Principles of Marketing The Marketing Environment Kotler on

Principles of Marketing The Marketing Environment

Kotler on Marketing Today you have to run faster to stay in place.

The Marketing Process

Learning Objectives • Define the meaning and scope of the marketing environment • Consider the factors in the marketing environment and their effect on marketing planning and management • Examine the challenges of the marketing environment and how marketers respond to these

The Marketing Environment • The factors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.

The Microenvironment • The actors close to the company that affect its ability to serve its customers - the company, suppliers, marketing intermediaries, customer markets, competitors, and publics. o Internal environment o Suppliers o Marketing intermediaries o Customers o Competitors o Publics

Company’s internal environment R&D Purchasing Finance Top management Manufacturing Marketing Accounting

Intermediaries • Firms that help the company to promote, sell, and distribute its goods to final buyers. o o Resellers Distribution firms Marketing service agencies Financial intermediaries

Competitors • Budget competitors o It is not only important to focus on your direct competitors, but also all marketers that target your customers and therefore compete with you for their income. • Substitute competitors • Brand competitors o Direct competition, category competition

Customers • Consumer markets • Business markets • Reseller markets • Government markets • International markets

Publics • Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. o Financial publics which affect the company’s ability to obtain funds. o Media publics which carry news, features and editorial opinion for or against the company.

Publics o Government publics o Citizen-action publics: interest groups o Local publics o General publics (perceived image) o Internal publics: the company’s employees and managers

Porter’s 5 Competitive Forces New entrants Threat of New Entrants Suppliers Bargaining Power of Suppliers Industry Competitors Threat of Substitutes Bargaining Power of Buyers

Macroenvironment • The larger societal forces that affect the microenvironment. o o o Demographic Economic Natural Technological Political Cultural Attention: macroenvironments influence not only companies, but also marketing micro environments

Demographic Environment • • the number and quality of the population Changing age structure of the population The changing family Geographic shifts in population A better-educated and more white-collar population Increasing diversity ………

Economic Environment • Factors that affect supply and demand patterns. o GDP growth rate, unemployment rate, inflation rate, interest rate, exchange rate, income growth rate, Global challenges of integration (EU) or expansion (BRIC) • Rich richer, poor even poorer o Business life cycles • Prosperity Recession Depression Recovery • Some academic terms: o o nominal income vs. real income disposable personal income discretionary income Engel ratio

Natural Environment • Natural resources that are needed as inputs by marketers or that are affected by marketing activities. • Three trends in the natural environment o Shortages of raw materials o Increased pollution o Increased government intervention

Technological Environment • Forces that create new technologies, creating new product and market opportunities. o Positive results • Transportation methods, Internet & information technology -- retailing • Inventory control systems, etc. o Negative results • Unemployment • Misuse of information, etc.

Political Environment • Laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society. o Increasing legislation & regulation (tobacco industry) o Emphasis on business ethics and social responsibility

Cultural Environment • Institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors. o Values • Core values vs. secondary values o Custom o Taboos

Analyze the Marketing Environment • SWOT Analysis Strengths • • • What does the company do well? Is the company strong in its market? Does the company have a strong sense of purpose and the culture to support that purpose? Weaknesses • • • Threats Opportunities • • • Are industry trends moving upward? Do new markets exist for the company's products/services? Are there new technologies that the company can exploit? What does the company do poorly? What problems could be avoided? Does the company have serious financial liabilities? • • • What are the competitors doing well? What obstacles does the company face? Are there troubling changes in the company's business environment (technologies, laws, and regulations)?

Analyze the Marketing Environment • Dell’s SWOT analysis Strengths • Sell directly to consumers • Keep costs below competitors' costs Weaknesses • Opportunities • • • Consumer desire for one-stop shopping Consumers know what they want to buy Internet could be a powerful marketing tool No Strong relationships with computer retailers Threats • • Competitors have stronger brand names Competitors have strong relationships with computer retailers

Environmental Responses • Reactive response: Change your marketing mix in response to environmental changes. • Proactive response: Try to change the environment.

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