Module 4 - Environmental Analysis: Tools to Identify Attractive Markets Flashcards
What are the major problems in terms of the planet’s natural environment?
- Earth’s overall health is declining
- Development of green products as a response to problems
- Problems could be opportunities to respond to consumer fears and govt regulations
- Implications of trends in physical environment for market attractiveness
- Attractive opportunities for green goods and services
- Global warming will effect products and services dependant upon weather
What are green products?
Businesses also have seen opportunities in developing thousands of green products (those that are environmentally friendly) such as phosphate-free detergents, tuna caught without netting dolphins, organic fertilisers, high-efficiency LED lighting, recycled paper, and clothes made from 100 per cent organic cotton and coloured with nontoxic dyes.
What kinds of risk derive from a change in a country’s regulatory environment?
Business regulations reflect a country’s economic maturity and political philosophy
- Political risks include seizure of assets
- Other risks include import restrictions and price controls
- Over-regulation produces inefficiencies, restricts entry by new competitors and creates inflationary pressures
What are some of the more important opportunities resulting from technological innovation?
Trends in electronics/telecoms
- Revolutionized how businesses operate, how goods and services and ideas – how individuals interact with each other
- Cost of communicating has dropped considerably
- Convergence of computing, telecoms and entertainment
Implications of technology trends
- Changes in technology have always created attractive new markets e.g. ford’s model T made travel easier
- Impact on marketing communications, distribution, packaging and market research
Describe what an opportunity/threat matrix is and how it can be used to help management identify, evaluate and respond to environmental events.
The opportunity/threat matrix enables the examination of a large number of events in such a way that management can focus on the most important ones. Thus, events such as number 4 in the exhibit, with a high probability of occurring and having a high impact should be closely monitored. Those with a low probability of occurrence and low impact, such as number 3 in the exhibit, should probably be dropped, at least for the moment. Events with a low probability/high impact (number 1) should be re-examined less frequently to determine whether the impact rating remains basically sound.
What are the major trends in the world’s population?
- The worlds population has grown 300% in the last 50 years
- Most of the increase is in poorer regions
- Age structure is also changing – more old people
- Movement from rural to urban
One result of change in the demographic/economic environment would include:
A.increased utilisation of healthcare facilities and growth of the pharmaceutical industry as a result of the ageing population.
B.a movement toward strict liability doctrines with regard to consumer injuries.
C.a decrease in the time required to bring a product from incubation to commercialisation.
D.movement toward greater valuation of leisure time and less emphasis on work for its own sake.
E.greater homogeneity of cultural styles throughout the world.
A
The sum total of all expenditures made on final products, which is used to measure economic growth, is the:
A.consumer price index.
B.national trade balance.
C.foreign trade balance.
D.net national product.
E.gross national product/gross domestic product.
E
13 The greying of the population in many developed countries is an example of which component of the macro environment?
A.the natural environment.
B.the technological environment.
C.the demographic environment.
D.the regulatory environment.
E.the sociocultural environment
C
14 A recent government survey concluded that, in the UK, four out of five adults want to follow a healthy diet. This is an example of which component of the macro environment?
A.the natural environment.
B.the technological environment.
C.the demographic environment.
D.the regulatory environment.
E.the sociocultural environment.
E
15 When Apple saw music downloads over the internet as a marketing opportunity, this emerged from changes in which component in the macro environment?.
A.the natural environment.
B.the technological environment.
C.the demographic environment.
D.the regulatory environment.
E.the sociocultural environment
B
16 Using the opportunity/threat matrix, management should focus on those events that have ____ probability of occurrence and ____ impact:
A.low, high.
B.low, low.
C.high, high.
D.high, low.
E.the matrix does not provide such guidance.
C
17 Which of the following aspects of marketing practice have been affected by technological developments? I. marketing communications II. distribution III. marketing research
A.I and II.
B.II and III.
C.I and III.
D.I, II and III.
E.none of these aspects of marketing practice have been affected
D
18 An example of the sociocultural environment is the:
A.greenhouse effect that may lead to a global warming trend, affecting farm production worldwide.
B.increased utilisation of healthcare facilities and growth of the pharmaceutical industry, as a result of the ageing population.
C.the evolution of mobile internet.
D.the decline in consumer spending as a result of the credit crunch.
E.change in the attitude of consumers toward healthcare costs.
E
The major components of the macroenvironment include:
A. sociological, political, economic, geographic and psychological.
B. technological, sociocultural, demographic, regulatory, natural and economic.
C. national, cultural, subcultural, international and domestic.
D. tertiary, secondary, primary and local.
E. global, regional, national, domestic, state and local.
B
Given today’s ‘green’ trend, to profit from the threats to the physical environment, firms should:
A. continue to ignore all but the legally required actions.
B. support legislation to repeal oppressive pollution laws.
C. develop products or promotional campaigns that tout their good citizenship.
D. move their offensive operations to countries that have minimal pollution laws.
E. spend whatever it takes to be a model of non-polluter.
C
The sudden reversal of its policies by the Mexican government to encourage foreign investment in Mexico is an example of which of the components of the macroenvironment?
A. Technological environment.
B. Regulatory environment..
C. Natural environment.
D. Demographic environment.
E. Sociocultural environment.
B
Was the installation of catalytic converters by US car manufacturers to reduce the pollution of car emissions into the atmosphere a:
A. voluntary action caused by concern for the natural environment?
B. voluntary action caused by pressure from the sociocultural environment?
C. voluntary action caused by advances in the technological environment?
D. involuntary action caused by changes in the regulatory environment?
E. involuntary action caused by changes in the demographic/economic environment?
D
The trend that started in the 1970s, with a reduction in the administrative and legal barriers to competition, is called:
A. administered competition.
B. fragmentation.
C. nationalisation.
D. deregulation.
E. deindustralisation.
D
A significant result of technological advancement is:
A. the replacement or decline of certain industries.
B. a change in country population.
C. an increase in country GNP.
D. an increase in attention to the physical environment.
E. an increase in attention to the political/legal environment.
A
By the year 2040, it is expected that the population aged ____ will represent approximately half of the world’s population.
A. 20–29.
B. 30–39.
C. 40–49.
D. 50–59.
E. 60+
E
The economic performance of a country is measured by the:
A. consumer price index.
B. national trade balance.
C. foreign trade balance.
D. net national product.
E. gross domestic product.
E
Suppose you have been hired as a marketing consultant by Stouffer’s Foods, the manufacturer of the Lean Cuisine line of low-calorie frozen entrées. How might the demographic trends and the changes in family structure discussed in this module affect each of the 4 Ps in Stouffer’s strategic marketing programme? What adjustments should the company be prepared to make in its marketing programme?
The president of a large manufacturer of household appliances (such as dishwashing machines, refrigerators, washers and dryers that are manufactured and sold in the United States, Japan, Mexico and Europe) has asked you to develop a system for monitoring and evaluating the impact of major environmental trends on his company’s strategies and programmes. Briefly describe your proposed system in terms of how you would organise your scanning activities, identify environmental issues and evaluate the impact of each.
