Marketing Environment
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The Company’s Microenvironment
The Company’s Macroenvironment
Responding to the Marketing Environment
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1. The Company’s Microenvironment
Marketing Environment
•A
company’s marketing environment consists of the actors and
forces outside marketing that affect marketing management’s ability
to build and maintain successful relationships with target customers.
•The
microenvironment consists of the actors close to the company
that affect its ability to service its customers.
•The
macroenvironment consists of larger societal forces that affect
the microenvironment.
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1. The Company’s Microenvironment
Actors in the Microenvironment
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1. The Company’s Microenvironment
The Company
Top management
Finance
R&D
Purchasing
All the interrelated
groups form the
internal environment.
All groups should work
in harmony to provide
superior customer
value and relationships
Operations
Accounting
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1. The Company’s Microenvironment
Suppliers
Suppliers provide the
resources needed by the
company to produce its goods
and services.
Marketing managers must
watch supply availability—
supply shortages or delays,
labor strikes, and other events
that can cost sales in the short
run and damage customer
satisfaction in the long run.
Marketing managers also
monitor the price trends of their
key inputs.
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1. The Company’s Microenvironment
Marketing Intermediaries
Marketing intermediaries
help the company to
promote, sell, and distribute
its products to final buyers.
Marketers recognize the
importance of working with
their intermediaries as
partners rather than simply
as channels through which
they sell their products.
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1. The Company’s Microenvironment
Marketing Intermediaries
Resellers are distribution channel firms that help the company find
customers or make sales to them. These include wholesalers and
retailers.
Physical distribution firms help the company to stock and move
goods from their points of origin to their destinations.
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1. The Company’s Microenvironment
Marketing Intermediaries
Marketing services 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.
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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1. The Company’s Microenvironment
Customers
The company may target any or all of these five customer markets.
•Consumer
markets: 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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1. The Company’s Microenvironment
Customers
•Reseller
markets: buy goods and services to resell at a profit.
•Government
markets: made up of government agencies that buy
goods and services to produce public services.
•International
markets: buyers in other countries, including
consumers, producers, resellers, and governments.
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1. The Company’s Microenvironment
Competitors
Marketers must gain strategic advantage by positioning their offerings
strongly against competitors’ offerings in the minds of consumers.
No single competitive marketing strategy is best for all companies.
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1. The Company’s Microenvironment
Publics
A public is any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its objectives.
•Financial
•Media
publics influence the company’s ability to obtain funds.
publics carry news, features, and editorial opinions.
•Government
publics. Management must take government
developments into account.
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1. The Company’s Microenvironment
Publics
•Local
publics include neighborhood residents and community
organizations.
•General
public. The general public’s image of the company affects its
buying.
•Internal
publics include workers, managers, volunteers, and the
board of directors.
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2. The Company’s Macroenvironment
Major Forces in the Company’s Macroenvironment
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2. The Company’s Macroenvironment
Demographics
•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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2. The Company’s Macroenvironment
The Demographic Environment
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2. The Company’s Macroenvironment
Changing Age Structure of the Population
In general, the three largest age groups are the baby boomers,
Generation X, and Millennials.
The Baby Boomers
Baby boomers are people born post–World War II between 1946 and
1964.
Generation X
This is the generation of people born between 1965 and 1976. They are
called Generation X because they lie in the shadow of the boomers.
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2. The Company’s Macroenvironment
Generation Y
The Millennials (or Generation Y)
are born between 1977 and 2000.
These are children of the baby boomers.
The echo boom has created a large
teen and young adult market.
The keitai, or mobile phone, is the most common
technological object in modern Japan, used by
many Japanese youths as a daily communicating
device in their lives.
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2. The Company’s Macroenvironment
Generational marketing is
important in segmenting people by
lifestyle of life state instead of age.
Question: Do marketers need to
create separate products and
marketing programs for each
generation?
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2. The Company’s Macroenvironment
Geographic Shifts in Population
• In 2008, the world had, for the first time, more of its population living
in towns and cities than in the rural areas.
• In Asia, there is a migration from rural to urban cities.
• A major trend emerging from this urban migration is a growing number
of single-person households.
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2. The Company’s Macroenvironment
A Better-Educated, More White-Collar More Professional
Population
•The world population is becoming better educated.
•The rising number of educated people will increase the demand for
quality products, books, magazines, travel, personal computers, and
Internet services.
•The workforce also is becoming more white-collar
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2. The Company’s Macroenvironment
Increasing Diversity
•Countries vary in their ethnic and racial makeup.
•At one extreme is Japan, where almost everyone is Japanese.
• At the other extreme is the U.S., with people from virtually all
nations.
• Marketers are facing increasingly diverse markets, both at home and
abroad, as their operations become more international in scope.
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2. The Company’s Macroenvironment
Economic Environment
Consists of factors that affect consumer purchasing power and spending
patterns.
• Industrial economies are richer markets
• Subsistence economies consume most of their own agriculture and
industrial output
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2. The Company’s Macroenvironment
Changes in Income
•Marketers should pay attention to income distribution as well as
average income.
•At the top are upper-class consumers whose spending patterns are
not affected by current economic events and who are a major market
for luxury goods.
•There is a comfortable middle class that is somewhat careful about
its spending but can still afford the good life some of the time.
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2. The Company’s Macroenvironment
Changes in Income
• The working class must stick close to the basics of food, clothing, and
shelter and must try hard to save.
• Finally, the underclass (persons on welfare and many retirees) must
count their pennies when making even the most basic purchases.
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2. The Company’s Macroenvironment
Changing Consumer Spending Patterns
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Food, housing, and transportation take up the bulk of household
incomes.
•
However, consumers at different income levels have different
spending patterns.
•
As family income rises, the percentage spent on food declines, the
percentage spent on housing remains about constant (except for
utilities such as gas, electricity, and public services, which
decrease), and both the percentage spent on most other
categories and that devoted to savings increase.
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2. The Company’s Macroenvironment
Natural environment
Involves the natural resources that are needed as inputs by marketers or
that are affected by marketing activities.
Trends include shortages of raw materials, increased pollution, increased
government intervention and a greater attention to environmentally
sustainable strategies.
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2. The Company’s Macroenvironment
The Natural environment
• Companies are recognizing the link between a healthy ecology and a
healthy economy.
• They are learning that environmentally responsible actions can also
be good for business.
• Indeed, a new measure consumers use to evaluate businesses is their
commitment to environmental sustainability.
• Essentially, companies should not take away more than what they
add to the world’s resources and environment.
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2. The Company’s Macroenvironment
Technological Environment
Technology is the
most dramatic force
in changing the
marketplace. It
creates new
products and
opportunities, and
kills off older
products.
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2. The Company’s Macroenvironment
The Technological Environment
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2. The Company’s Macroenvironment
Political/Legal Environment
Political environment
laws, government
agencies, and pressure
groups that influence or
limit various organizations
and individuals in a given
society
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2. The Company’s Macroenvironment
The Political Environment
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2. The Company’s Macroenvironment
Legislation Regulating Businesses
Business legislation has three main purposes:
a)to protect companies from unfair competition
b)to protect consumers from unfair business practices, and
c)to protect the interests of society from unbridled business behaviour
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2. The Company’s Macroenvironment
Counterfeit Products
The popularity of counterfeit
brands in Asia has proven to be a
growing problem for companies.
Purses and bags like these are
easily available in markets in Asia.
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2. The Company’s Macroenvironment
Legislation Regulating Businesses
Resembling a
combination of Google
and Baidu, Goojje is
Shanghai’s imitation of
Google to compete
against the world’s
leading search engine.
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2. The Company’s Macroenvironment
Socially Responsible Behaviour
• Enlightened companies encourage their managers to look
beyond what the regulatory system allows and simply “do the
right thing.”
• These socially responsible firms actively seek out ways to
protect the long-run interests of their consumers and the
environment.
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2. The Company’s Macroenvironment
Cause Related Marketing
To exercise their social responsibility
and build more positive images,
companies are linking themselves
to worthwhile causes.
Cause-related marketing – The Pepsi Refresh
Project is awarding $20 million in grants to fund
hundreds of worthwhile ideas by individuals and
communities that will “refresh the world.
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2. The Company’s Macroenvironment
Cultural Environment
• Cultural environment consists of institutions and other forces that
affect a society’s basic values, perceptions, and behaviors
• People grow up in a particular society that shapes their basic beliefs and
values.
• They absorb a world view that defines their relationships with others
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2. The Company’s Macroenvironment
The Cultural Environment
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2. The Company’s Macroenvironment
Persistence of Cultural Values
• Core beliefs and values persist because they are passed on from
parents to children and are reinforced by schools, churches,
business, and government.
• Secondary beliefs and values are more open to change.
• Marketers want to predict cultural shifts in order to spot new
opportunities or threats.
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2. The Company’s Macroenvironment
Shifts in Secondary Core Values
Previously a communist country, Christmas is
celebrated commercially in China even though
Christianity is not one of the country’s main
religions.
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2. The Company’s Macroenvironment
Major Cultural Values are expressed in terms of…
• People’s view of themselves
- People vary in their emphasis on serving themselves versus serving
others.
• People’s view of others
- More “cocooning” – staying home, home cooked meals
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2. The Company’s Macroenvironment
Major Cultural Values are expressed in terms of…
• People’s view of organizations
- Decline of loyalty toward companies
• People’s view of society
- Patriots defend it
- Reformers want to change it
- Malcontents want to leave it
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2. The Company’s Macroenvironment
Major Cultural Values are expressed in terms of…
• 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
- Developed more permanent value
 family, community, earth, faith, ethics
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3. Responding to the Marketing Environment
Many companies think the marketing environment is an uncontrollable
element to which they have to adapt.
Other companies take an environmental management perspective
to affect the publics and forces in their environment.
Marketing managers should take a proactive rather than reactive
approach to the marketing environment.
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3. Responding to the Marketing Environment
UNCONTROLLABLE
React and adapt
to forces in the
environment
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PROACTIVE
Aggressive
actions to affect
forces in the
environment
REACTIVE
Watching and
reacting to
forces in the
environment
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