Chapter 3 The Marketing Environment 1 Marketing Environment

Chapter 3 The Marketing Environment 1

Marketing Environment- consists of the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers. Includes: n n Microenvironment - forces close to the company that affect its ability to serve its customers. Macroenvironment - larger societal forces that affect the microenvironment. 2

The Company’s Microenvironment Company’s Internal Environment- functional areas inside a company that have an impact on the marketing department’s plans. Suppliers - provide the resources needed to produce goods and services and are an 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. 3

Company’s Internal Environment (Fig. 3. 1) 4

The Company’s Microenvironment Customers - five types of markets that purchase a company’s goods and services. Competitors - those who serve a target market with similar products and services against whom a company must gain strategic advantage. Publics - any group that perceives itself having an interest in a company’s ability to achieve its objectives. 5

Types of Customer Markets (Fig. 3. 2) Reseller Markets Gov ern Mar me nt ket s l na tio na ts ter ke In Mar Co nsu Ma me rke r ts ss e in ts s Bu rke Ma Company 6

Types of Publics (Fig. 3. 3) Lo Pu cal bli cs l ra ne ic Ge ubl P Company rnal Inte lics Pub Financia l Publics P Med ub ia lics nt e m n r ve lics o G Pub Citizen Action Publics 7

Major Forces in the Company’s Macroenvironment (Fig. 3. 4) 8

The Company’s 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. 9

Key U. S. Demographic Trends Changing Age Structure Population is aging; many divisions Changing American Family Later marriage, fewer children, working women, and nontraditional households Geographic Shifts Moving to the Sunbelt, suburbs, “micropolitan areas” Better-Educated & More White-Collar Increased college attendance and white-collar workers Increasing Diversity 72% Caucasian, 13% African-American, 11% Hispanic & 3% Asian 10

Age Distribution of the U. S. Population 8 million people born 1946 -1964) One of the most powerful forces shaping the marketing environment, 30% of population (45 million people born 1965 -1976) More skeptical, cynical of frivolous marketing pitches promising easy success 2 million people born 1977 -1994) Fluent and comfortable with computer, digital, and Internet technology (Net-Gens) 11

Discussion Connections Form small groups to identify a company that has done a good job of reacting to: n n n Baby Boomers, or Generation X, or Echo Boomers What did the company do well? Compare this company to one that has done a poor job. What did they do poorly? 12

Economic Environment Econo mic Develo pment Chang es in Incom e: Value Changi Marketi ng ng Consu mer Spendi ng Key Economic Concerns for Marketers 13

Natural Environment Shortages of Raw Materials Environmentally Sustainable Strategies Factors Affecting the Natural Environment Governmental Intervention Increased Pollution 14

The Company’s Macroenvironment Technological - forces that create new technologies, creating new product and market opportunities. Political - laws, agencies and pressure groups that influence and limit organizations and individuals in a given society. Cultural - institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors. 15

Technological Environment Faster pace of technological change; products are outdated at a rapid pace. Almost unlimited opportunities being developed daily in health care, space industry, robotics, and bio-genetic field. Challenge is not only technical, but also commercial – make practical, affordable versions of products. Increased regulation concerning product safety, individual privacy, and other areas that affect technological changes. 16

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 Responsible Actions 17

Cultural Environment People’s View of Themselves People’s View of Others the Universe Cultural Values of a People’s View of Society People’s View of Nature Organizations People’s View of Society 18

Responding to the Marketing 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. n How? Hire lobbyists , run “advertorials”, press law suits, file complaints, and form agreements. n 19

Review of Concept Connections 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. 20