Marketing Environment 1

THE MARKETING

ENVIRONMENT

Chapter Outline

1. The Company’s Microenvironment2. The Company’s Macroenvironemnt3. Responding to the Marketing

Environment

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The Marketing Environment

The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers

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The Marketing Environment

Marketing Environment

Microenvironment consists of the actors close to the company that affect its ability to serve its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics

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Actors in the Microenvironment

The Company’s Microenvironment

Marketing Environment

Macroenvironment consists of the larger societal forces that affect the microenvironment

• Demographic• Economic• Natural• Technological• Political• Cultural

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The Company’s Macroenvironment


• The Company• Suppliers• Marketing intermediaries• Customers• Competitors• Publics

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The Company

Internal environment includes:• Top management• Finance• R&D• Purchasing• Operations• Accounting

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Suppliers• Provide the resources to produce goods and

services• Treated as partners to provide customer value

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• Help the company to promote, sell, and distribute its products to final buyers

• Include:• Resellers• Physical distribution firms• Marketing services agencies• Financial intermediaries

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Marketing Intermediaries



Resellers are the distribution channel firms that help the company find customers or make sales to them

• Include:• Wholesalers• Retailers

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Physical distribution firms are the distribution channel firms that help the company to stock and move goods from their points of origin to their final destination

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Marketing service agencies are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets

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Financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods

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Customers

Customer markets consist of individuals and households that buy goods and services for personal consumption

Business markets buy goods and services for further processing or for use in their production process

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Customers

Reseller markets buy goods and services to resell at a profit

Government markets buy goods and services to produce public services or transfer goods and services to others who need them

International markets consist of buyers in other countries including consumers, producers, resellers, and governments

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Competitors

Firms must gain strategic advantage by positioning their offerings against competitors’ offerings

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Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives

• Financial publics• Media publics• Government publics• Citizen-action publics• Local publics• General public• Internal publics

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Publics


Publics

Financial publics influence the company’s ability to obtain funds—banks, investment houses, and stockholders

Media publics carry news, features, and editorial opinion—newspapers, magazines, and radio and television stations

Government publics influence product safety and truth in advertising

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Publics

Citizen-action publics include consumer organizations, environment groups, and minority groups

Local publics include neighborhood residents and community organizations

General publics influence the company’s public image

Internal publics include workers, managers, volunteers, and directors

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• Demographic environment• Economic environment• Natural environment• Technological environment• Political environment• Cultural environment

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Demographic Environment

Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics

Demographic environment is important because it involves people, and people make up markets

Demographic trends include age, family structure, geographic population shifts, educational characteristics, and population diversity

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Demographic EnvironmentChanging Age Structure of the Population

Generational marketing is important in segmenting people by lifestyle of life state instead of age

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Baby boomers include people born between 1946 and 1964

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Generation X includes people born between 1965 and 1976

• High divorce rates• Concerned about the environment• Respond to socially responsible companies• Less materialistic• Quality of life• Consumer organizations, environment groups, and minority

groups

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• Generation Y includes people born between 1977 and 2000

• Internet generation

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Demographic EnvironmentThe Changing American Family

More people are:• Divorcing or separating• Choosing not to marry• Choosing to marrying later• Marrying without intending to have children• Higher divorce rates• Increased number of working women• Stay-at-home dads

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• Trends include:• Migratory movements between and

within countries• Moving from rural to metropolitan

areas• Changes in where people work

• Telecommuting• Home office• Divorcing or separating

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Demographic EnvironmentGeographic Shifts in Population


Demographic EnvironmentChanges in the Workforce

Trends include:• More educated• More white collar• More professional

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Economic Environment

Economic environment consists of factors that affect consumer purchasing power and spending patterns

• Subsistence economies consume most of their own agriculture and industrial output

• Industrial economies are richer markets

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Economic EnvironmentChanges in Income

• Income distribution• Upper-class consumers• Middle-class consumers• Working-class consumers• Underclass consumers

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Economic EnvironmentChanges in Consumer Spending Patterns

Ernst Engel—Engel’s Law• As income rises:

• The percentage spent on food declines• The percentage spent on housing remains

constant• The percentage spent on savings increases

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Natural Environment

Natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities

• Trends• Shortages of raw materials• Increased pollution• Increased government intervention• Environmentally sustainable strategies

• Green marketing

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Technological Environment

Most dramatic force in changing the marketplace with many positive and negative effects

• Rapid change• Provides new markets and new opportunities

• Internet• Medicine• Weapons• Credit cards• Communication

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Political EnvironmentPolitical environment consists of laws,

government agencies, and pressure groups that influence or limit various organizations and individuals in a given society

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Political Environment

• Legislation regulating business• Public policy to guide commerce—sets of laws

and regulations that limit business for the good of society at large

• Increasing legislation• Protect companies• Protect consumers• Protect the interests of society

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Political EnvironmentIncreased Emphasis on Ethics and Socially Responsible Actions

Socially responsible behavior occurs when firms actively seek out ways to protect the long-term interests of their consumers and the environment

• Cause-related marketing

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Cultural EnvironmentCultural environment consists of institutions and

other forces that affect a society’s basic values, perceptions, and behaviors

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Cultural EnvironmentPersistence of Cultural Values

Core beliefs and values have a high degree of persistence, are passed on from parents to children, and are reinforced by schools, churches, businesses, and government

Secondary beliefs and values are more open to change

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Cultural EnvironmentShifts in Secondary Cultural Values

Major cultural values of a society are expressed in people’s view of:

• Themselves• Others • Organization• Society• Nature and the universe

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Responding to the Marketing Environment

Views on Responding

• Uncontrollable• Reacting and adapting to forces in the

environment• Proactive

• Taking aggressive actions to affect forces in the environment

• Reactive• Watching and reacting to forces in the

environment

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Documents

Marketing Environment 1