3
Principles of Marketing
The
Marketing Environment
Learning Objectives
After studying this chapter, you should be able to:
1.
Describe the environmental forces that affect the
company’s ability to serve its customers
2.
Explain how changes in the demographic and
economic environments affect marketing decisions
3.
Identify the major trends in the firm’s natural and
technological environments
4.
Explain the key changes in the political and cultural
environments
5.
Discuss how companies can react to the marketing
environment
3-2
Chapter Outline
1.
2.
3.
The Company’s Microenvironment
The Company’s Macroenvironemnt
Responding to the Marketing
Environment
3-3
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
3-4
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
3-5
The Company’s Microenvironment
Marketing Environment
Macroenvironment consists of the larger societal
forces that affect the microenvironment
•
Demographic
•
Economic
•
Natural
•
Technological
•
Political
•
Cultural
3-6
The Company’s Microenvironment
•
•
•
•
•
•
The Company
Suppliers
Marketing intermediaries
Customers
Competitors
Publics
3-7
The Company’s Microenvironment
The Company
Internal environment includes:
•
Top management
•
Finance
•
R&D
•
Purchasing
•
Operations
•
Accounting
3-8
The Company’s Microenvironment
Suppliers
•
•
Provide the resources to produce goods and
services
Treated as partners to provide customer
value
3-9
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
3-10
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
3-11
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
3-12
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
3-13
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
3-14
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
3-15
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
3-16
The Company’s Microenvironment
Competitors
Firms must gain strategic advantage by
positioning their offerings against
competitors’ offerings
3-17
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
3-18
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
3-19
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
3-20
The Company’s Macroenvironment
•
•
•
•
•
•
Demographic environment
Economic environment
Natural environment
Technological environment
Political environment
Cultural environment
3-21
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
3-22
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
3-23
The Company’s Macroenvironment
Demographic Environment
Changing Age Structure of the Population
Baby boomers include people born
between 1946 and 1964
•
Most affluent Americans
3-24
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
3-25
The Company’s Macroenvironment
Demographic Environment
Changing Age Structure of the Population
•
Generation Y includes people born
between 1977 and 2000
•
Internet generation
3-26
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
3-27
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
3-28
The Company’s Macroenvironment
Demographic Environment
Changes in the Workforce
Trends include:
•
More educated
•
More white collar
•
More professional
3-29
The Company’s Macroenvironment
Demographic Environment
Increasing Diversity
Markets are becoming more diverse
•
•
•
International
National
Trends Include:
•
•
•
•
Ethnicity
Gay and lesbian
Disabled
3-30
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
3-31
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
3-32
The Company’s Macroenvironment
Economic Environment
Changes in Income
•
Income distribution
•
•
•
•
Upper-class consumers
Middle-class consumers
Working-class consumers
Underclass consumers
3-33
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
3-34
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
3-35
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
3-37
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
3-38
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
3-39
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
3-40
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
3-41
The Company’s Macroenvironment
Cultural Environment
Cultural environment consists of institutions
and other forces that affect a society’s basic
values, perceptions, and behaviors
3-42
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
3-43
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
3-44
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
3-45
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
3-46
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
3-47
Responding to the Marketing
Environment
Views on Responding
•
Uncontrollable
•
•
Proactive
•
•
Reacting and adapting to forces in the
environment
Taking aggressive actions to affect forces in the
environment
Reactive
•
Watching and reacting to forces in the
environment
3-48