3
The Marketing Environment
Marketing Environment
The marketing environment consists of actors
and forces outside the organization that affect
management’s ability to build and maintain
relationships with target customers.
• Environment offers both opportunities and threats.
• Marketing intelligence and research used to collect
information about the environment.
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The Company’s environment
• Company’s Internal Environment:
– Structure of company
– Culture
– Resources
• Companies External Environment
– Microenvironment:
actors close to the company that affect its
ability to serve its customers.
– Macro environment:
larger societal forces that affect the
microenvironment.
• Considered to be beyond the control of the organization.
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Marketing Environment
Micro
Environment
Demographic
Company
Cultural
Publics
Political
Company
Competitors
Economic
Suppliers
Customers
Natural
Intermediaries
Macro
Environment
Technological
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Actors in the Microenvironment
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The Company (Internal Marketing)
– 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
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The Company’s Microenvironment
• Suppliers:
– Provide resources needed
to produce goods and
services.
– Marketers must watch
supply availability and
pricing
– Important link in the “value
delivery system.”
– Most marketers treat
suppliers like partners.
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The Company’s Microenvironment
• Marketing Intermediaries:
– Help the company to promote, sell, and distribute
its goods to final buyers
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries
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Partnering With Intermediaries
Coca-Cola provides
Wendy’s with much
more than just soft
drinks. It also pledges
powerful marketing
support.
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The Company’s Microenvironment
• Customers:
– Five types of customer
markets that purchase a
company’s goods and
services
• Consumer
• Business
• Reseller
• Government
• International
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The Company’s Microenvironment
• Competitors:
– Those who serve a target market with products
and services that are viewed by consumers as
being reasonable substitutes
– Company must gain strategic advantage against
these organizations
– Conducting competitor analysis is critical for
success of the firm
– A marketer must monitor its competitors’ offerings
to create strategic advantage
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Publics
Group that has an interest in or impact on an
organization's ability to achieve its objectives
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The Macroenvironment
• The company and all of the other actors
operate in a larger macroenvironment of
forces that shape opportunities and pose
threats to the company.
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The Company’s Macroenvironment
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The Company’s Macroenvironment
• Demographic:
– The study of human populations in terms of size,
density, location, age, gender, race, occupation, and
other statistics.
– Marketers track changes with respect to
• Age and Generations
• House hold Patterns/ House hold makeup (FLCS)
• Population size and growth rate
• Geographic Shifts in Population
• Better Educated Population
• Ethnic mix.
• Increasing Diversity
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The Seven U.S. Generations
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Baby Boomers
• 78 million born between 1946 and 1964
• Account for 28% of population
• Earn more than half of all personal income
• Almost 25% belong to racial or ethnic minority
• Spend a lot on anti-aging products and
services
• Are likely to postpone retirement
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Generation X
• 45 million born between 1965 and 1976
• Defined by their shared experiences
– Increasing divorce rates
– More of their mothers employed
– First generation of latchkey kids
• Cynical of frivolous marketing pitches
• Care about the environment
• Prize experience, not acquisition
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Generation Y
• 72 million born between 1977 and 1994
• Have large amount of disposable income
• Comfortable with computer technology
• Tend to be impatient and “Now-Oriented”
• Many product lines targeted at Gen Ys
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Interactive Student
Assignment
• Pair with another student to discuss the
following questions:
– In what ways does the buying behavior of
you and your parents differ?
– In what ways does the buying behavior of
you and your grandparents differ?
– What selling strategies would work best for:
• You
• Your parents
• Your grandparents
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Diversity-Based Advertising
Based on careful study of cultural differences, Bank of America has
developed targeted advertising messages for different cultural
subgroups, here Asians and Hispanics.
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Economic Environment
Consists of factors that affect consumer purchasing
power and spending patterns. it includes
• Income
•
•
•
•
Savings
Gifts
Debt
Credit availability
• Changes in Income level
• Income Distribution
–
–
–
–
Upper class
Middle class
Working class
Underclass
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Income Distribution
Walt Disney markets two distinct Pooh bears to match its twotiered market.
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Natural Environment
• Involves
•
the
natural
resources that are needed as
inputs by marketers or that
are affected by marketing
activities.
Types of Resources
– Infinite resources (air and water)
– Finite
renewable
resources
(forest and food)
– Fininte nonrenueable resources
(Oil and minerals)
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Factors Impacting the Natural
Environment
Shortages of Raw Materials
Increased Pollution
Increased Government Intervention
Environmentally Sustainable Strategies
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Environmental Responsibility
McDonald’s has made a substantial commitment to the so-called
“green movement.”
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Technological Environment
• Most
dramatic
force now
shaping our
destiny.
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Technological Environment
• Changes rapidly.
• Creates new markets
•
•
and opportunities.
Challenge is to make
practical, affordable
products.
Safety regulations result
in higher research costs
and longer time between
conceptualization and
introduction of product.
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Discussion Questions
• Within the last ten years, which
technological force has had the greatest
impact on marketing? In what areas of
marketing has this impact been seen?
• What technological force has impacted
you the most? In what ways has this
occurred?
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Political Environment
Includes Laws,
Government
Agencies, and
Pressure Groups
that Influence or
Limit Various
Organizations and
Individuals In a
Given Society.
Increasing Legislation
Changing Government
Agency Enforcement
Increased Emphasis on Ethics
& Socially Responsible Actions
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Cultural Environment
• The institutions and other
•
forces that affect a society’s
basic values, Beliefs, Norms,
perceptions, preference,
and behaviors.
Types of beliefs
– Core beliefs
– Secondary beliefs
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Cultural Environment
Themselves
Society’s Major
Cultural Views Are
Expressed in
People’s Views of:
Others
Organizations
Society
Nature
The Universe
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Responding to the Marketing Environment
• Environmental Management Perspective
• Taking a proactive approach to managing the
environment by taking aggressive (rather than
reactive) actions to affect the publics and forces
in the marketing environment.
• This can be done by:
– Hiring lobbyists
– Running “advertorials”
– Pressing lawsuits
– Filing complaints
– Forming agreements to control channels
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Rest Stop: Reviewing the Concepts
• Describe the environmental forces that affect the
•
•
•
•
company’s ability to serve its customers.
Explain how changes in the demographic and
economic environments affect marketing
decisions.
Identify the major trends in the firm’s natural and
technological environments.
Explain the key changes in the political and
cultural environments.
Discuss how companies can react to the
marketing environment.
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How to scan the environment
• Value chain
• Porters five forces model
• SWOT analysis
• PEST analysis
• TOWS analysis
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