In today's post I'll be discussing environmental scanning.
what is it?
According to the textbook we are using in class environmental scanning is "the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends," (Marketing, Kerin, Hartley, Rudelius).
In my own words, environmental scanning is being aware of the environment of the market outside of your organization. If you pay attention to what trending and what is not, then you can adjust your strategies to maximize your sales.
Where do environment trends even come from?
1. SOCIAL FORCES... Consumers are communicating mainly through social networks meaning if organizations advertise on these sites a lot more people will see and consider purchasing their product.
2. ECONOMIC FORCES... The fact that the economic crisis is over and the economy is in slow recovery helps organizations because a new economic marketplace is forming.
3. TECHNOLOGICAL FORCES... As technology continues to advance, organizations continue to find new ways to use smartphone apps and the internet to promote their products.
4. COMPETITIVE FORCES... Customers are starting to give companies feed back and reviews, letting competitors know how their competition is doing in comparison to them.
5. REGULATORY FORCES... Regulations will always be in place. Companies have to think of ways to promotion ideas that follow these regulations, but are still effective. For example, online privace regulations will continue to grow, so companies have to be careful how they advertise online.
demographics
Demographics describe the population according to selected characteristics such as age, gender, ethnicity, income and occupations. Why do demographics matter in environmental scanning?Demographics matter because depending on what product the organization is selling, they have to decide which demographic in the current environmental market to target. There are currently four generational cohorts that could be targeted with any given product. Each cohort has their own standards that a product has to meet before they will consider buying. These four cohorts are called the Baby Boomers, Generation X, Generation Y, and the Millennials.
Baby Boomers- Born between 1946 and 1964. They are starting to retire at a rate of 10,000 every 24 hours. They make up 20% of the population and are the wealthiest generation in America, so a lot of ads and campaigns are aimed towards them. They focus on more medical products that relate to them staying healthy.
Generation X- Born between 1965 and 1976. This generation is also known as the Baby Bust. The number of children born started declining. They make up 15% of the population and are self-reliant consumers that are supportive of racial/ethnic diversity and are better educated.
Generation Y- 72 million babies born between 1977 and 1994. (Hey, I'm part of generation Y! I was born in November of 1994... Which generational cohort are you a part of?!) Birth started to increase in this time period, making this generation also known as the Baby Boomlet or Echo-Boom. This generation has a huge influence on sports, music, computers, communications and networking.
Millennials- Born in 1995 or after. This is the current generation. Their standards are very similar to Generation Y, but they are a lot more tech savvy and more conscientious about what they are buying.
why?
Environmental scanning is a huge part of marketing. Without this process of scanning the environment for current trends, organizations would be advertising blindly. In order for advertising to be successful, the ads have to target a certain group of people. If they don't then no body will be interested in the product being advertised and the organization trying to sell this product won't have any sales. By scanning the environment these organizations can understand what consumers are looking for in the market. Demographics come into play because each generational cohort has different wants and needs, so the organizations can decide which cohort to target, and see what they are looking for to come into the market at that given time.Thanks again for reading! Hope you'll come back for my next post. Until then fellow bloggers...
