The Marketing
Environment
1
Preview Case: McDonald’s –
Challenges and Reactions
 Challenges

Marketing Initiatives
Shifting consumer
lifestyles
 Low ratings of food and
service quality
 Atmosphere not upscale
 Image of being unclassy,
uncultured and uncool to
younger target markets

Focus on core competency of
consistent products and reliable
service
Upscale alternative including
“McCafe” and “Bistro Gourmet”
Healthier food options with
elimination of “supersize” and
introduction of Go Active! Adult
Happy Meal
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The Marketing Environment
Environment The actors
and forces outside marketing that
affect marketing management’s ability
to build and maintain successful
relationships with target customers
 Marketing
Marketing Environment

Marketing environment includes:
 Microenvironment
- actors close to the
company that affect its ability to serve its
customers.
 Macroenvironment - larger societal forces
that affect the microenvironment.
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics
 Marketing
must
consider other parts of
the organization
including finance, R&D,
purchasing, operations
and accounting
 Marketing decisions
must relate to broader
company goals and
strategies
Microenvironment Company’s Internal Environment
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics

Firms and individuals
providing resources to
the company and its
competitors to produce
goods and services.


Marketers must watch
supply availability and
price trends of key
inputs
Effective partnership
relationship
management with
suppliers is essential
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics
 Firms
that help the
company to promote, sell
and distribute goods to
final buyers
 Include resellers, physical
distribution firms,
marketing services
agencies and financial
intermediaries
 Effective partner
relationship management
is essential
Microenvironment –
Marketing Intermediaries




Resellers Distribution channel firms that help
the company to find customers or to make sales
to them.
Physical distribution firms Help the company
to stock and move goods from their origins to
their destinations
Marketing service agencies Help the company
target and promote its products such as
marketing research firms, ad agencies etc.
Financial intermediaries Help finance
transactions and insure against risks such as
banks, insurance companies
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics
 The
five types of
customer markets
 Consumer
 Business
 Reseller
 Government
 International
Microenvironment –
Customer Markets





Consumer markets Individuals & households
that buy goods & services for personal
consumption
Business markets Buy goods & services for
further processing in their production process
Resellers markets Buy goods & services in
order to resell them at a profit
Government markets Buy goods & services
in order to produce public services or transfer
them to those that need them
International markets Buyers of all types in
foreign countries
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics


Those who serve a target
market with similar
products/services
Conducting competitor
analysis is critical for
success of the firm


A marketer must monitor
its competitors’ offerings to
create strategic advantage
No single competitive
strategy is best for all
companies
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketing
intermediaries
4. Customers
5. Competitors
6. Publics
 A group
that has an
actual or potential
interest in or impact on
an organization
 Seven publics include:
 Financial
 Media
 Government
 Citizen-action
 Local
 General
 Internal
Macroenvironment
Macroenvironmental Forces
Demographic
 Economic
 Natural

Technological
 Political
 Social-Cultural

Demographic Environment

Demography
 The
study of human populations in terms of
size, density, location, age, gender, race,
occupation and other statistics
Demographic Environment
Worldwide Population Growth
Age Structure of the Population
Household Patterns
Geographical Shifts in Population
Educational Groups
Shift from Mass Market to Micromarkets
Ethnic Markets
Economic Environment
Economic
Development
Changes in Income:
Value Marketing
Changing Consumer
Spending Patterns
Key
Economic
Concerns for
Marketers
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
Technological Environment

Rapidly changing force which creates many new
marketing opportunities but also turns many existing
products extinct
 Faster
pace of technological change; products are
outdated at a rapid pace.
 Almost unlimited opportunities being developed daily in
health care, space industry, robotics, and bio-genetic
field.
 Challenge is not only technical, but also commercial –
make practical, affordable versions of products.
 Increased regulation concerning product safety,
individual privacy, and other areas that affect
technological changes.
Political Environment

Consists of laws, government agencies and
pressure groups that influence or limit various
organizations and individuals in a given society
 Legislation
affecting businesses worldwide has
increased
 Laws protect companies, consumers and the interests
of society
 Increased emphasis on socially responsible actions
Cultural Environment

Made up of institutions and other forces
that affect a society’s basic values,
perceptions, preferences and behaviors.
Cause-Related Marketing
Marketers create link between brand
and charitable organization
 Demonstrates social responsibility
 Helps build positive brand image

Cultural Environment Includes
people’s views of…
Themselves
 Identify with
brands for selfexpression
Others
 Recent shift from
“me” to “we”
society
Organizations
 Trend of decline in
trust and loyalty
to companies
Society
 Patriotism on the
rise
Nature
 “lifestyles of health
and sustainability”
consumer segment
Universe
 Includes religion
and spirituality
Responding to the Marketing
Environment

Environmental Management Perspective

Taking a proactive approach to managing the
microenvironment and the macroenvironment by taking
aggressive (rather than passive) actions to affect the publics
and forces in the marketing environment.

By hiring lobbyists, running advertorials, press law suits, file
complaints, and forming agreements.
“There are three kinds of companies: those who make things
happen, those who watch things happen, and those who
wonder what’s happened.”
The marketplace isn’t what it used to be…
Changing technology
Globalization
Deregulation
Privatization
Empowerment
Customization
Convergence
Disintermediation