Marketing II Marketing II The Chang School-Ryerson UniversityThe Chang School-Ryerson University

Continuing EducationContinuing Education

Email:Email: agervais@ryerson.caagervais@ryerson.ca preferredpreferred

Web: Web: www.ryerson.ca/~agervaiswww.ryerson.ca/~agervais Office: Bus 308Office: Bus 308

Phone: 416-979-5000 Ext 4215Phone: 416-979-5000 Ext 4215

CMKT 200 Fall 2005Instructor: Armand Gervais

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Lecture 1 AgendaLecture 1 Agenda IntroductionsIntroductions Overview of CourseOverview of Course Project OverviewProject Overview Peer EvaluationPeer Evaluation BreakBreak Marketing ReviewMarketing Review To Do’s for next weeks classTo Do’s for next weeks class Questions and AnswersQuestions and Answers Time to begin forming GroupsTime to begin forming Groups

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IntroductionIntroductionArmand GervaisArmand Gervais

Education: Education: Bachelor of Commerce-Major Economics University of TorontoBachelor of Commerce-Major Economics University of Toronto MBA York UniversityMBA York University

Teaching Experience:Teaching Experience:

3 years teaching MKT 731 (Industry Analysis), BUS 800 3 years teaching MKT 731 (Industry Analysis), BUS 800 (Strategic Management)(Strategic Management)

CMKT 200 CMKT 200 Business Experience: Business Experience:

ID-ONE Inc. Residential Interior DesignID-ONE Inc. Residential Interior Design Partner and Operations ManagerPartner and Operations Manager

4 years with Air Miles4 years with Air Miles Business/Database AnalystBusiness/Database Analyst Project Manager Database DevelopmentProject Manager Database Development

6 years retail management. Wendy's, Major Video6 years retail management. Wendy's, Major Video

Industry Experience:Industry Experience: Loyalty programs Loyalty programs Hospitality- restaurants and resortsHospitality- restaurants and resorts Retail-Confectionaries, clothing, travel, books and electronics.Retail-Confectionaries, clothing, travel, books and electronics. Telecommunications Industry Telecommunications Industry

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Class – Your turnClass – Your turn

Your NameYour Name School Major or specializationSchool Major or specialization Work or life experienceWork or life experience Expectations for the classExpectations for the class

What are your objectives?What are your objectives? What has to happen for this to be a success for you?What has to happen for this to be a success for you?

Course OutlineCourse Outline

Group Project Group Project and Peer and Peer

EvaluationEvaluation

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SCANNING THE MARKETING

ENVIRONMENT3333CHAPTER

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Challenge Launching New Challenge Launching New ProductsProducts

New-product experts estimate that New-product experts estimate that 80-94% of the over 25,000 new 80-94% of the over 25,000 new consumable products (food, consumable products (food, beverage, health, beauty, and other beverage, health, beauty, and other household and pet products) household and pet products) introduced in North America introduced in North America annually “Don’t annually “Don’t succeed in the long run”succeed in the long run”

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FIGURE 3-1FIGURE 3-1 Environmental forces affecting Environmental forces affecting the organization, as well as its suppliers the organization, as well as its suppliers

and customersand customers

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FIGURE 3-2FIGURE 3-2 An environmental scan of CanadaAn environmental scan of Canada

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DemographicsDemographics Population Size and GrowthPopulation Size and Growth Age WavesAge Waves

Mature householdMature household Baby boomersBaby boomers Generation XGeneration X Baby boomletBaby boomlet

SOCIAL FORCES

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FIGURE 3-3FIGURE 3-3 The age distribution forecast The age distribution forecast for the Canadian population in 2011for the Canadian population in 2011

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The Canadian FamilyThe Canadian Family Blended familyBlended family

Population ShiftsPopulation Shifts Census metropolitan areas (CMAs)Census metropolitan areas (CMAs)

Regional MarketingRegional Marketing Ethnic DiversityEthnic Diversity

SOCIAL FORCES

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CultureCulture Changing Attitudes and ValuesChanging Attitudes and Values

Value consciousnessValue consciousness

Social Forces

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Macroeconomic ConditionsMacroeconomic Conditions Consumer IncomeConsumer Income

Gross IncomeGross Income

Economic Forces

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FIGURE 3-4 FIGURE 3-4 Income Income distribution of distribution of

Canadian householdsCanadian households

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Macroeconomic Conditions Macroeconomic Conditions Consumer Income (cont)Consumer Income (cont)

Disposable IncomeDisposable Income Discretionary IncomeDiscretionary Income

Economic Forces

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Technology of TomorrowTechnology of Tomorrow Technology’s Impact on Technology’s Impact on

Customer ValueCustomer Value Electronic Business TechnologiesElectronic Business Technologies

MarketspaceMarketspace Electronic commerceElectronic commerce Internet and Worldwide WebInternet and Worldwide Web Commercial online servicesCommercial online services IntranetIntranet ExtranetsExtranets

Technological Forces

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Alternate Forms of CompetitionAlternate Forms of Competition Pure competitionPure competition Monopolistic competitionMonopolistic competition OligopolyOligopoly MonopolyMonopoly

Competitive Forces

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Components of CompetitionComponents of Competition EntryEntry

Barriers to EntryBarriers to Entry Power of Buyers and SuppliersPower of Buyers and Suppliers Existing Competitors and Existing Competitors and

SubstitutesSubstitutes Start-Ups, Entrepreneurs, and Start-Ups, Entrepreneurs, and

Small Small BusinessBusiness

Competitive Forces

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The New Look in American The New Look in American CorporationsCorporations

RestructuringRestructuring

Competitive Forces

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RegulationRegulation

Protecting Competition and Protecting Competition and ConsumersConsumers The Competition ActThe Competition Act

REGULATORY FORCES

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FIGURE 3-5 FIGURE 3-5 Major Major federal legislation federal legislation

designed to protect designed to protect competition and competition and

consumersconsumers

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Self-RegulationSelf-Regulation ConsumerismConsumerism

Regulatory Forces

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Porter 5 Forces Porter 5 Forces FrameworkFrameworkEntry Barriers

Economies of ScaleProprietary Product DifferencesBrand IdentitySwitching CostsCapital RequirementsAccess to DistributionAbsolute Cost Advantages- Proprietary learning curve- Access to necessary inputs- Proprietary low-cost product designGovernment PolicyExpected Retaliation

Determinants of Supplier PowerDifferentiation of InputsSwitching Costs of Suppliers and Firms in the IndustryPresence of Substitute InputsSupplier ConcentrationImportance of Volume to SupplierCost Relative to Total Purchases in the IndustryImpact of Inputs on Cost or DifferentiationThreat of Forward Integration Relative to the CompetitionThreat of Backward Integration by Firms in the Industry

Rivalry DeterminantsIndustry GrowthFixed (or Storage) Costs/Value AddedIntermittent Over-CapacityProduct DifferencesBrand IdentitySwitching CostsConcentration and BalanceInformational ComplexityDiversity of CompetitorsCorporate StakesExit Barriers

Determinants of SubstitutesRelative Price Performance of SubstitutesSwitching CostsBuyer Propensity to Substitute

Bargaining LeverageBuyer Concentration vs. Firm ConcentrationBuyer VolumeBuyer Switching Costs Relative to Firm Switching CostsBuyer InformationAbility to Backward IntegrateSubstitute ProductsPull-Through

Price SensitivityPrice/Total PurchasesProduct DifferencesBrand IdentityImpact on Quality/ PerformanceBuyer ProfitsDecision Makers’ Incentives

IndustryCompetitors

Intensity ofRivalry

IndustryCompetitors

Intensity ofRivalry

BuyersBuyers

New EntrantsNew Entrants

SubstitutesSubstitutes

SuppliersSuppliers

Threat of New Entrants

Bargaining Powerof Suppliers

Threat of Substitutes

Buying Powerof Buyers

Determinants of Buyer Power

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To Do’s for Next ClassTo Do’s for Next Class

Before you leave today sign attendance sheetBefore you leave today sign attendance sheet Email me your contact information Student Email me your contact information Student

ID, Email, and contact number ID, Email, and contact number Include course and section number in subject Include course and section number in subject

lineline Please include a little about yourself:Please include a little about yourself: Program, Major, work experience etc. Program, Major, work experience etc.

Get textbook Get textbook Complete the assigned readings download Complete the assigned readings download

through librarythrough library Form groupsForm groups