Economic analysis and support to antitrust and consumer protection investigations
Political and legal factors
• What influences the target market? • Controllable factors • Uncontrollable factors
• Social • Demographic • Race and ethnicity • Economic • Technology and innovation • Political and legal • Competitors
Understanding the external environment
“the process of collecting and evaluating environmental information
by a team of specialists”
What is environmental scanning?
• Values: • A strongly held and enduring belief regarding
what is desirable
Self- sufficiency
Upward mobility Work ethic
Equality Individualism Achievementorientation
Social factors
• How do consumers use social media? • How do brands use social media?
Social media
Social media
Social media
Social media
Social media
Social media
• Wendy’s Pretzel Burger Love Songs
Social media
• Statistics of a population, including age, race and ethnicity, and location
• Uncontrollable • Typically more useful if broken down in to
more specific groups, like generations
Demographic factors
• Tweens: • Born 2010 or later • Associated with mobile games and
smartphone apps markets • Almost half have a smart phone
Demographic factors
• Generation Z: • Born 1995-2009 • Often influence parents’ technology choices • 90% use social media
Demographic factors
• Millennials: • Born 1977-1994 • Larger than population of Baby Boomers • Starting to have their own children • Associated with high workplace turnover
Demographic factors
• Generation X: • Born 1965-1976 • First group of latchkey kids • Have higher average incomes compared to Baby
Boomers and Millennials
Demographic factors
• Baby Boomers: • Born 1946 to 1964 • Many have retired, but tend to outspend other
generations • Active, don’t like being called “old” • Cadillac Ad
Demographic factors
Ethnic markets
• Changing American demographic makeup:
• By 2050, 1 in 3 U.S. residents will be Hispanic
• By 2041, whites of European descent will make up less than half of the U.S. population
Ethnic markets
• Hispanic Americans: • The largest U.S. minority group • Consume both English and Spanish media • Popular group for mobile service providers
Ethnic markets
• African Americans: • 53% are under the age of 35 • Have a strong influence on trends • Purchasing power is increasing
Ethnic markets
• Asian Americans: • Highest average family income • 49% have a bachelor’s degree • Often heavy users of technology and early
adopters
Ethnic markets
• Native Americans:
Ethnic markets
• Native Americans: • PGA and Notah Begay III foundation • Nike and Indian Health Service • Harley Davidson and the Indian Summer Festival
Ethnic markets
Economic factors
• Research: • Internal idea incubators • Connections with universities
• Stimulating innovation: • Building scenarios • Enlisting the web • Talking to early adopters • Using marketing research • Creating an innovative environment • Catering to entrepreneurs
Technology and innovation
• Federal legislation • Competitive environment, pricing, advertising and
promotions, consumer privacy
• State and local laws • Taxes, fast food restrictions
• Regulatory agencies • Consumer Product Safety Commission • Food and Drug Administration • Federal Trade Commission • Federal Communications Commission
Political and legal factors
• Bureaus of the FTC: • Bureau of Competition
• Reviews mergers and acquisitions • Challenges anti-competitive conduct and promotes
competition • Provides information and holds conferences and
workshops on competition issues • Bureau of Economics
• Provides economic analysis and support to antitrust and consumer protection investigations
Political and legal factors
• Bureau of Consumer Protection • Enforces federal laws that protect
consumers • Empowers consumers with information • Communicates with consumers
Political and legal factors
• CAN-SPAM Act • Regulates unsolicited e-mail advertising • Prohibits commercial e-mailers from
using false addresses and presenting false or misleading information
• Children’s Online Privacy Protection Act • Requires websites operators to post a
privacy policy on their home page and a link to the policy on every page where personal information is collected
Political and legal factors
• Technology shifts the competitive environment
• Market share and profits • Global competition
Competitive factors
