength in productivity, investment levels, the Canadian dollar, and technological advance Canada's economy outperformed most nations during the 2009 recession and 2010 recovery Microeconomic forces supply and demand of goods and services, how this is impacted by individual, household, and company decisions to purchase Disposable income: This is the aftertax income that consumers have left for spending and savings. Typical purchases are for rent, clothing, and transportation. If taxes rise at a faster rate than income, consumers have less disposable income with which to pay the bills. Technological Forces Technological forces refer to inventions or innovations that stem from scientific or engineering research need to be aware of technological changes to ensure that their products do not become obsolete latest research on Canadians Canadians are very comfortable with the latest communication technology. 2010 Bensimon Byrne Consumerology Report, Technology and Canadian Consumers, tracks how consumers use and integrate technology into their lives only 10 percent feeling very lost; 40 percent of Canadians are comfortable Computers and the Internet are essential tools today; 74 percent of respondents consider desktop computers essential with 83 percent seeing highspeed Internet as a necessity 62 percent of people in Canada are on a computer or smartphone while watching TV Computers are the screen of choice for going online most popular online activities are checking the news, going on Facebook, and reading printed news 2011 comScore study Canadians lead the world in the use of tablet computers Cloud computing refers to the ability to access and use programs on the Internet without owning the software Google Docs for word processing, Blogger for blog creation, Google Analytics for online measurement, and Facebook, YouTube, and Twitter to share videos, photos, or links will raise issues related to website reliability, security, privacy, and content ownership most recent technological advances Competitive Forces competitive forces that present alternative products to satisfy a need
10
Large organizations often purchase research data; Nielsen Company; obtain competitive market share data identify general industry trends or market growth patterns Smaller companies; competitive information gleaned from salespeople, suppliers, retailers, and online research marketer's primary concerns; monitor the competitive activity of products that compete headtohead with its brands; headtohead competitors are called direct competitors and refer to very similar products sold in the same category Coke versus Pepsi consumers do not function in a vacuum and often make choices between products that do not directly compete in the same category therefore also look (a little less intently) at indirect competitors, those products that compete for the same buying dollar but in a slightly different category need to be intimately familiar with competitive products and try to anticipate competitive moves help avoid the pitfalls that can surface from underestimating the competition marketer needs to review all major competitors need to have a clear understanding of the competitive nature of the industry in which they function and factor this into a marketing environmental scan there are very few competitors, a marketer will consider changes among competitors to be significant situation where numerous competitors and undifferentiated products exist, changes may be viewed differently A monopoly exists when there is only one company selling in the market legal in Canada are carefully monitored by the Competition Bureau govt: actively seek to reduce their control of the market through regulation and by encouraging competition monopolies in Canada; regional electricity companies oligopoly, which occurs when a few companies control a market oil companies that control the gasoline industry there is limited competition can easily control prices and are often criticized for price collusion fixing prices among competitors Marketers who function in an oligopoly need to be acutely aware of competitive moves and particularly changes in price monopolistic competition. This is when a large number of sellers compete with each other, offering customers similar or substitute products branding plays an important role as does product differentiation and addedvalue activities to draw consumers to the product touch with consumer needs adjusting the marketing mix to meet these needs is crucial for longterm survival
11
perfect competition when there are many sellers with nearly identical products and little differentiation grains, vegetables, or coal, marketers need to know that pricing plays a key role in securing business focus will be on cost reduction in every element of the business Regulatory Forces regulations, which are restrictions placed on marketing practices by different levels of government and industry associations protect consumers from unscrupulous business practices set acceptable standards of practice encourage fair competition clearly understand all legal and ethical guidelines that affect their business practices and to retain legal guidance as needed to ensure that its practices are legal Competition Bureau, Advertising Standards Canada (ASC), the Canadian Radiotelevision and Telecommunications Commission (CRTC), the Better Business Bureau (BBB), and the Canadian Marketing Association (CMA) Competition Bureau administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act,; promote and maintain fair competition; curtail false and; misleading representations; Prohibited business practices include price fixing among competitors predatory pricing by large competitors to run small companies out of business bidrigging among competitors to inflate prices on government contracts Prohibited practices to lure consumers include baitandswitch advertising fraudulent advertising claims misleading pricing practices such as double ticketing Baitandswitch advertising fines and jail time companies to publish corrective notices, stop the prohibited practice, pay administrative costs, and pay restitution to purchasers fines reach as high as $1 million for individuals and $15 million for corporations DataCom Marketing Inc; fraudulently selling business directories; $15 million fine Advertising Standards Canada (ASC) selfregulatory nongovernment association run by advertising, media, and marketing professionals with the purpose of setting and regulating standards of professional practice in the advertising industry sets and regulates advertising guidelines, monitored through a consumer complaint process does not levy fines or engage in legal proceedings relies on industry compliance to ensure that ads contravening its guidelines, the Canadian Code of Advertising Standards (or the Code) cease to air
12
Deceptive and fraudulent advertising, although covered under the Code, is also scrutinized by the Competition Bureau, which can levy fines and take legal action if necessary. The Code strict set of guidelines designed to encourage truthful, fair, and accurate marketing communications address issues such as comparative advertising, accuracy, safety, decency, and advertising to children The Canadian Radiotelevision and Telecommunications Commission (CRTC) sets guidelines and enforces a clear set of regulations on Canadian businesses Broadcasting Act/ Telecommunications Act ensure that monopolies do not exist approves broadcast licences for TV and radio stations sets the number of minutes does not directly regulate the content of ads does oversee the advertising of alcohol beverages and works with the ASC on issues related to advertising to childre regulates the amount of advertising permitted in the Canadian broadcast media has jurisdiction over the telemarketing national Do Not Call List (DNCL). The DNCL gives consumers the ability to not receive telemarketing calls on cellphones, landline phones, and fax machines by registering the numbers of their communication devices keeps these numbers in the DNCL for five years Telemarketers are required by law to subscribe to the DNCL and to not call the numbers in its database five exemptions to the DNCL: registered charities, newspaper subscriptions, political parties/candidates, marketresearch companies, and companies with which business has been conducted in the last 18 months fines of up to $1,500 for an individual and up to $15,000 for a corporation 2010, Bell Canada was fined $1.3 million for violating the DNCL through thirdparty independent telemarketers who contacted people on the DNCL to promote Bell Canada's TV, telephone, wireless, and Internet services CRTC currently restricts TV advertising to the following 12 minutes per hour on specialty channels No advertising on paytelevision, payperview, and videoondemand channels No limits on AM and FM radio stations No limits on regular TV stations No advertising on CBC radio networks except for programs that are available only on a sponsored basis focus on EthicsAdvertising Junk Food to Kids: The Children's Advertising Initiative I community concerns about childhood obesity and the health of children in Canada voluntary association to help promote healthy eating among children in Canada Children's Food and Beverage Advertising
13
promotes healthy lifestyle and dietary choices for children under 12 years of age Ten of the participating companies Burger King, Campbell's, General Mills, Kellogg's, Kraft, McDonald's, Nestlé, Parmalat, Post, and Weston Bakeries nine companies involved in the initiative, Cadbury Adams, CocaCola, Ferrero, Hershey, Janes Family Foods, Mars, McCain, PepsiCo, and Unilever, have committed to not advertising their products to children under 12 years Better Business Bureau (BBB) voluntary alliance of businesses; committed to being fair and honest in their dealings; promoting selfregulatory practices; collecting and dispensing information; provides businesses with guidelines for building; trust in the marketplace; honestly representing products to be transparent, honour promises, and quickly respond to disputes in a professional manner and in good faith Canadian Marketing Association (CMA) backbone of the marketing industry in Canada; Code of Ethics and Standards of Practice; provides marketers with numerous practical guides on topics such as telemarketing, email marketing, Internet marketing, privacy compliance, promotional contests, fundraising, database marketing, and marketing to children and teenagers three important regulatory areas that are highlighted by the CMA: privacy, spam, and contests. Privacy 2004, privacy laws came into place across Canada in the form of the Personal Information Protection and Electronic Documents Act (PIPEDA), provides businesses and individuals with guidelines on what information can be collected, shared, and distributed protects personal informatio requires businesses to regularly review their privacy policies; appoint a privacy policy officer collect only necessary information consent is needed for the collection, use, and disclosure of information and that that information must be safely stored; Security breaches must be communicated to consumers Spam he dissemination of unsolicited electronic messages to recipients requires senders to identify themselves and the organization they represent and to send information only to those who have requested it Recipients need to be able to easily unsubscribe The revised legislation is expected to make electronic spam software illegal Contests encourage consumers to purchase products These laws fall under the criminal code, the Competition Act,
14
Quebec's Consumer Protection Act prohibits advertising to children under the age of 13 in Quebec, other than on instore displays, packaging, or in childspecific magazines. The Criminal Code states that “illegal lotteries,” where the winnings are based purely on chance, are prohibited unless for a government lottery or conducted under a charitable gaming licence. Contests that require a mix of chance and skill are legal, as well as pure skillbased contests. Penalties for contests contravening the Criminal Code include imprisonment for up to two years and a fine of up to $25,000. The Competition Act prohibits lotteries, contests, and games of chance unless there is adequate and fair disclosure of the rules, prizes, odds of winning, and allocation of prizes. All contest terms and conditions must be clear, visible, easy to read, easy to find, and easy to understand. They must include details on how to enter, age restrictions, contest entry limitations, contact information, geographic prize allocation, the odds of winning, the value and number of each prize, prize description, contest closing date, and clarification that no purchase is necessary The online environment complicates the administration of contests with the need to abide by privacy laws, security issues, and the possibility of technical glitches. Contests directed at children must adhere to further restrictions that are detailed in the CMA Guide to Promotional Contests. A Marketing Environmental Scan in Practice A marketing environmental scan is the process of continually acquiring information on events outside an organization to identify trends, opportunities, and threats. Demographics are the statistical study of populations, looking at characteristics such as gender, age, ethnicity, income, education, and occupation. Sociocultural forces look at cultural values, ideas, and attitudes as they relate to society's trends and beliefs. Economic forces are important in terms of a target market's disposable income, and the general health of the economy including consumer confidence. Technological forces relate to scientific inventions and innovations that may impact the running of a business and influence consumer behaviour and interactions. Competitive forces refer to direct and indirect competitors as well as the competitive nature of the market in which they function. Regulatory forces are the restrictions placed on a business, product, or service by the government or industry association. Economy: The collective income, expenditures, and resources that affect the cost of running a business or a household
15
Macroeconomic forces: The state of a country's economy as a whole as indicated by its growth rates, inflation rates, unemployment rates, and consumer confidence indexes Inflaton: A period when the cost to produce and buy products and services gets higher as prices rise Recession: A time of slow economic activity with two consecutive periods of negative growth Microeconomic Forces The supply and demand of goods and services and how this is impacted by individual, household, and company decisions to purchase Gross Income Total amount of money made in one year by a person, household, or family unit, including taxes Disposable Income: Balance of income left after paying taxes; income that is used for spending and savings Discretionary Income: Money that consumers have left after paying taxes and buying necessities Technological Forces Inventions from science or engineering research Do Not Call List (DNCL) ; Gives customers the ability to not receive telemarketing calls on cellphones, landline phones, and fax machines by registering the numbers of their communication devices Discretionary income; Money that consumers have left after paying taxes and buying necessities Disposable income;Balance of income left after paying taxes; income that is used for spending and savings Generation X Def: People born between 1965 and 1974 Generation Y Def: Also known as the millenials, people born between 1975 and 1991 Generation Z Def: Also known as the net generation, people born after 1992 monopoly Def: When only one company sells in a particular market oligopoly Def: Type of competition that occurs when a few companies control a market perfect competition Def: Type of competition where there are many sellers with nearly identical products and little differentiation
Chapter 2. The Marketing Environment focus on the marketing environment—the factors that marketers monitor to stay current and informed—and explain how these factors impact marketing decisions Dempster's breads Andrew Pollock, senior vice president of marketing at Canada Bread; Dempster's competes with instore bakeries offer freshly baked breads as well as prepackaged loaves that appear sidebyside on supermarket shelves must deliver the very best quality to really stand out in the marketplace Dempster's was started by the James Dempster bakery in the early 1900s; later purchased by Canada Bread and Maple Leaf Foods; Dempster's Smart bread, a highly successful brand developed to meet changing consumer needs; Smart bread has become an $80 million business for Canada Bread marketing of Smart bread marketing environment looks at demographic trends, sociocultural changes, the economic environment, the use of technology, the competitive nature of the market, and regulatory forces; considered the latest trends and concerns Sociocultural factors: understand consumers' food interests; families were experimenting with new food choices; wider assortment of multicultural dishes and ethnic foods; Society was also becoming more aware of the relationship between food,; nutrition, and health and looking for nutritious, easy, mealtime solutions; Nutrition and the environment were top concerns; were not always willing to pay a premium for these benefits; saw an opportunity in the health and nutrition area Demographic factors continued increases in singleparent families, timestarved parents, and an aging population that was educated and knowledgeable; opportunity to help busy families make informed decisions on nutritious food choices; make mealplanning easier Its target market consisted (1) dualincome soccer moms, which are timestarved parents looking for ideas on quick and nutritious tasty meals; (2) nofrills families, people who watch their pennies and want affordable nutritious foods; (3) healthy foodies, adults who love food and are focused on health and nutrition; and (4) privatelabel pensioners, older adults who are pricesensitive and see bread as a functional food. dualincome soccer moms and nofrills families had the strongest business potential Economic factors: bread is recessionproof; uncertain economic times people buy bread more than ever; choose to bring sandwiches to work; demand for quality breads was strong in the current economic climate Technological factors: target markets were at ease with the Internet; should continue to integrate online approaches into communication programs
2
Competitive factors: strong branded presence in the retail industry; seen as a topquality brand competing headon with brands such as Wonder Bread and D'Italiano Regulatory factors: ensure that all products meet government guidelines for health and safety; The Canadian Food Inspection Agency adds another level of complexity, vetoing the use of certain ingredients and manufacturing practices unless they fall within approved guidelines; realized that working within these regulations is a necessary but a timeconsuming challenge looked at these areas of the marketing environment and saw substantial business opportunities in a softtextured, morenutritious white bread; almost a third of current white bread purchasers would buy such a product as long as it had the same soft texture and appearance as their regular white bread; created product prototypes; fielded consumer research to select a winning formulation; blend of whole grain and white flour was selected knew it could not make overt health claims; relied on the product name and subtle claims positioned Smart bread to appeal to consumer needs for a softtextured, nutritious family bread that is fun for kids (influencers in the category); cleverly emphasized the product benefit; created a superhero mascot, Smartman; mascot could distinguish the brand and make emotional connections with kids; differentiated the brand and made a bold statement in the category; mascot makes appearances at store openings and during instore promotional events The Marketing Environment A marketing environmental scan helps marketers identify what changes affect their consumers take this approach and scan the elements of the marketing environment to identify business opportunities integrate sound business ideas into marketing plans that provide direction for the business use this approach to stay apprised of changes monitor the marketing environment with a view to capitalizing on new opportunities and curtailing potential threats marketers scan the marketing environment and review six key areas of focus: (1) demographic forces, (2) sociocultural forces, (3) economic forces, (4) technological forces, (5) competitive forces, and (6) regulatory forces A Marketing Environmental Scan use this knowledge to ensure that their goods, services, and ideas are relevant and meaningful the process of continually acquiring information on events occurring outside an organization to identify trends and pinpoint opportunities and threats to a business A SWOT analysis assessing an organization's internal strengths and weaknesses; external opportunities and threats; in relation to the industry, its competitors, and trends identified in an environmental scan
3
Demographic Forces statistical study of populations; gender, age, ethnicity, income, education, and occupation of a group of people; can access demographic information through Statistics Canada or through their own surveys and databases of information Statistics Canada provides demographic data through its census information Currently available data (2006) shows that the Canadian population is growing older, contains diverse generations, is settling in the suburbs of large cities, is becoming more ethnically mixed (see Figure 2–1), and is increasingly living in nontraditional families An Aging Population Canada is populated by approximately 31.6 million people; 1.7 percent, are between the ages of 55 and 64; over the age of 65 also continues to increase due to low birth rates and better health care; now represents 13.7 percent of the population; higher proportion of seniors who require different goods and services; People over the age of 50 control 75 percent of the net worth of Canadian households; an opportunity for business growth likely to spend its resources on travel and electronics and channels funds toward healthrelated products Tylenol is an example of a health care brand specifically addressing the aging population; arthritis is becoming more prevalent due to the aging population; developed Tylenol Arthritis Pain to help relieve pain symptoms; advertises this product in magazines such as CAA Magazine Diverse Generations four main generational groups of consumers baby boomers, Generation X, Generation Y (also known as Millennials), and Generation Z (the Net Generation) Baby boomers are the main reason for the greying of North America; people born between 1946 and 1964 had an average of 4 children; accounts for approximately 60 percent of expenditures; currently redefining the; concept of aging with a keen interest in health, selfimage, and retirement antiwrinkle creams and greyhair products, luxury educational vacations for the aging boomers with high levels of disposable income; increasingly using digital technology to communicate with others and research products eMarketer reported a surge in baby boomers' social media usage; jump of 15 percent; 46 percent of baby boomers now maintaining a profile on social networks Generation X is the group of people born after the baby boomers, between 1965 and 1974 3.9 million; 12 percent of the population; they are not as brand loyal and tend to be more selfreliant, entrepreneurial, and better educated; less prone to materialism and extravagance than the baby boomers; key influence in the market Generation Y is the group of people born between 1975 and 1991 children of baby boomers; referred to as the echo boom or millennials; 8.7 million; account for 27.5 percent of the Canadian population; Music, video games, sports, and computer purchases; expected to become as influential as their babyboom parents Generation Z is the group of people born between 1992 and 2010
4
grown up with the Internet; pioneers of social media; most disruptive of the generations; net generation; avid users of social media, very objective in their purchases, and not very brand loyal; discoverers and creators of content that they readily critique and share with others. Baby Boomers Flock to Social Media Baby boomers Anderson Analytics Usage and Attitude study boomers are comfortable in the online environment use social networks to connect with others 46 percent of baby boomers have a profile on a social network half of baby boomers claim their purchase decisions are influenced by a brand's online presence and yet they do not readily befriend brands on social networks can become vocal about either positive or negative experiences with a brand can be nurtured by marketers to help informally spread positive brand messages in the online environment Generations X and Y are more apt to use a social network than baby boomers, with 77 percent of young people between the ages of 14 and 28 using social networks boomers have the money; are the spine of Canadian consumer culture; born in the years following World War II—1946 through 1964—represent the bulk of the country's money and buying power Canadians aged 44 years and older control more than 77 percent of the country's wealth 73 percent have a household income over $100,000, with 83 percent having securities surpassing $500,000 Big City Dwelling Canada one of the most urbanized nations in the world 2006 more than 80 percent of Canadians lived in urban areas or their suburbs cities are growing much faster than rural areas; overall population of Canada grew by 5.4 percent six urban areas in Canada with populations over one million people: Toronto, Montreal, Vancouver, OttawaGatineau, Calgary, and Edmonton city centres are growing more slowly than the suburbs; cities with the highest growth rates were Barrie, Ontario, at 19.2 percent, and Calgary, Alberta, at 13.4 percent Population declines were seen in Saint John, New Brunswick, and Saguenay, Quebec Ethnic Diversity twothirds of the nation's growth between 2001 and 2006 was due to immigration most new immigrants coming from Asia (58 percent) one in five people citing their mother tongue as neither English nor French Other than English or French, the top two languages used at home were the Chinese languages and Punjabi Visible minorities now make up 50 percent of the population in large urban areas; have their own particular interests and habits, which can be addressed in unique ways Rogers Communications; offering a diverse list of foreignbased TV stations to people World Markets
5
world population is showing growth in underdeveloped areas such as Africa, Asia, and India represent future opportunities for marketers seeking to expand into foreign markets sheer size of these countries presents an opportunity increasingly easy due to the global appeal of the Internet, which allows companies to target foreign markets through online communication tools. NonTraditional Families traditional nuclear family of two parents and two children has changed over time size has decreased with families having one or two children more commonlaw relationships, singleparent families, and blended families samesex marriages impacts marketers who need to determine whether these new trends will affect their markets DeBeers Canada took these societal changes and used them as an opportunity to develop products that address evolving needs; market its diamond engagement rings to traditional groups; expanded into diamond pendants; anniversary bands; developed a celebratory threestone ring to symbolize the past, the present, and the future SocioCultural Forces more difficult to pinpoint than demographic not easy to identify societal and cultural shifts in attitudes tend to be gradual, over a prolonged period of time, and sometimes very subtle Statistical data is not as readily available in these areas sociocultural forces, we are referring to cultural values, ideas, and attitudes that are learned and shared among a group of people includes society's morals and beliefs Canadians are known to be trustworthy, family oriented, worldly, organized, reliable, socially conscious, and conservative Canadian society is tolerant of different cultural beliefs; welcomes new ideas and perspectives; and values honesty, integrity, fairness, and hard work Media Usage media landscape is blurring, making marketing communications more complex and challenging Magazines and newspapers now use websites to stream video clips online, while TV news programs have their own websites that post written articles influencing how consumers interact with each other, gather information, and stay informed devices are making the media accessible at all times whether this is at home, in the workplace, or outofhome This multiplatform media landscape is resulting in sociocultural changes that see consumers in control of a diverse set of tools to access the media and communicate with each other; leaves a fragmented media landscape for marketers who find that
6
consumers, spread across multiple platforms and media outlets, are more elusive and difficult to reach once marketing communications might have relied on a mass market TV or print campaign, marketers now reach beyond these forms of media into other channels to match the current media habits of target markets online platforms one of the building blocks of communication campaigns using carefully designed microsites, online ads, and creative social media tactics to engage consumers widespread use of social media is impacting the sociocultural environment in Canada and providing new communication platforms for m Creativity has become a prime ingredient in the social media space used by marketers to captivate individuals and engage in conversations that help build business Food Consumption Canadian Food Trends to 202018 outlines food consumption trends over the next few years will continue to demand highquality foods that balance good taste with nutrition and convenience fresh and nutritious foods that offer good value and choice Ethnic foods wide variety of international meals from friends, families, restaurants, and multicultural communities Marketers note these trends and develop products geared to evolving palates Patak's markets a full line of Indian sauces in mainstream supermarkets, and Club House with their spice line, Seasoning Blends, that includes Thai, Greek, Cajun, and Indian Masala spices. Canada's aging population, shrinking household size, and high incidence of dualincome parents that balance work and family is impacting food consumption patterns. away from raw ingredients toward preprepared foods replacing traditional mealtimes with snacking occasions consuming more and more meals onthego SupperWorks new food concept prompted by changing food consumption trends growing trend also lies with meatless meals, organic offerings, local produce, and small indulgent gourmet brands that are expected to exhibit slight increases over the next few years Food safety and healthrelated food issues are expected to pepper the media from time to time Canadian Food Trends to 2020 points food marketers toward a continued interest in trans fats, low sodium/sugar products, healthy carbohydrates, highfibre offerings, allergy identification, and foods that help prevent disease Health and Fitness
7
healthier products and new ideas that address concerns around obesity and its associated medical conditions—diabetes and cardiovascular disease such as the food industry, pharmaceutical business, fitness industry, entertainment world, and toy market Starbucks; Tazo fullleaf tea made from natural botanicals and spices Aquafina Plus; bottled water line that is fortified with vitamins Fontaine Santé; selling dips such as hummus, bruschetta, and spinach in mainstream supermarkets with products that are 100 percent natural, are good sources of omega 3s, and contain no trans fats or preservatives Even wellestablished products with less healthy images such as chocolate bars, chips, and carbonated beverages are addressing health concerns by introducing smaller portion sizes and lower calorie offerings Canadian Children's Food and Beverage Advertising Initiative (CAI) voluntarily created by 19 of Canada's largest food and beverage companies to restrict children's advertising messages to healthy choices all participants agreed to either eliminate all advertising to children under the age of 12, or to restrict it to betterforyou products steer children away from junkfood products and help them make healthier food choice Environmental Awareness Canadian Tire has its Smart Energy Solutions program focused on helping homeowners save electricity and reduce pollution. Sunlight has plantbased detergents SunChips have biodegradable chip bags Chevy Volt has an electric car electricity companies market offpeak energysaving rates and tips to encourage reduced energy consumption attitudes to green products waver over time and can vary from being highly engaged to being moderately interested journal of Personality and Social Psychology; indicates that consumers often balance green living with more wasteful purchases and buy highprofile green products such as hybrid or electric cars to make public statements about their beliefs, purchasing less environmentally friendly products in less public circumstances; criticized for greenwashing; paint themselves and their products as “environmentally friendly; market more products and to gain positive publicity Evolving Gender Roles women are working fulltime and men are becoming more involved in household duties resulted in dualincome families that are timestarved convenience products and better services to help busy families flexible hours for employees and the continued growth of the home office offering prepared foods and expanded areas that merchandise these item delivering food to help timestarved families providing daycare centres and before and afterschool programs to assist working parents
8
Economic Forces The economy is another area in a marketing environmental scan that marketers need to note household's income and ability to purchase economic downturn, the automotive sector is one of the first industries to suffer recession of 2009 saw new car purchases in Canada fall by 15 percent versus the previous year with people moving to used car sales to save money In the U.S., where the 2009 recession was more severe, new car sales for this same period dropped 30 percent, pushing the industry into governmentsupported bankruptcy protection.22 RBC's Blue Water Project Makes Waves tenyear initiative that channels $50 million to nonprofit organizations apply and qualify to protect bodies of freshwate named one of Canada's Greenest Employers and one of Canada's 50 Most Socially Responsible Corporations Project 13Tides Canada protects the Canadian Great Bear Rainforest in British Columbia accounts for 25 percent of the world's current ancient coastal temperate rain forests and is an economic and cultural resource for B.C.'s First Nations communities protects five million acres of this rain forest Project 20National Geographic raises awareness of water conservation issues in the U.S spotlight on water depletion at its largest water reservoir, Lake Mead supplies water to Las Vegas, Los Angeles, as well as farms in Arizona and California increased water usage in the area has resulted in a drop in water levels by over 100 fee covers a 10year period and extends to many parts of the world has pledged over $28 million to more than 380 organizations with $50 million earmarked for its projects telling the world about the Blue Water Project through a series of short documentaries that profile select projects as well as a fulllength documentary Marketers need to recognize how the economy affects the purchase behaviour economy consists of macroeconomic forces and microeconomic forces Macroeconomic forces refer to the state of a country's economy as a whole; key economic indicators are its inflation rate, its unemployment rate, and its economic growth rate Consumer confidence is also an important indicator of the economy's health how people feel about their longterm economic prospects inflation; if prices rise faster than consumer income, consumer purchasing power decreases recession; slow economic activity with two consecutive periods of negative growth production levels decline unemployment levels rise; consumers have less money to spend; focus their spending on life's necessities
9
business cycle fluctuates between different levels of growth depending on the state of the economy international economic factors, and global pressures Organisation for Economic Cooperation and Development (OECD) Canada: relatively strong due to its strength in productivity, investment levels, the Canadian dollar, and technological advance Canada's economy outperformed most nations during the 2009 recession and 2010 recovery Microeconomic forces supply and demand of goods and services, how this is impacted by individual, household, and company decisions to purchase Disposable income: This is the aftertax income that consumers have left for spending and savings. Typical purchases are for rent, clothing, and transportation. If taxes rise at a faster rate than income, consumers have less disposable income with which to pay the bills. Technological Forces Technological forces refer to inventions or innovations that stem from scientific or engineering research need to be aware of technological changes to ensure that their products do not become obsolete latest research on Canadians Canadians are very comfortable with the latest communication technology. 2010 Bensimon Byrne Consumerology Report, Technology and Canadian Consumers, tracks how consumers use and integrate technology into their lives only 10 percent feeling very lost; 40 percent of Canadians are comfortable Computers and the Internet are essential tools today; 74 percent of respondents consider desktop computers essential with 83 percent seeing highspeed Internet as a necessity 62 percent of people in Canada are on a computer or smartphone while watching TV Computers are the screen of choice for going online most popular online activities are checking the news, going on Facebook, and reading printed news 2011 comScore study Canadians lead the world in the use of tablet computers Cloud computing refers to the ability to access and use programs on the Internet without owning the software Google Docs for word processing, Blogger for blog creation, Google Analytics for online measurement, and Facebook, YouTube, and Twitter to share videos, photos, or links will raise issues related to website reliability, security, privacy, and content ownership most recent technological advances Competitive Forces competitive forces that present alternative products to satisfy a need
10
Large organizations often purchase research data; Nielsen Company; obtain competitive market share data identify general industry trends or market growth patterns Smaller companies; competitive information gleaned from salespeople, suppliers, retailers, and online research marketer's primary concerns; monitor the competitive activity of products that compete headtohead with its brands; headtohead competitors are called direct competitors and refer to very similar products sold in the same category Coke versus Pepsi consumers do not function in a vacuum and often make choices between products that do not directly compete in the same category therefore also look (a little less intently) at indirect competitors, those products that compete for the same buying dollar but in a slightly different category need to be intimately familiar with competitive products and try to anticipate competitive moves help avoid the pitfalls that can surface from underestimating the competition marketer needs to review all major competitors need to have a clear understanding of the competitive nature of the industry in which they function and factor this into a marketing environmental scan there are very few competitors, a marketer will consider changes among competitors to be significant situation where numerous competitors and undifferentiated products exist, changes may be viewed differently A monopoly exists when there is only one company selling in the market legal in Canada are carefully monitored by the Competition Bureau govt: actively seek to reduce their control of the market through regulation and by encouraging competition monopolies in Canada; regional electricity companies oligopoly, which occurs when a few companies control a market oil companies that control the gasoline industry there is limited competition can easily control prices and are often criticized for price collusion fixing prices among competitors Marketers who function in an oligopoly need to be acutely aware of competitive moves and particularly changes in price monopolistic competition. This is when a large number of sellers compete with each other, offering customers similar or substitute products branding plays an important role as does product differentiation and addedvalue activities to draw consumers to the product touch with consumer needs adjusting the marketing mix to meet these needs is crucial for longterm survival
11
perfect competition when there are many sellers with nearly identical products and little differentiation grains, vegetables, or coal, marketers need to know that pricing plays a key role in securing business focus will be on cost reduction in every element of the business Regulatory Forces regulations, which are restrictions placed on marketing practices by different levels of government and industry associations protect consumers from unscrupulous business practices set acceptable standards of practice encourage fair competition clearly understand all legal and ethical guidelines that affect their business practices and to retain legal guidance as needed to ensure that its practices are legal Competition Bureau, Advertising Standards Canada (ASC), the Canadian Radiotelevision and Telecommunications Commission (CRTC), the Better Business Bureau (BBB), and the Canadian Marketing Association (CMA) Competition Bureau administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act,; promote and maintain fair competition; curtail false and; misleading representations; Prohibited business practices include price fixing among competitors predatory pricing by large competitors to run small companies out of business bidrigging among competitors to inflate prices on government contracts Prohibited practices to lure consumers include baitandswitch advertising fraudulent advertising claims misleading pricing practices such as double ticketing Baitandswitch advertising fines and jail time companies to publish corrective notices, stop the prohibited practice, pay administrative costs, and pay restitution to purchasers fines reach as high as $1 million for individuals and $15 million for corporations DataCom Marketing Inc; fraudulently selling business directories; $15 million fine Advertising Standards Canada (ASC) selfregulatory nongovernment association run by advertising, media, and marketing professionals with the purpose of setting and regulating standards of professional practice in the advertising industry sets and regulates advertising guidelines, monitored through a consumer complaint process does not levy fines or engage in legal proceedings relies on industry compliance to ensure that ads contravening its guidelines, the Canadian Code of Advertising Standards (or the Code) cease to air
12
Deceptive and fraudulent advertising, although covered under the Code, is also scrutinized by the Competition Bureau, which can levy fines and take legal action if necessary. The Code strict set of guidelines designed to encourage truthful, fair, and accurate marketing communications address issues such as comparative advertising, accuracy, safety, decency, and advertising to children The Canadian Radiotelevision and Telecommunications Commission (CRTC) sets guidelines and enforces a clear set of regulations on Canadian businesses Broadcasting Act/ Telecommunications Act ensure that monopolies do not exist approves broadcast licences for TV and radio stations sets the number of minutes does not directly regulate the content of ads does oversee the advertising of alcohol beverages and works with the ASC on issues related to advertising to childre regulates the amount of advertising permitted in the Canadian broadcast media has jurisdiction over the telemarketing national Do Not Call List (DNCL). The DNCL gives consumers the ability to not receive telemarketing calls on cellphones, landline phones, and fax machines by registering the numbers of their communication devices keeps these numbers in the DNCL for five years Telemarketers are required by law to subscribe to the DNCL and to not call the numbers in its database five exemptions to the DNCL: registered charities, newspaper subscriptions, political parties/candidates, marketresearch companies, and companies with which business has been conducted in the last 18 months fines of up to $1,500 for an individual and up to $15,000 for a corporation 2010, Bell Canada was fined $1.3 million for violating the DNCL through thirdparty independent telemarketers who contacted people on the DNCL to promote Bell Canada's TV, telephone, wireless, and Internet services CRTC currently restricts TV advertising to the following 12 minutes per hour on specialty channels No advertising on paytelevision, payperview, and videoondemand channels No limits on AM and FM radio stations No limits on regular TV stations No advertising on CBC radio networks except for programs that are available only on a sponsored basis focus on EthicsAdvertising Junk Food to Kids: The Children's Advertising Initiative I community concerns about childhood obesity and the health of children in Canada voluntary association to help promote healthy eating among children in Canada Children's Food and Beverage Advertising
13
promotes healthy lifestyle and dietary choices for children under 12 years of age Ten of the participating companies Burger King, Campbell's, General Mills, Kellogg's, Kraft, McDonald's, Nestlé, Parmalat, Post, and Weston Bakeries nine companies involved in the initiative, Cadbury Adams, CocaCola, Ferrero, Hershey, Janes Family Foods, Mars, McCain, PepsiCo, and Unilever, have committed to not advertising their products to children under 12 years Better Business Bureau (BBB) voluntary alliance of businesses; committed to being fair and honest in their dealings; promoting selfregulatory practices; collecting and dispensing information; provides businesses with guidelines for building; trust in the marketplace; honestly representing products to be transparent, honour promises, and quickly respond to disputes in a professional manner and in good faith Canadian Marketing Association (CMA) backbone of the marketing industry in Canada; Code of Ethics and Standards of Practice; provides marketers with numerous practical guides on topics such as telemarketing, email marketing, Internet marketing, privacy compliance, promotional contests, fundraising, database marketing, and marketing to children and teenagers three important regulatory areas that are highlighted by the CMA: privacy, spam, and contests. Privacy 2004, privacy laws came into place across Canada in the form of the Personal Information Protection and Electronic Documents Act (PIPEDA), provides businesses and individuals with guidelines on what information can be collected, shared, and distributed protects personal informatio requires businesses to regularly review their privacy policies; appoint a privacy policy officer collect only necessary information consent is needed for the collection, use, and disclosure of information and that that information must be safely stored; Security breaches must be communicated to consumers Spam he dissemination of unsolicited electronic messages to recipients requires senders to identify themselves and the organization they represent and to send information only to those who have requested it Recipients need to be able to easily unsubscribe The revised legislation is expected to make electronic spam software illegal Contests encourage consumers to purchase products These laws fall under the criminal code, the Competition Act,
14
Quebec's Consumer Protection Act prohibits advertising to children under the age of 13 in Quebec, other than on instore displays, packaging, or in childspecific magazines. The Criminal Code states that “illegal lotteries,” where the winnings are based purely on chance, are prohibited unless for a government lottery or conducted under a charitable gaming licence. Contests that require a mix of chance and skill are legal, as well as pure skillbased contests. Penalties for contests contravening the Criminal Code include imprisonment for up to two years and a fine of up to $25,000. The Competition Act prohibits lotteries, contests, and games of chance unless there is adequate and fair disclosure of the rules, prizes, odds of winning, and allocation of prizes. All contest terms and conditions must be clear, visible, easy to read, easy to find, and easy to understand. They must include details on how to enter, age restrictions, contest entry limitations, contact information, geographic prize allocation, the odds of winning, the value and number of each prize, prize description, contest closing date, and clarification that no purchase is necessary The online environment complicates the administration of contests with the need to abide by privacy laws, security issues, and the possibility of technical glitches. Contests directed at children must adhere to further restrictions that are detailed in the CMA Guide to Promotional Contests. A Marketing Environmental Scan in Practice A marketing environmental scan is the process of continually acquiring information on events outside an organization to identify trends, opportunities, and threats. Demographics are the statistical study of populations, looking at characteristics such as gender, age, ethnicity, income, education, and occupation. Sociocultural forces look at cultural values, ideas, and attitudes as they relate to society's trends and beliefs. Economic forces are important in terms of a target market's disposable income, and the general health of the economy including consumer confidence. Technological forces relate to scientific inventions and innovations that may impact the running of a business and influence consumer behaviour and interactions. Competitive forces refer to direct and indirect competitors as well as the competitive nature of the market in which they function. Regulatory forces are the restrictions placed on a business, product, or service by the government or industry association. Economy: The collective income, expenditures, and resources that affect the cost of running a business or a household
15
Macroeconomic forces: The state of a country's economy as a whole as indicated by its growth rates, inflation rates, unemployment rates, and consumer confidence indexes Inflaton: A period when the cost to produce and buy products and services gets higher as prices rise Recession: A time of slow economic activity with two consecutive periods of negative growth Microeconomic Forces The supply and demand of goods and services and how this is impacted by individual, household, and company decisions to purchase Gross Income Total amount of money made in one year by a person, household, or family unit, including taxes Disposable Income: Balance of income left after paying taxes; income that is used for spending and savings Discretionary Income: Money that consumers have left after paying taxes and buying necessities Technological Forces Inventions from science or engineering research Do Not Call List (DNCL) ; Gives customers the ability to not receive telemarketing calls on cellphones, landline phones, and fax machines by registering the numbers of their communication devices Discretionary income; Money that consumers have left after paying taxes and buying necessities Disposable income;Balance of income left after paying taxes; income that is used for spending and savings Generation X Def: People born between 1965 and 1974 Generation Y Def: Also known as the millenials, people born between 1975 and 1991 Generation Z Def: Also known as the net generation, people born after 1992 monopoly Def: When only one company sells in a particular market oligopoly Def: Type of competition that occurs when a few companies control a market perfect competition Def: Type of competition where there are many sellers with nearly identical products and little differentiation
