Learning Objectives Describe the environmental forces that affect

Learning Objectives • • • 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. Copyright © 2015 Pearson Education, Inc. 3 -2

Learning Objectives • • Explain the key changes in the political and cultural environments. Discuss how companies can react to the marketing environment. Copyright © 2015 Pearson Education, Inc. 3 -3

First Stop: Microsoft: Adapting to the Fast. Changing Digital Marketing Environment • The success of Windows increased Microsoft’s revenues, profits, and stock price. • A lag occurred after the millennium from decreased PC sales growth. • People moved on with new digital devices and technologies. • Transformation—released new, improved, or acquired digital products and services Copyright © 2015 Pearson Education, Inc. 3 -4

Marketing Environment • Outside forces that affect marketing management’s ability to build and maintain successful relationships with target customers • Microenvironment: Actors close to the company that affect its ability to serve its customers • Macroenvironment: Larger societal forces that affect the microenvironment Copyright © 2015 Pearson Education, Inc. 3 -5

Figure 3. 1 - Actors in the Microenvironment Copyright © 2015 Pearson Education, Inc. 3 -6

Figure 3. 2 - Major Forces in the Company’s Macroenvironment Copyright © 2015 Pearson Education, Inc. 3 -7

Demographic Environment • Demography: Study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics • Marketers analyze: • • Changing age and family structures Geographic population shifts Educational characteristics Population diversity Copyright © 2015 Pearson Education, Inc. 3 -8

Economic Environment • Economic factors that affect consumer purchasing power and spending patterns: • Industrial economies • Subsistence economies • Developing economies • Changes in consumer spending • Differences in income distribution Copyright © 2015 Pearson Education, Inc. 3 -9

Natural Environment • Physical environment and natural resources needed as inputs by marketers or affected by marketing activities • Environmental sustainability concerns have grown steadily over past three decades. • Trends: • Shortages of raw materials • Increased pollution • Increased government intervention Copyright © 2015 Pearson Education, Inc. 3 -10

Technological Environment • New technologies create new markets and opportunities. • Radio-frequency identification (RFID) is technology to track products through various points in the distribution channel. • Government agencies investigate and ban potentially unsafe products. Copyright © 2015 Pearson Education, Inc. 3 -11

Political Environment • Forces that influence and limit various organizations and individuals in a society • Laws, government agencies, and pressure groups • Goals of enacting business legislation: • Protect companies from each other • Protect consumers from unfair business practices • Protect the interests of society against unrestrained business behavior Copyright © 2015 Pearson Education, Inc. 3 -12

Major U. S. Legislation Affecting Marketing Legislation Purpose Sherman Antitrust Act (1890) • Prohibits monopolies and activities that restrain trade or competition in interstate commerce Federal Food and Drug Act (1906) Food and Drug Administration (FDA) • Forbids the manufacture or sale of adulterated or fraudulently labeled foods and drugs Clayton Act (1914) • Prohibits types of price discrimination, exclusive dealing, and tying clauses Federal Trade Commission Act (1914) • Monitors and remedies unfair trade Federal Trade Commission (FTC) methods Robinson-Patman Act (1936) • Establishes limits on quantity discounts • Forbids some brokerage allowances • Prohibits promotional allowances except when made on proportionately equal terms Copyright © 2015 Pearson Education, Inc. 3 -13

Major U. S. Legislation Affecting Marketing Legislation Purpose Wheeler-Lea Act (1938) • Makes deceptive, misleading, and unfair practices illegal • Places advertising of food and drugs under FTC jurisdiction Lanham Trademark Act (1946) • Protects and regulates distinctive brand names and trademarks National Traffic and Safety Act (1958) • Provides for the creation of compulsory safety standards for automobiles and tires Fair Packaging and Labeling Act • Provides for the regulation of the packaging and (1966) labeling of consumer goods • Requires that manufacturers state what the package contains, who made it, and how much it contains Child Protection Act (1966) • Bans the sale of hazardous toys and articles • Sets standards for child-resistant packaging Copyright © 2015 Pearson Education, Inc. 3 -14

Major U. S. Legislation Affecting Marketing Legislation Purpose Federal Cigarette Labeling and Advertising Act (1967) • Requires that cigarette packages contain a warning statement National Environmental Policy Act (1969) • Establishes a national policy on the environment Consumer Product Safety Act (1972) • Sets safety standards for consumer products Consumer Product Safety and exacts penalties for failing to uphold Commission (CPSC) those standards Magnuson-Moss Warranty Act (1975) • Determines rules for consumer warranties • Provides consumer access to redress Children’s Television Act (1990) • Limits the number of commercials aired during children’s programs Nutrition Labeling and Education Act • Requires that food product labels provide (1990) detailed nutritional information Copyright © 2015 Pearson Education, Inc. 3 -15

Major U. S. Legislation Affecting Marketing Legislation Purpose Telephone Consumer Protection Act (1991) • Establishes procedures to avoid unwanted telephone solicitations Americans with Disabilities Act (1991) • Makes discrimination against people with disabilities illegal Children’s Online Privacy Protection Act (2000) • Prohibits online collection of information from children without parental consent • Allows parents to review information collected from their children Do-Not-Call Implementation Act (2003) • Collects fees from telemarketers for the enforcement of a Do-Not-Call Registry CAN-SPAM Act (2003) • Regulates the distribution and content of unsolicited commercial e-mail Financial Reform Law (2010) Bureau of Consumer Financial Protection • Creates and enforces rules for the marketing of financial products to consumers Copyright © 2015 Pearson Education, Inc. 3 -16

Socially Responsible Behavior • Socially responsible companies actively seek out ways to protect the long-run interests of consumers and the environment. • Companies develop policies, guidelines, and other responses to complex social responsibility issues. Copyright © 2015 Pearson Education, Inc. 3 -17

Cause-Related Marketing • Used by companies to: • Exercise their social responsibility • Build more positive images • Primary form of corporate giving • Controversy—strategy for selling more than a strategy for giving Copyright © 2015 Pearson Education, Inc. 3 -18

Cultural Environment • Institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors • Society shapes people’s values and beliefs. • Cultural characteristics that affect marketing decision making: • Persistence of cultural values • Shifts in secondary cultural values Copyright © 2015 Pearson Education, Inc. 3 -19

Responding to the Marketing Environment • Reactive firms passively accept the marketing environment and do not try to change it. • Proactive firms develop strategies to change the environment. • They take aggressive actions to affect the publics and forces in their marketing environment. Copyright © 2015 Pearson Education, Inc. 3 -20

Learning Objectives • • • 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. Copyright © 2015 Pearson Education, Inc. 3 -21

Learning Objectives • • Explain the key changes in the political and cultural environments. Discuss how companies can react to the marketing environment. Copyright © 2015 Pearson Education, Inc. 3 -22

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