The Marketing Environment

1
Chapter 4

• The Marketing Environment

2
Road Map Previewing the Concepts

• Describe the environmental forces that affect the
  companys ability to serve its customers.
• Explain how changes in the demographic and
  economic environments affect marketing decisions.
• Identify the major trends in the firms natural
  and technological environments.
• Explain the key changes in the political and
  cultural environments.
• Discuss how companies can react to the marketing
  environment.

3
Marketing Environment

• Marketing Environment- consists of the actors and
  forces outside marketing that affect marketing
  managements ability to develop and maintain
  successful relationships with its target
  customers.
• Includes
• Microenvironment - forces close to the company
  that affect its ability to serve its customers.
• Macroenvironment - larger societal forces that
  affect the microenvironment.

4
Companys Internal Environment (Fig. 4-1)
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The Companys Microenvironment

• Companys Internal Environment
• areas inside a company top management,
• affect the marketing departments plans
• Suppliers
• provide resources needed to produce goods and
  services,
• important link in the value delivery system
• Marketing Intermediaries
• help the company to promote, sell, and distribute
  its goods to final buyers i.e. resellers

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The Companys Microenvironment

• Customers
• five types of markets that purchase a companys
  goods and services
• Competitors
• those who serve a target market with similar
  products and services,
• company must gain strategic advantage against
  these organizations
• Publics
• group that has an interest in or impact on an
  organization's ability to achieve its objectives

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Types of Customer Markets (Fig. 4-2)
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Types of Publics (Fig. 4-3)
9
The Companys Macroenvironment (Fig. 4-4)
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The Companys Macroenvironment

• Demographic
• studies populations in terms of size, density,
  location, age, gender, race, occupation and other
  statistics.
• Economic
• factors that affect consumer purchasing power and
  spending patterns.
• Natural -
• natural resources needed as inputs by marketers
  or that are affected by marketing activities.

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Key U.S.Demographic Trends
Changing Age Structure Population contains 7
generational groups
Changing American Family Later (or no) marriage,
fewer children, working women, and nontraditional
households
Geographic Shifts Shifted to the Sunbelt,
suburbs, micropolitan areas
Better-Educated More White-Collar Increased
college attendance (up 9 in 20 years) and
white-collar workers
Increasing Diversity Ethnic heritage, gays
lesbians, disabled people
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Changing Age Structure
Baby Boomer Generation

(78 million people born 1946-1964)
One of the most powerful forces
shaping the marketing environment, 28 of
population
Generation X
(45 million people born 1965-1976)
More skeptical, savvy shoppers, respond to
honesty in advertising, share cultural concerns
Generation Y

(72 million people born 1977-1994)
Fluent and comfortable with technology, smart,
aware, fair-minded (N-Gens)
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Changing American Family

• 58 of all women 16 and older are working or
  looking for a job.
• Many marketers of tires, cars, insurance, travel
  and financial services target these women.
• http//www.ml.com/

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Interactive Student Assignments

• Form small groups to discuss the following
  questions.
• With respect to the seven U.S. generations (Fig.
  4-5), which generation are you in?
• How would you describe your generation?
• If you were going to attempt to sell to the older
  baby boomer generation, what would be a key to
  selling successfully to this generational group?

15
Economic Environment

• Changes in Income
• 1980s consumption frenzy
• 1990s squeezed consumer
• 2000s value marketing
• Income Distribution
• Upper class
• Middle class
• Working class
• Underclass

• Changing Consumer Spending Patterns
• Engels laws -Consumers at different income
  levels have different spending patterns

16
Natural Environment
Shortages of Raw Materials
Factors Affecting the Natural Environment
Environmentally Sustainable Strategies
Increased Pollution
Increased Government Intervention
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The Companys Macroenvironment

• Technological
• Most dramatic force now shaping our destiny.
• Political
• laws, government agencies, and pressure groups
  that influence and limit organizations and
  individuals in a given society.
• Cultural
• institutions and other forces that affect a
  societys basic values, perceptions, preferences,
  and behaviors.

18
Technological Environment

• Changes rapidly
• Creates new markets and opportunities
• Challenge to make practical, affordable products
• Safety regulations result in higher research costs

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Discussion Questions

• Which technological force will impact marketing
  the most in the near future?
• What technological force has impacted you the
  most? Comment.

20
Political Environment
Includes Laws, Government Agencies, Etc. that
Influence Limit Organizations/Individuals in a
Given Society
Increasing Legislation
Changing Government Agency Enforcement
Increased Emphasis on Ethics Socially Responsibl
e Actions
21
Cultural Environment

• Yankelovick Monitor has identified eight major
  consumer value themes
• Paradox
• Trust not
• Go it alone
• Smarts really count
• No sacrifices
• Stress hard to beat
• Reciprocity is the way to go
• Me 2

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Cultural Environment

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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.
• How? Hire lobbyists , run advertorials, press
  law suits, file complaints, and form agreements.

24
Rest Stop Reviewing the Concepts

• Describe the environmental forces that affect the
  companys ability to serve its customers.
• Explain how changes in the demographic and
  economic environments affect marketing decisions.
• Identify the major trends in the firms natural
  and technological environments.
• Explain the key changes in the political and
  cultural environments.
• Discuss how companies can react to the marketing
  environment.