This document discusses various marketing environment forces that affect marketing decisions including political, legal, regulatory, societal, economic, competitive, and technological forces. It provides examples of how each force influences customers' preferences and needs as well as marketing managerial decisions. The document also outlines several laws and government agencies in the US that regulate industries and protect consumers through enforced regulations and standards.

2. Kimfa Lee Chung
Jeremy Bellamy
Sonia Osmond
Danielle Modeste
Kern Rocke

4.  Marketing Environment
 Market Segmentation
 Niche and Micro Marketing

5.  It is an organizational function and a set of processes
for creating, communicating and delivering value to
customers.
 It is managing customer relationships in ways that
benefit the organization and its stockholders.
 A product is a good, service or idea

6. Marketing is an integral
part of the Management
Function

7.  The Marketing Environment surrounds the buyer and
the marketing mix.
 Organizations have control over the 4Ps of the
marketing mix but they are unable to control any of the
Environmental forces.
 These Environmental Forces are:
1. Political
2. Legal

8. 4. Regulatory
5. Societal
6. Economic
7. Competitive
8. Technological
 These forces affect the manager’s ability to expedite
change in the market because they are outside factors
that they must take into consideration when
developing a marketing plan.

9. o Influences how a marketing manager should perform
certain tasks
o Influences customers’ preferences and needs for
products
o Managerial decisions become affected by
environmental forces which influence customers’
reactions to the organization’s marketing mix

11. SOURCES
DIISTRIBUTORS
RETAILERS
(Foodservice
Operators)
CONSUMERS

12. This has a major influence on competition, which
is affected by the number of industries controlling
the supply of a product, relative to the supply.
Demand is determined by buyers’ purchasing
power and willingness to buy.
Scenario
◦ In cases such as the Great Recession in the
USA, American consumers were driven to
adopt a back to basic frugality in their
lifestyle and spending pattern; in –turn
marketers had to make decisions to satisfy a
more cautious spender with lower priced
goods & services.

13. Mc Donald's during the recession made decisions
that actually won them the recession…they
called it “Recession-Friendly Pricing”

14.  Marketers need to pay attention to income
distribution & income levels.
 Some establishments use this information to
market their goods and services toward their
target groups.
◦ Income, cost of living, interest rates and
savings and borrowing patterns have a large
impact on companies forecasting.

15.  The competitive environment consists of all the organizations
that attempt to serve similar customers.
 Two types of competitors are of major concern: brand
competitors and product competitors.
 Brand competitors provide the most direct competition,
offering the same types of products as competing firms.
 Product competitors offer different types of products to
satisfy the same general need. Domino’s Pizza, McDonald’s,
and Kentucky Fried Chicken are product competitors.

16.  Marketers must identify their relevant brand and
product competitors in order to identify market
opportunities and develop marketing strategies.
 Marketers need to identify when some product
competitors become brand competitors by expanding
their product offerings.
 Keeping track of the number, types, and actions of
competitors is becoming increasingly important, but
much more complex and difficult.

17.  Marketers will have to pay more attention competitor
pricing, new-product development, and changes in
corporate strategy.
 Legal forces have a great part to play in preserving
competition and it is important for marketers to
interpret these laws when analyzing their marketing
mix.

18. Influence the country’s economic & political stability
and decision making.
Itaffects domestic matters, negotiations of trade
agreements.
Political
trends or rather -the government of the day
can have a tremendous impact on the hospitality and
healthcare industries.

20.  Food Safety - they are responsible for placing
proper measures in place for preventing and
managing outbreaks of food-bourn illnesses.
 Financing – dependent on the government to supply
the funding necessary to meet healthcare services
(feeding of patients/ inmates).
 Human resources – ensuring that trained
professionals are filling the positions where required.

21.  Restaurants will be affected mostly by tax
related issues, labour laws and regulations
related to food preparation.
 Food prices is always dependent state of the
economy and political influence. Rise in taxes
affect have an impact on pricing food.
 Labour laws such as minimum wage must be
taken into consideration when hiring staff. This
in turn affects a decision for number of
employees in an establishment.

22.  There are numerous laws designed to protect the
consumers and preserve competition.
 Interpretation of these laws by marketers has a great
impact on marketing mix components.
 Business executives must watch these developments
when planning their products and marketing programs.

23. A. Promoting competition
Act Purpose
 Sherman Act (1890) Prohibits monopolistic practices
Clayton Act (1914) Prohibits anticompetitive activities
Federal Trade Commission Act (1914) Establishes regulatory
agency to enforce laws against unfair competition
 Robinson–Patman Act (1936) Prohibits price discrimination
Lanham Trademark Act (1946) Protects trademarks & brand names
US–Canada Trade Act (1988) Allows free trade between US &
Canada

24. B. Protecting consumers
and society
 Food, Drug, and Cosmetics Act (1938) Regulates food, drug &
cosmetic industries
 Fair Packaging and Labeling Act (1966) Regulates packaging &
labeling
 Child Protection and Toy Safety Act (1969) Prevents marketing of
dangerous products to children
 Child Protection Act (1990) Regulates advertising on children’s
television programs
 Nutrition Labeling and Education Act (1990) Requires that food
product labels provide detailed nutritional information.

25.  Laws typically affect marketing activities by
indicating what can or cannot be done.
 Until recently, Germany had a law that forced most
retail stores to close at 6:30 PM on weekdays and 2
PM on Saturdays, and it did not allow commercial
baking on Sunday.

26. Regulatory forces are enforced regulations that can
affect marketing decisions.
Industries are encouraged to develop guidelines to
stop questionable practices.
Those agencies responsible are: (based in the USA)
oUS Department of Health and Human Services
oUS Department of Agriculture
oUS Department of Commerce

27. • Food Additive • Responsibility (liability)
Regulation( including
• Genetic Modifications
Food Irradiation)
• Consumer protection
• Labeling
• Novel Food Processing
• Standardization

31. US Department of Health and Human Services.
How is marketing affected by this force? (pg 127)
 The USDHHS Act, of enforced regulations are there to ensure
that all foods that are to be put on the market( local &
international), fit the criteria of being pure & wholesome,
safe to consume and have been produced under sanitary
conditions.
 The Act provides 3 mandatory standards:
1. Standards of identity
2. Standards of quality
3. Standards of fill of container

32. How does the USDA affect marketing? (Chapter 5)
 The USDA facilitates strategic marketing of agricultural
product in domestic and international markets by
grading, inspecting and certifying the quality of these
products in accordance with official USDA standards or
contact specifications.
 There are established grade standards for several
varieties of foods which industries are to meet
accordingly when attempting to market products.

33.  USDA’s Food Safety and Inspection Service(FSIS) is
responsible for assuring that US standards are met for
imported meat and poultry.
 The FDA has jurisdiction over ALL foods not covered by
federal meat and poultry inspection laws.

34. Upon our shores, the Chemistry, Food and Drugs
Division of Trinidad and Tobago (CFDD).
There mission involves:
Safe quality and standards of foods, Safety
involving pesticides & technologies and laboratory
services in the areas of food and drug.
Anypersons and such wishing to import,
manufacture and sell food products must have
them inspected by the CFDD.

36. This forces rings a bell off, causing marketers to be
responsible for decisions. It is somewhat linked to the
regulatory and legal forces as it is an aspect that deals
with looking out for the consumers and population.
It includes environmental pollution and the use of
pesticides on crops as well as food labelling.
The type of goods and services demanded by
consumers is a function of their social conditioning and
their consequent attitudes and beliefs. Therfore
marketers has to take social factors into consideration
before making a decision.

37.  It includes the behaviour of the demographic environment
such as the population size, growth.
 Global trends
 Cultural diversity – In the US, it’s a mosaic of unique people
with a variety of cultures. Successful marketers understand
the delicate balance between important cultural differences
and similarities that unite different cultures.
 Emphasis on Health and Fitness

38.  Desire for convenience foods – People want fast food.
 Consumerism - This movement is one reason marketers need
to adopt an ethics perspective. Giving consumers products
that comply with expectations, charging fair prices, being
honest, and practicing social responsibility are the best ways
to respond to consumerism.
 Cause related marketing – buy the
Yoplait with the pink ribbon and
support breast breast cancer….

39. In the US, the Federal Trade Commission(FTC) is a nation
protection agency who work for the consumers. They
enforce the regulations that work to protect the
consumer.
One of the most talked about food topics these day is
how food is being marketed to children.
The FTC, FDA,CDCP and the USDA have released a
jointly prepared set of principles that will be reviewed,
commented on, and implemented in 2016. The
principles want to stop advertising unhealthy foods to
children in an effort to fight the childhood obesity crisis.

40.  Marketers are expected to include foods made of at
least one of the following components: fruits,
vegetables, whole grains, fat-free of low-fat milk, fish,
extra lean meat or poultry, eggs, nuts and seeds, and
beans.
 They cannot advertise foods with more than 1 g of
saturated fat, 0 g trans fats, 13 g added sugars, or 210
mg of sodium.
 They age of children will now be move up from 12 to
17 to include teenagers in healthier choices.
This proposed guideline has marketers peeved.

41.  The FDA is now supporting a the front-of-packaging labeling
scheme introduced by the Grocery Manufacturers
Association (GMA) and the Food Marketing Institute (FMI).
 McDonald’s, Wendy’s, KFC, Subway are some of the fast food
chain restaurants that have gone the way of marketing
reduced calorie labeling for more health conscience trend
customer.

43.  Genetically Modifies foods
 Packaging – Bispherol A (BPA) free containers,
microwavable containers –marketers are striving to
market food free of this chemical
 Infant formula – Marketers have introduced a wide
range of formulas to meet almost nutritional need.
DHA, RHA, Gentle-ease…
 Service and Transport – convenience counts. Telephone
meal order, on-line meal orders, mobile meal orders via
smart phones, TV orders of frozen meal items being
shipped to homes etc.

44.  Food Preservation techniques –
 The challenge is not only technical but also
commercial–to make practical, affordable versions of
products.
 Increased regulation. Marketers should be aware of
the regulations concerning product safety, and other
areas that affect technological changes. They must
also be alert to any possible negative aspects of an
innovation that might harm users or arouse
opposition.

45.  This is the process of dividing a total market into groups of
people with similar needs, wants, values and buying
behaviour. (Harrell 2002)
 What is a need?
This a basic commodities that is essential for the consumer. This
need influences the wants.

48.  For more sales to be made
 To gain knowledge about the customer
 Product vary to satisfy consumer needs
 Prevent promoting products to the wrong people
 Target specific groups
 Market a wider range of differentiated products
 Customer feed backs are easily achieved

49. ADVANTAGES DISADVANTAGES
Understand the different needs of Increase marketing cost
the customer
Grouping consumers by specific Increased costs to develop variations products
criteria facilitates identification of
NEW properties of products
Helps in understanding consumer Higher advertising and other cost
Identifies competition and New costs incurred for researching
opportunities segmentation.
More efficient use is made of
marketing resources - less waste

51. Values and Life-Styles Research Program
Understanding customers is critical to marketing. VAL strengthens
demographic characterizations by explaining the deeper psychological
drivers of consumer behavior.
Defining segments based on a prediction of consumer behavior based on
resources and primary motivation
VALS Value and Life Style Motivation: This is a research program based on
consumer behavior on resources and primary motivation. It groups
people according to their lifestyle

52.  VALS three compartment model: motivation viewed from low to high
innovation
 Ideas: consumer choices based on knowledge and principles.
 Achievement: consumer choices made, are based on perceptions of
success noticeable by peers.
 Self - expression: consumer makes choices based on social or physical
activity, variety or risk

53.  Behavioral variables
Focus on consumer behavior toward the use of a product; (occasions,
benefits, user status and rate, loyalty status, readiness stage and attitude
towards product).
 Customer relation management:
A computerize data base to store and track purchases and information
about customers.

56.  It is the discovery of a smaller segment of the market and
creating a product or service for the market
 It is easier to gain success in this market due to lack of
competitive competition.
 Generally a niche is a very targeted and focused market
 Example: The Internet

57.  Meet the consumer UNIQUE needs
 Say the RIGHT thing
 Always TEST the market.

58.  The benefits which you have on entering the market has to
have a special appeal on offer.
 Identify the unique needs of the potential audience.
 Find ways to tailor the product or service to meet them.

59.  Ensure when approaching a new market niche that you
understand the market’s hot buttons.
 Be prepared to communicate with the target group as an
understanding member not an outsider.
 Example:
To increase sales from the new niche the Food Service Manager
would need to change the way he communicates with niche.
This can be done by revising the marketing message .

60.  Assess the direct competitors you will find in the new market
niche.
 Determine how you will compare to the competitors in the
market.
 Conduct a competitive analysis by reviewing the competitors
advertisements, brochures or websites to look for their key
selling points.
 Observe pricing, delivery and other service characteristics.

62.  Relatively new marketing trend created by the diversity of the
consumer population and the difficulty in creating a single
product that appeals to all the diverse groups in the
population.
 Refers to the activities performed by the individual providers
of goods and services within a macro-marketing system.
 Organization and Food Service businesses use various
marketing techniques to accomplish objectives related to
profits, market share, cash flow and other economic factors
which enhance their well being and position in the market
place.

63.  Managers must carefully design their marketing plans to
ensure that they complement related production, distribution
and financial constraints.
 Food Service Marketing Managers function is to identify a
specific market or group of customers.
 The manager then delivers products and promotions that
ultimately maximize the profit potential of that targeted
market.

64.  This is the micro-marketing function within an entity.
 Managers strive to get their organizations to anticipate and
accurately determine the needs and wants of customer
groups.
 They respond effectively with a flow of need-satisfying goods
and services.

65.  The four major micro-marketing factors in the marketing mix
which can be readily adjusted by the organization are:
 Product
 Price
 Placement
 Promotion

66.  Food Services who offer a unique product can leverage brand
loyalty, specialized distribution channels or technological advantage
and can therefore go ahead of their competitors in the market.
 Food Service companies dealing with low commodity products tend
to focus on price, pursuing efficiency and cost controls to outbid the
competition.
 Note: If food service is offering the right product at the right price,
a high amount of sales wont occur if the potential buyers or target
group is unaware of the product or does not have access to it.
 Hence the importance of promotion and placement of the product
or service.

67.  Market decisions has to be made to ensure the right product
or service has to be selected for the target group.
 This is achieved by doing market research and data analysis
to determine how well the product meets the wants and
needs of the target group.
 Example a new product will have higher promotional costs
than an improved version of an existing successful product
will be likely make use of its predecessor's image

68.  This is distributing the product to the target market using
appropriate channels at the right time and in the proper
quantities.
 Some distribution channels for food services are: retail,
wholesale, catalog and others.
 Managers devise means of transporting the goods to the
selected sales channels

69.  This relates to sales, advertising, public relations and other
activates that communicate information intended to influence
consumer behaviour.
 IT is necessary to influence the behaviour of retailers and
others who resell or distribute the product.
 The major types of promotion are :
 Personal Selling
 Mass Selling
 Sales Promotion

70.  Personal Selling
This refers to face-to-face usually provides immediate feedback for the
company about the product and instils greater confidence in customers.
Mass Selling
This involves advertising on traditional mass media, such as
television, radio, direct mail, and newspapers, and is beneficial
because of its broad scope.
It entails the use of unpaid media exposure, known as publicity, such
as feature articles about a company or product in a magazine or
related interviews on television talk shows.

71.  Sales Promotion
This includes free samples, coupons, contests, and other
miscellaneous marketing tactics.
These approaches are used to stimulate interest in products,
encourage first-time trials, or help build brand loyalty, among
other objectives.

72.  This entails using discounts and long-term pricing goals, as well as
considering competitive, demographic, and geographic influences.
 From the buyer's perspective, the price must be within certain
boundaries and must be commensurate with the perceived value of
the item.
 For the producer, the price of a product or service generally must
at least meet some minimum level that will cover a company's cost
of producing and delivering its offering.
 However, even if a company were to price its items exactly at the
break-even point on a unit basis, there is no guarantee there will be
sufficient demand at that price.

73.  Pricing is an implicit negotiation between supplier and
customer, with competition as an intervening factor that
shapes the nature of this negotiation.
 In a few cases pricing decisions may be largely out of a firm's
control, such as when government controls are in effect or
when items (usually raw materials and agricultural
commodities) are sold through a competitive bidding system.

74.  The three most common competitive strategies according to Michael
Porter’s book Competitive Strategy are:
 Lower-Cost Supplier
 Differentiation/Uniqueness
 Niche Development
Porter believed that the strategy a company chooses is shaped in large
part by its current position within its industry and by the industry's
current stage of development.

75.  Food Services which manufactures a commodity product
which adopt a low-cost supplier strategy are usually
characterized by a vigorous pursuit of efficiency and cost
controls.
 These Food Services compete by offering a better value than
their competitors, accumulating market share, focusing on
high-volume and fast inventory turnover.

76.  Food Services adhere to a differentiation strategy achieve market
success by offering a unique product or service.
 They often rely on brand loyalty, specialized distribution channels
or service offerings, or patent protection to insulate them from
competitors.
 Due their uniqueness, they are able to achieve higher than average
profit margins, making them less reliant on high sales volume and
extreme efficiency.

77.  Food Services which pursue a niche market strategy succeed by
focusing all of their efforts on a very narrow segment of an overall
target market.
 They strive to prosper by dominating their selected niche.
 They are able to overcome competition by aggressively protecting
market share and by orienting every action and decision toward the
service of its select group.