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3

The
Marketing Environment
Chapter Outline

1. The Company’s Microenvironment


2. The Company’s Macroenvironemnt
3. Responding to the Marketing
Environment

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The Marketing Environment

The marketing environment


includes the actors and forces outside
marketing that affect marketing
management’s ability to build and
maintain successful relationships with
customers

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The Marketing Environment

Marketing Environment

Microenvironment consists of the


actors close to the company that affect
its ability to serve its customers, the
company, suppliers, marketing
intermediaries, customer markets,
competitors, and publics

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The Company’s Microenvironment

Marketing Environment

Macroenvironment consists of the larger societal


forces that affect the microenvironment
• Demographic
• Economic
• Natural
• Technological
• Political
• Cultural

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The Company’s Microenvironment

• The Company
• Suppliers
• Marketing intermediaries
• Customers
• Competitors
• Publics

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The Company’s Microenvironment

The Company

Internal environment includes:


• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting

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The Company’s Microenvironment

Suppliers

• Provide the resources to produce


goods and services
• Treated as partners to provide
customer value

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The Company’s Microenvironment

Marketing Intermediaries
• Help the company to promote,
sell, and distribute its products
to final buyers
• Include:
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries

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The Company’s Microenvironment

Marketing Intermediaries

Resellers are the distribution channel


firms that help the company find
customers or make sales to them
• Include:
• Wholesalers
• Retailers

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The Company’s Microenvironment

Marketing Intermediaries

Physical distribution firms are the


distribution channel firms that help the
company to stock and move goods
from their points of origin to their final
destination

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The Company’s Microenvironment
Marketing Intermediaries

Marketing service agencies are the


marketing research firms, advertising
agencies, media firms, and marketing
consulting firms that help the company
target and promote its products to the
right markets

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The Company’s Microenvironment
Marketing Intermediaries

Financial intermediaries include banks,


credit companies, insurance
companies, and other businesses that
help finance transactions or insure
against the risks associated with the
buying and selling of goods

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The Company’s Microenvironment
Customers

Customer markets consist of individuals


and households that buy goods and
services for personal consumption

Business markets buy goods and


services for further processing or for
use in their production process

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The Company’s Microenvironment
Customers

Reseller markets buy goods and services to


resell at a profit

Government markets buy goods and services


to produce public services or transfer goods
and services to others who need them

International markets consist of buyers in


other countries including consumers,
producers, resellers, and governments

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The Company’s Microenvironment
Competitors

Firms must gain strategic advantage by


positioning their offerings against
competitors’ offerings

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The Company’s Microenvironment

Publics

Any group that has an actual or potential


interest in or impact on an organization’s
ability to achieve its objectives
• Financial publics
• Media publics
• Government publics
• Citizen-action publics
• Local publics
• General public
• Internal publics
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The Company’s Microenvironment
Publics

Financial publics influence the


company’s ability to obtain funds—
banks, investment houses, and
stockholders
Media publics carry news, features, and
editorial opinion—newspapers,
magazines, and radio and television
stations
Government publics influence product
safety and truth in advertising
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The Company’s Microenvironment

Publics

Citizen-action publics include consumer


organizations, environment groups, and
minority groups
Local publics include neighborhood residents
and community organizations
General publics influence the company’s public
image
Internal publics include workers, managers,
volunteers, and directors

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The Company’s Macroenvironment

• Demographic environment
• Economic environment
• Natural environment
• Technological environment
• Political environment
• Cultural environment

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The Company’s Macroenvironment

Demographic Environment

Demography is the study of human populations


in terms of size, density, location, age,
gender, race, occupation, and other statistics
Demographic environment is important
because it involves people, and people make
up markets
Demographic trends include age, family
structure, geographic population shifts,
educational characteristics, and population
diversity
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The Company’s Macroenvironment
Demographic Environment
Changing Age Structure of the Population

Generational marketing is
important in segmenting people
by lifestyle of life state instead of
age

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The Company’s Macroenvironment

Demographic Environment
Changing Age Structure of the Population

Baby boomers include people born


between 1946 and 1964
• Most affluent Americans

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The Company’s Macroenvironment
Demographic Environment
Changing Age Structure of the Population

Generation X includes people born between


1965 and 1976
• High divorce rates
• Concerned about the environment
• Respond to socially responsible companies
• Less materialistic
• Quality of life
• Consumer organizations, environment groups, and
minority groups

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The Company’s Macroenvironment

Demographic Environment
Changing Age Structure of the Population

• Generation Y includes people


born between 1977 and 2000
• Internet generation

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The Company’s Macroenvironment

Demographic Environment
The Changing American Family

More people are:


• Divorcing or separating
• Choosing not to marry
• Choosing to marrying later
• Marrying without intending to have children
• Higher divorce rates
• Increased number of working women
• Stay-at-home dads

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The Company’s Macroenvironment

Demographic Environment
Geographic Shifts in Population

• Trends include:
• Migratory movements between and
within countries
• Moving from rural to metropolitan areas
• Changes in where people work
• Telecommuting
• Home office
• Divorcing or separating

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The Company’s Macroenvironment

Demographic Environment
Changes in the Workforce

Trends include:
• More educated
• More white collar
• More professional

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The Company’s Macroenvironment

Demographic Environment
Increasing Diversity

• Markets are becoming more diverse


• International
• National
• Trends Include:
• Ethnicity
• Gay and lesbian
• Disabled

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The Company’s Macroenvironment

Economic Environment

Economic environment consists of factors that affect


consumer purchasing power and spending patterns

• Subsistence economies consume most of their own


agriculture and industrial output

• Industrial economies are richer markets

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The Company’s Macroenvironment

Economic Environment
Changes in Income

Value marketing involves ways to offer


financially cautious buyers greater value
—the right combination of quality and
service at a fair price

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The Company’s Macroenvironment

Economic Environment
Changes in Income

• Income distribution
• Upper-class consumers
• Middle-class consumers
• Working-class consumers
• Underclass consumers

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The Company’s Macroenvironment

Economic Environment
Changes in Consumer Spending Patterns

Ernst Engel—Engel’s Law


• As income rises:
• The percentage spent on food declines
• The percentage spent on housing remains
constant
• The percentage spent on savings increases

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The Company’s Macroenvironment
Natural Environment

Natural environment involves the natural


resources that are needed as inputs by
marketers or that are affected by marketing
activities
• Trends
• Shortages of raw materials
• Increased pollution
• Increased government intervention
• Environmentally sustainable strategies
• Green marketing
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The Company’s Macroenvironment
Technological Environment

Most dramatic force in changing the marketplace


with many positive and negative effects
• Rapid change
• Provides new markets and new opportunities
• Internet
• Medicine
• Miniaturization
• Weapons
• Credit cards
• Communication

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The Company’s Macroenvironment
Political Environment

Political environment consists of laws,


government agencies, and pressure
groups that influence or limit various
organizations and individuals in a
given society

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The Company’s Macroenvironment
Political Environment

• Legislation regulating business


• Public policy to guide commerce—sets of
laws and regulations that limit business for
the good of society at large
• Increasing legislation
• Protect companies
• Protect consumers
• Protect the interests of society

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The Company’s Macroenvironment

Political Environment
Changing Government Agency Enforcement

• Federal Trade Commission


• Food and Drug Administration
• Federal Communications Commission
• Federal Energy Regulatory Commission
• Federal Aviation Administration
• Consumer Product Safety Commission
• Environmental Protection Agency

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The Company’s Macroenvironment

Political Environment
Increased Emphasis on Ethics and Socially Responsible
Actions

Socially responsible behavior occurs


when firms actively seek out ways to
protect the long-term interests of their
consumers and the environment
• Cause-related marketing

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The Company’s Macroenvironment

Cultural Environment

Cultural environment consists of


institutions and other forces that affect
a society’s basic values, perceptions,
and behaviors

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The Company’s Macroenvironment
Cultural Environment
Persistence of Cultural Values

Core beliefs and values have a high


degree of persistence, are passed on
from parents to children, and are
reinforced by schools, churches,
businesses, and government
Secondary beliefs and values are
more open to change
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The Company’s Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values

Major cultural values of a society are expressed


in people’s view of:
• Themselves
• Others
• Organization
• Society
• Nature and the universe

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The Company’s Microenvironment

Cultural Environment
Shifts in Secondary Cultural Values

• People’s view of themselves


• Yankelovich Monitor’s consumer segments:
• Do-It-Yourselfers—recent movers
• Adventurers
• People’s view of others

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The Company’s Macroenvironment

Cultural Environment
Shifts in Secondary Cultural Values

• People’s view of organizations


• People’s view of society
• Patriots defend it
• Reformers want to change it
• Malcontents want to leave it

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The Company’s Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values

• People’s view of nature


• Some feel ruled by it
• Some feel in harmony with it
• Some seek to master it
• People’s view of the universe
• Renewed interest in spirituality

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Responding to the Marketing
Environment
Views on Responding

• Uncontrollable
• Reacting and adapting to forces in the
environment
• Proactive
• Taking aggressive actions to affect forces
in the environment
• Reactive
• Watching and reacting to forces in the
environment

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