Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

4. Evaluating Opportunities
   in the Changing Marketing
   Environment

Text © The McGraw−Hill

Companies, 2002

94 Chapter 4

You saw in the last chapter that using segmenting and positioning to narrow

down to a specific marketing strategy takes a real understanding of what makes cus-

tomers tick. You also saw that developing a competitive advantage and a strategy

that offers customers superior value takes an understanding of the capabilities of

your own company and of competitors. This chapter takes this thinking further. As

the UPS case shows, a marketing manager must analyze customer needs and choose

marketing strategy variables within the framework of the marketing environment

and how it is changing.

A large number of forces shape the marketing environment. To help organize

your thinking, it’s useful to classify the various forces as falling into either (1) the

direct market environment or (2) the external market environment. The direct

environment of any generic market or product-market includes customers, the com-

pany, and competitors. The external market environment is broader. The variables

of the external market environment fall into four major areas:

1. Economic environment.


2. Technological environment.


3. Political and legal environment.


4. Cultural and social environment.
   In the short run, the marketing manager doesn’t control the variables of the mar-
   keting environment. That’s why it’s sometimes useful to think of them as uncontrollable
   variables. On the other hand, the marketing manager can and should carefully con-
   sider the environmental variables when making decisions that can be controlled. For
   example, a manager may not be able to do anything to offset the strengths of a spe-
   cific competitor, but the manager can select strategies that lead the firm into a new
   product-market where that firm does not compete, or where competition in general is
   not as strong. In this chapter, we’ll look at these marketing environment variables in
   more detail. We’ll see how they shape opportunities—limiting some possibilities and
   making others more attractive.

trucks a year—from 21 differ-

ent factories to 6,000 dealers

across North America. Now a

Ford dealer who wants to find

a metallic blue Mustang con-

vertible can instantly do it

online. The UPS system also

reduces transit time for a new

Mustang from 16 days to 12.

That frees up $1 billion worth

of inventory and saves Ford

$125 million a year in inventory

carrying costs.

These successes are earn-

ing profits for UPS, but it still

must cope with the challenges

of a weakened economy.

However, even when demand

for package deliveries is low

UPS has a profit advantage

over competitors who are less

efficient. A weak economy

may even help the UPS strate-

gic business unit that offers

logistics consulting services

because customer firms have

an even greater need to pare

costs. That is one reason the

market for logistics consulting

services is expected to grow

threefold by 2005. Moreover,

the trend toward free trade is

helping UPS expand revenue

from both international air-

freight and the broker

services it now offers to help

firms cope with local

customs laws.^1

The Marketing Environment