market sensing. specifically we

will be looking at the economic, technological,

regulatory and natural environmental aspects

of the environmental analysis.

previously we talked about how our marketing

focuses on facilitating an exchange between a customer

and the organization's marketing mix so that we can create value

and meet customer needs. specifically we've already talked about the

competition aspect of environmental analysis

and today would like to move on and talk about the

economic, regulatory, technological

and natural environment aspects of environmental analysis.

let's start by looking

at a brief video about Cinnabon

that explains a little bit about

how Cinnabon has adjusted its marketing efforts

in this new economy. quickly was impacted

more than others great because of the recession.

can you tell me a little bit about that and how you

traffic circle bounce back later absolutely so Cinnabon is a business

I'm where the franchise division is based in high-traffic

captured traffic then use airports malls travel plazas

when the recession hit a course that affected everyone

but if you rely on traffic in an airport and no one's flying

you rely on traffic in a mall and no one shopping there are no humans

to buy your product so our goal was to drive traffic in two ways

one was to make the brand more relevant universally

so that Cinnabon was front of mind and people would consider us and think about

the venues where we were

to come and see us. the other traffic driving strategy was capture rate

of the people who are already there how can we visually compete

with what had become an explosion a snack competition the venues which still

exist today

so the first strategy was leverage our strategic partnerships and alliances to

tell the story of Cinnabon so we were relevant

universally the second strategy to improve capture rate was

brought in the perception a variety without moving too far away from the

core

we had a little bit of a relevant problem in some of our venues

people loved us but then they would say but I just can't

because they thought it was too big or too high calories and what we really had

to do was market what we already had

smaller cinnamon rolls other baked goods and

reenergize the blended beverage platform so that people would not only see there

was a variety

but that there was portable variety so they can snack on the go

which is critical in the venues where we do business. food companies today seem to

be really pushing

healthy trends cinnabun really seems to embrace

the fact that their product is an indulgence. why have you guys made that

decision and

what's the reaction you're getting from consumers. I think there's a

a few ways we approach it one is if you believe

that people will continue to seek to treat themselves which i think we can

all agree that they will

then you agree there's a market for indulgences but I think

what today's consumers looking for is not less indulgence

they're looking for higher quality they're looking for transparency and

what's in their food.

they're looking for authenticity of ingredients.

so for us since we have the quality it's made from scratch

it's rolled right in front of you in our bakeries we realize that it was okay

to stand in that space that market position

up quality indulgence and the way you do that as an insult to brands make sure

someone's going to give you the gift

of their discretionary calories and of course their discretionary income

you'd better make it so worth it or they will not come back literally and

in speeches that we give when I say Cinnabon cinnamon rolls

are not healthy they applaud they literally applaud and come up and say

it's so refreshing to hear someone say that I think they're not good for your

butt they're good for your soul

and so treat yourself once in a while see you your strategy has been

to offer variety rather than to go the low-fat

cal route on your products absolutely

our strategy has been to offer a variety and protect the quality

you know I think that we were too extreme if we said nope

we are one giant cinnamon roll 880 calories if you don't like it don't buy

it the reality would be over many years

fewer and fewer people would buy it and so not only is it the right thing to do

for communities

it's the smart business move to provide enough variety

while still staying true to who we are. which is what differentiates us

that allows us to enjoy growing success about the franchise business

and other branded categories

(large boxes products are customized these

on their users subscribers preferences

at). sorry about that -- a little added audio there at the end. so

I hope that through this Cinnabon

video you've been able to see how Cinnabon hasn't just

done what they want -- they've made strategic marketing decisions to respond

to the customer

and the economic environment

and their competitive environment. so i think you're

beginning to see how the marketing environment

definitely affects what marketers do.

so let's talk about these economic forces just a little bit more.

and I just -- first of all -- want to define what we mean by

an economic cycle. generally an economic comic cycle is a

pattern of fluctuations as measured by

gross national product and we'll talk about

GNP our GDP in a second in national economies.

and so economies in which

the market decides what is bought and sold

typically go through cycles where they

reach a peak -- the economy is at its high -- and then

something happens and the economy's

contracts or recesses and

when it hits its lowest point we call that a trough.

at some point the economy begins to recover --

we call that recovery -- and

in recovery then we actually expand again

into a peak. this is this concept of

economic or business cycles and so you might hear

for its like prosperity to refer to a peak

or a recession where there is

not economic growth in fact instead there's economic decline --

or even sometimes a very severe recession.

you might hear the word depression. so those are examples

the economy and the different economic cycles

in which businesses have to operate.

I want to direct you here to a couple of links that can provide additional

information.

first we're gonna go to the United States

Bureau of Labor Statistics and this tell us a little bit about the US economy

at a glance. you can look here at the unemployment rate and whether

more or fewer people are unemployed.

and there's even debate about whether

unemployment is the best thing to measure but will let it suffice to say

that

the more people that are employed

the more income they would have, and therefore the more

buying power they would have which would be better for products and services

marketed

at that time. just want to take you on a brief field trip to the US Bureau of

Labor Statistics.

another website that we're going to go to here

looks at

different economies and I think this this one is really interesting

because it measures GDP --

which is gross domestic product -- it's

the total value of all things produced by

an economy less some items. but basically it's

how much and economy is producing.

and it's interesting to note that in 2002

the United States still had the world's largest economy.

on this list the European Union is first but

the European Union is made up have many different country so if we separated

out Germany, France, United Kingdom

etc. from the European Union -- collectively those countries surpassed

the US GDP

but if you look at those countries separately they did not.

so the US still has a very large

GDP. but we hear a lot about China

and even now China is beyond behind the United States. So why do we hear so much

about the Chinese economy? that's because

if you look at the history of the Chinese economy you can see how they

have experienced

rapid rapid growth in recent history

while the US economy is growing much more slowly.

so if the Chinese economy continues to grow

at the pace at which it has, it will surpass the US

GDP or the US economy at some point

if we continue at the pace of economic growth that we are.

so the point that the slides is to just

show you a little bit about how the economy goes through cycles

and how that can affect the buying power

of consumers and their ability to purchase

products and services. let's talk about this concept

of consumer buying power a little bit. first of all,

a consumer who goes out and has a job and

makes money -- the amount that they make is called their gross

income. and of course they have to pay

income taxes in the US economy. so what is left

over after paying taxes that is used

for necessities -- things like

housing, basic food, clothing --

these are called disposable

income -- things that we truly

need ore bought with disposable

income. after we buy our necessities --

our true needs -- what is left over

is then what's called discretionary income.

so theoretically discretionary income

would be used to buy things that we

want but not necessarily things

that we need. now it's interesting that in

today's economy marketers have done an excellent job

of convincing you that many of the things that you simply

want you really need like

a cell phone for example. do you really need

a cell phone or a smartphone? or is it's just something

that you want? but disposable income is typically

used to buy what we would call basic

needs to sustain your life -- shelter,

food, basic clothing -- and discretionary income

then is what is left over that is used to buy your wants.

so my question to you now is which

are affected more by changes in the economy?

products that are purchased with disposable

income or products that are purchased

with discretionary income? and I'm going to give you a minute to think about that.

we know that

in A -- products that are purchased

with disposable income are things that supposedly

we what? "need" while

B products that are purchased with discretionary income

are supposedly products that we want.

so if the economy

changes a lot

either positively or negatively that means

that we can no longer buy things that we simply

want but we have to use that more

limited buying power to buy things that we need.

so the answer to the question would be that B --

items purchased with discretionary income --

are more affected by these

recessions and changes in the economic cycle.

having talked a little bit about

economic influences in the marketing environment,

let's move on and talk briefly about

technological influences in the marketing environment.

this first website that I'm going to

talks to you -- it's from advertising age --

about how US adults are now spending

more time on digital devices -- new technology --

than on watching television.

some might classify this as a social environmental changes well but

definitely this new technology

particularly all the --

technical

difficulties

here --

there's been

a surge in all this digital media has been

driven by mobile technology. so the point is you can see how new technology

affects what people are buying. the purchase

of things like smartphones, tablets and feature phones

is definitely growing while perhaps