Chapter 3
The Marketing Environment
Professor Marshall
Queens College
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 to the company.
Marketing intelligence and research used
to collect information about the
environment.
Marketing Environment
Includes:
– Microenvironment: actors close to the
company that affect its ability to serve its
customers. (suppliers, marketing intermediaries, competitors)
– Macroenvironment: larger societal forces that
affect the microenvironment. (demographic, economic,
political)
Beyond the control of the organization.
The Company’s Microenvironment
Company’s Internal Environment:
– Areas inside a company.
– Affects the marketing department’s
planning strategies.
– All departments must “think consumer”
and work together to provide superior
customer value and satisfaction.
The Company’s Microenvironment
Suppliers:
– Provide resources needed to produce goods
and services.
– Important link in the “value delivery system.”
– Most marketers treat suppliers like partners.
The Company’s Microenvironment
Customers:
– Five types of markets that purchase a
company’s goods and services
Markets Include:
– Consumer
– Business
– Reseller
– Government
– International
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
The Company’s Microenvironment
Publics:
– Group that has an interest in or impact on an
organization's ability to achieve its objectives
Publics Include:
•Financial
•Media
•Government
•Citizen-action
•Local
•General
•Internal
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.
Forces Include:
Demographic
Economic
Natural
Technological
Political
Cultural
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 changing age and family
structures, geographic population shifts,
educational characteristics, and population
diversity.
The Company’s Macroenvironment
The Seven U.S. Generations:
1.
2.
3.
4.
5.
6.
7.
GI Generation = born in or before 1930
Depression = 1931-1940
War Babies = 1941-1946
Baby Boomers = 1947-1965
Generation X = 1966-1977
Generation Y = 1978-1995
Millennials = 1996 or after
GI
9%
Millennials
8%
Generation Y
26%
Generation X
16%
Depression
7%
War Babies
6%
Baby
Boomers
28%
Changing American Family
Household makeup:
– Married couples with children = 34%, and
falling
– Married couples and people living with other
relatives = 22%
– Single parents = 12%
– Single persons and adult “live-togethers” =
32%
Geographic Shifts in Population
16% of U.S. residents move each year
General shift toward the Sunbelt states
City to suburb migration continues
More people moving to “micropolitan” areas
More people telecommute
Better Educated Population
1980:
– 69% of people over age 25 completed high
school
– 17% had completed college
2002:
– 84% of people over age 25 completed high
school
– 27% had completed college
More White-Collar Population
1950 – 1985:
– Proportion of white-collar workers increased from
41% to 54%
– Proportion of blue-collar workers declined from 47%
to 33%
– Proportion of service workers increased from 12% to
14%
1983 – 1999:
– Proportion of managers and professionals increased
from 23% to >30%
Increasing Diversity
U.S. is a “salad bowl”
– Various groups mixed together, each
retaining its ethnic and cultural differences
Increased marketing to:
– Gay and lesbian consumers
– People with disabilities
Economic Environment
Consists of factors that affect consumer
purchasing power and spending patterns.
Changes in Income
– 1980’s – consumption
frenzy
– 1990’s – “squeezed
consumer”
– 2000’s – value marketing
Income Distribution
–
–
–
–
Upper class
Middle class
Working class
Underclass
U
n
$5 der
,
$
$1 000 2,5
0, t o 00
$1 000 $ ...
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$2 000 $ 99 .....
0, to 12 .... ...
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5, to 7, 9.. ..
$3 000 $2 49 .....
0, to 2, 9.. ..
$3 000 $ 49 .....
5, to 27 9.. ..
$4 000 $3 ,49 .....
0, to 2, 9.. ..
$4 000 $3 49 .....
5, to 7, 9.. ..
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0, to 42 9.. ..
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5, to 7, 9.. ..
$6 000 $5 49 .....
0, to 2, 9.. ..
$6 000 $5 499 .....
5, to 7, ... ..
$7 000 $6 49 ....
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$7 000 $ 49 .....
5, to 67 9.. ..
$8 000 $7 ,49 .....
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5, to 7, 9.. ..
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0, to 82 9.. ..
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9 ..
$1 5,0 to 7,4 .....
00 00 $9 99 ....
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00 0 $9 99 ....
,0 to 7,4 ....
00 $1 9 ...
to 49 9... ..
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49 9. ..
,9 ....
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.
Number of Households
Income Distribution Source: 2003 Census
12,000
10,000
8,000
6,000
4,000
2,000
0
http://www.census.gov/prod/2004pubs/p60-226.pdf
Number of Households (source 2003 census)
over $75k
26%
$25k - $75k
45%
under $25k
29%
Natural Environment
Factors Impacting the Natural
Environment:
– Shortages of raw materials
– Increased pollution
– Increased government intervention
– Environmentally sustainable strategies
Technological Environment
Changes rapidly.
Creates new markets and opportunities.
Challenge is to make practical, affordable
products.
Safety regulations result in higher research
costs & longer time between
conceptualization and introduction of
product.
Political Environment
Includes Laws, Government Agencies, and
Pressure Groups that Influence or Limit
Various Organizations and Individuals In a
Given Society.
Areas of concern:
– Increasing legislation
– Changing government agency enforcement
– Increased emphasis on ethics and socially
responsible behavior
Cultural Environment
The institutions and other forces that affect a
society’s basic values, perceptions, preference,
and behaviors.
Core beliefs and values 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.
Cultural Environment
Society’s major cultural views are
expressed in people’s views of:
– Themselves
– Others
– Organizations
– Society
– Nature
– The universe
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” (ads that express an
editorial point of view)
– Pressing law suits
– Filing complaints
– Forming agreements to control channels
Video Case
Nike
(14 minutes)
Thoughts
Do you own Nike sneakers?
What is your perception of Nike as a
company?
Who is Nike targeting?
– Mission: http://www.nike.com/nikebiz/nikebiz.jhtml?page=4
http://www.nike.com/nikebiz/