Lecture Principles of Marketing - Chapter 3: The marketing environment

This chapter describe the environmental forces that affect the company’s ability to serve its customers, describe the environmental forces that affect the company’s ability to serve its customers, 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.

Chapter Three

The Marketing Environment

Roadmap: Previewing the Concepts

1 Describe the environmental forces that affect

the company’s ability to serve its customers.

2 Explain how changes in the demographic and

economic environments affect marketing

decisions.

3 Identify the major trends in the firm’s natural

and technological environments.

4 Explain the key changes in the political and

cultural environments.

5 Discuss how companies can react to the

 Faces shifting consumer

lifestyles and preferences

for healthier foods.

 Low ratings of food and

 Focus on core competency

of consistent products and reliable service.

 Offers upscale alternatives including McCafe and

Bistro Gourmet.

 Eliminates “supersize,”

Marketing Environment

 Consists of actors and forces outside the

organization that affect management’s ability

to build and maintain relationships with

target customers.

– Studying the environment allows marketers to

take advantage of opportunities as well as to

combat threats.

– Marketing intelligence and research are used to

collect information about the environment.

Marketing Environment

 Includes:

– Microenvironment: actors close to the

company that affect its ability to serve its customers.

– Macroenvironment: larger societal forces

that affect the microenvironment.

• Considered to be beyond the control of

The Microenvironment

 Company’s Internal Environment:

– Areas inside a company.

– Affects the marketing department’s

planning strategies.

– All departments must “think

consumer” and work together to

The Microenvironment

 Suppliers:

– Provide resources needed to produce

goods and services.

– Important link in the “value delivery

system.”

– Most marketers treat suppliers like

partners.

The Microenvironment

 Marketing intermediaries:

– Help the company to promote, sell, and

distribute its goods to final buyers

• Resellers

• Physical distribution firms

• Marketing services agencies

• Financial intermediaries

The Microenvironment

 Customers:

– Five types of markets that purchase a

company’s goods and services.

The Microenvironment

 Competitors:

– Those who serve a target market with

products and services that are viewed by consumers as being reasonable

substitutes.

– Company must gain strategic advantage

against these organizations.

 Publics:

– Any group that has an interest in or impact

on an organization's ability to achieve its objectives

The Macroenvironment

 The company and all of the other

actors operate in a larger

macroenvironment of forces that shape opportunities and pose threats to the

company.

Demographic Environment

 Demographics:

The study of human populations in

terms of size, density, location, age,

gender, race, occupation, and other

statistics.

– Marketers track changing age and family

structures, geographic population shifts,

Demographic Environment

 The changing age structure of the U.S population is the single most

important demographic trend.

– Baby boomers, Generation X, and

Generation Y are the key groups.

Demographic Environment

 Generation X :

– 45 million born between 1965 and 1976.

– Defined by shared experiences:

• Increasing divorce rates.

• More of their mothers employed.

• First generation of latchkey kids.

– Cynical of frivolous marketing pitches.

– Care about the environment.

Demographic Environment

 Generation Y:

– 72 million born between 1977 and 1994.

– Have large amount of disposable income – Comfortable with computer technology.

– Tend to be impatient and “Now-Oriented.” – Many product lines targeted at those who

are part of Generation Y:

Demographic Environment

 Geographic Shifts in Population:

– 14% of U.S residents move each year.

– General shift toward the Sunbelt states.

– City to suburb migration continues.

– More people moving to “micropolitan”

areas.

– More people telecommute.

Demographic Environment

 Greater White-Collar Population

– 1950 – 1985:

• White-collar workers increased from 41% to

54% while blue-collar workers decreased from 47% to 33%.

– 1983 – 1999:

• Professionals and managers increased from

23% to greater than 30%.

– 2002 – 2012:

Demographic Environment

 Increasing diversity:

– U.S is a “salad bowl” mixing together

various groups, each of which retains its ethnic and cultural differences.

• Ethnic segments are growing as a

percentage of the U.S population and growth is projected to continue.

– Increased marketing efforts towards:

• Gay and lesbian consumers

 Consists of factors that affect consumer

purchasing power and spending patterns.

Natural Environment

 Involves natural resources that are

needed as inputs by marketers or that are affected by marketing activities.

Technological Environment

 Most dramatic force shaping our destiny.

 Changes rapidly.

 Creates new markets and opportunities.

 Challenge is to make practical, affordable products.

 Safety regulations result in higher research costs and longer time between

Cultural Environment

 The institutions and other forces that affect a society’s basic values, perceptions,

preference, and behaviors.

– Core beliefs and values are passed on from

parents to children and are reinforced by

schools, churches, business, and government.

– Secondary beliefs and values are more open to

change.

Responding to the Marketing Environment

 Environmental Management

Perspective

– Taking a proactive approach to managing

the environment by taking aggressive

(rather than reactive) actions to affect the publics and forces in the marketing

environment.

Responding to the Marketing Environment

 Manage the environment by:

Rest Stop: Reviewing the Concepts

1 Describe the environmental forces that affect

the company’s ability to serve its customers.

2 Explain how changes in the demographic and

economic environments affect marketing

decisions.

3 Identify the major trends in the firm’s natural

and technological environments.

4 Explain the key changes in the political and

cultural environments.