Arm Strong 03 Media

8/6/2019 Arm Strong 03 Media

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The Marketing EnvironmentThe Marketing Environment

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Describe the environmental forces that affect theDescribe the environmental forces that affect thecompanys ability to serve its customers.companys ability to serve its customers. Explain how changes in the demographic andExplain how changes in the demographic and

economic environments affect marketingeconomic environments affect marketing

decisions.decisions. Identify the major trends in the firms natural andIdentify the major trends in the firms natural and

technological environments.technological environments.

Explain the key changes in the political andExplain the key changes in the political and

cultural environments.cultural environments. Discuss how companies can react to the marketingDiscuss how companies can react to the marketing

environment.environment.

ROAD MAP: Previewing the ConceptsROAD MAP: Previewing the Concepts


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Marketing EnvironmentMarketing Environment

The marketing environment consists of actorsThe marketing environment consists of actorsand forces outside the organization that affectand forces outside the organization that affectmanagements ability to build and maintainmanagements ability to build and maintain

relationships with target customers.relationships with target customers. Environment offers both opportunities andEnvironment offers both opportunities and

threats.threats.

Marketing intelligence and research used toMarketing intelligence and research used tocollect information about the environment.collect information about the environment.


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Includes:Includes: Microenvironment: actors close to theMicroenvironment: actors close to the

company that affect its ability to serve itscompany that affect its ability to serve itscustomers.customers.

Macroenvironment: larger societal forces thatMacroenvironment: larger societal forces thataffect the microenvironment.affect the microenvironment.

Considered to be beyond the control of theConsidered to be beyond the control of theorganization.organization.

Marketing EnvironmentMarketing Environment


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The Companys MicroenvironmentThe Companys Microenvironment

Companys Internal Environment:Companys Internal Environment:AreasAreas insideinside a company.a company.

Affects the marketing departmentsAffects the marketing departments

planning strategies.planning strategies.

All departments must think consumer andAll departments must think consumer andwork together to provide superior customerwork together to provide superior customer

value and satisfaction.value and satisfaction.


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Actors in the MicroenvironmentActors in the Microenvironment


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Suppliers:Suppliers: Provide resourcesProvide resources

needed to produceneeded to producegoods and services.goods and services.

Important link in theImportant link in thevalue deliveryvalue deliverysystem.system.

Most marketers treatMost marketers treatsuppliers like partners.suppliers like partners.



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Marketing Intermediaries:Marketing Intermediaries:

Help the company to promote, sell, and distributeHelp the company to promote, sell, and distributeits goods to final buyersits goods to final buyers

ResellersResellers Physical distribution firmsPhysical distribution firms

Marketing services agenciesMarketing services agencies Financial intermediariesFinancial intermediaries


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Partnering With IntermediariesPartnering With Intermediaries

Coca-Cola provides

Wendys with muchmore than just softdrinks. It also pledgespowerful marketing

support.


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Customers:Customers: Five types ofFive types of

markets thatmarkets thatpurchase apurchase acompanys goodscompanys goodsand servicesand services



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Competitors:Competitors: Those who serve a target market with productsThose who serve a target market with products

and services that are viewed by consumers asand services that are viewed by consumers asbeing reasonable substitutesbeing reasonable substitutes

Company must gain strategic advantage againstCompany must gain strategic advantage againstthese organizationsthese organizations

Publics:Publics:

Group that has an interest in or impact on anGroup that has an interest in or impact on anorganization's ability to achieve its objectivesorganization's ability to achieve its objectives


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Types of PublicsTypes of Publics


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The MacroenvironmentThe Macroenvironment

The company and all of the other actorsThe company and all of the other actorsoperate in a larger macroenvironment ofoperate in a larger macroenvironment of

forces that shape opportunities and poseforces that shape opportunities and posethreats to the company.threats to the company.


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The Companys MacroenvironmentThe Companys Macroenvironment


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The Companys MacroenvironmentThe Companys Macroenvironment

Demographic:Demographic: The study of human populations in terms ofThe study of human populations in terms of

size, density, location, age, gender, race,size, density, location, age, gender, race,occupation, and other statistics.occupation, and other statistics.

Marketers track changing age and familyMarketers track changing age and familystructures, geographic population shifts,structures, geographic population shifts,

educational characteristics, and populationeducational characteristics, and populationdiversity.diversity.


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The Seven U.S. GenerationsThe Seven U.S. Generations


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Baby BoomersBaby Boomers

78 million born between 1946 and 196478 million born between 1946 and 1964Account for 28% of populationAccount for 28% of population

Earn more than half of all personal incomeEarn more than half of all personal incomeAlmost 25% belong to racial or ethnic minorityAlmost 25% belong to racial or ethnic minority Spend a lot on antiSpend a lot on anti--aging products andaging products and

servicesservicesAre likely to postpone retirementAre likely to postpone retirement


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Generation XGeneration X

45 million born between 1965 and 197645 million born between 1965 and 1976 Defined by their shared experiencesDefined by their shared experiences

Increasing divorce ratesIncreasing divorce rates

More of their mothers employedMore of their mothers employed

First generation of latchkey kidsFirst generation of latchkey kids

Cynical of frivolous marketing pitchesCynical of frivolous marketing pitches

Care about the environmentCare about the environment Prize experience, not acquisitionPrize experience, not acquisition


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Generation YGeneration Y

72 million born between 1977 and 199472 million born between 1977 and 1994 Have large amount of disposable incomeHave large amount of disposable income Comfortable with computer technologyComfortable with computer technology Tend to be impatient and NowTend to be impatient and Now--OrientedOriented Many product lines targeted at Gen YsMany product lines targeted at Gen Ys


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Pair with another student to discuss thePair with another student to discuss thefollowing questions:following questions:

In what ways does the buying behavior ofIn what ways does the buying behavior ofyou and your parents differ?you and your parents differ?

In what ways does the buying behavior ofIn what ways does the buying behavior ofyou and your grandparents differ?you and your grandparents differ?

What selling strategies would work best for:What selling strategies would work best for:

YouYouYour parentsYour parents

Your grandparentsYour grandparents

Interactive Student

Assignment


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Changing American FamilyChanging American Family

Household makeup:Household makeup: Married couples with children = 34%, and fallingMarried couples with children = 34%, and falling

Married couples and people living with otherMarried couples and people living with otherrelatives = 22%relatives = 22%

Single parents = 12%Single parents = 12%

Single persons and adult liveSingle persons and adult live--togethers = 32%togethers = 32%


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The Changing American FamilyThe Changing American Family

Non-family householdssingle live-alones or adultlive-togethers of one or bothsexesmake up a full 32percent of U.S. households.Todays marketers mustincorporate the likes of

Murphy Brown, Ally McBeal,and Will and Grace into theirbusiness plans.


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Geographic Shifts in PopulationGeographic Shifts in Population

16% of U.S. residents move each year16% of U.S. residents move each year General shift toward the Sunbelt statesGeneral shift toward the Sunbelt states City to suburb migration continuesCity to suburb migration continues More people moving to micropolitan areasMore people moving to micropolitan areas More people telecommuteMore people telecommute


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Better Educated PopulationBetter Educated Population

1980:1980: 69% of people over age 25 completed high69% of people over age 25 completed high

schoolschool

17% had completed college17% had completed college 2002:2002:

84% of people over age 25 completed high84% of people over age 25 completed highschoolschool

27% had completed college27% had completed college

Currently,Currently, of high school grads startof high school grads startcollegecollege


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More WhiteMore White--Collar PopulationCollar Population

19501950 1985:1985: Proportion of whiteProportion of white--collar workers increasedcollar workers increased

from 41% to 54%from 41% to 54%

Proportion of blueProportion of blue--collar workers decreasedcollar workers decreasedfrom 47% to 33%from 47% to 33%

Proportion of service workers increased fromProportion of service workers increased from

12% to 14%12% to 14% 19831983 1999:1999:

Proportion of managers and professionalsProportion of managers and professionalsincreased from 23% to >30%increased from 23% to >30%


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Increasing DiversityIncreasing Diversity

U.S. is a salad bowlU.S. is a salad bowl Various groups mixed together, each retainingVarious groups mixed together, each retaining

its ethnic and cultural differencesits ethnic and cultural differences

Increased marketing to:Increased marketing to: Gay and lesbian consumersGay and lesbian consumers

People with disabilitiesPeople with disabilities www.peapod.comwww.peapod.com


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DiversityDiversity--Based AdvertisingBased Advertising

Based on careful study of cultural differences, Bank of America hasdeveloped targeted advertising messages for different cultural

subgroups, here Asians and Hispanics.


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Economic EnvironmentEconomic Environment

Changes in IncomeChanges in Income 1980s1980s consumptionconsumption

frenzyfrenzy

1990s1990s squeezedsqueezed

consumerconsumer 2000s2000s value marketingvalue marketing

Income DistributionIncome Distribution Upper classUpper class

Middle classMiddle class

Working classWorking class

UnderclassUnderclass

Consists of factors that affect consumerpurchasing power and spending patterns.


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Income DistributionIncome Distribution

Walt Disney markets two distinct Pooh bears to match its two-tiered market.


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Natural EnvironmentNatural Environment

Involves the naturalInvolves the naturalresources that areresources that are

needed as inputs byneeded as inputs bymarketers or that aremarketers or that areaffected by marketingaffected by marketing

activities.activities.


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Factors Impacting the NaturalFactors Impacting the NaturalEnvironmentEnvironment

Shortages of Raw Materials

Increased Pollution

Increased Government Intervention

Environmentally Sustainable Strategies


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Environmental ResponsibilityEnvironmental Responsibility

McDonalds has made a substantial commitment to the so-calledgreen movement.


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Technological EnvironmentTechnological Environment

MostMost

dramaticdramaticforce nowforce nowshaping ourshaping our

destiny.destiny.


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Technological EnvironmentTechnological Environment

Changes rapidly.Changes rapidly. Creates new marketsCreates new markets

and opportunities.and opportunities.

Challenge is to makeChallenge is to makepractical, affordablepractical, affordableproducts.products.

Safety regulations resultSafety regulations resultin higher research costsin higher research costs

and longer time betweenand longer time betweenconceptualization andconceptualization andintroduction of product.introduction of product.


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Within the last ten years, whichWithin the last ten years, whichtechnological force has had the greatesttechnological force has had the greatest

impact on marketing? In what areas ofimpact on marketing? In what areas ofmarketing has this impact been seen?marketing has this impact been seen?

What technological force has impactedWhat technological force has impactedyou the most? In what ways has thisyou the most? In what ways has thisoccurred?occurred?

Discussion Questions


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Political EnvironmentPolitical Environment

Includes Laws,Government

Agencies, andPressure Groupsthat Influence orLimit VariousOrganizations andIndividuals In aGiven Society.

Increasing Legislation

Changing GovernmentAgency Enforcement

Increased Emphasis on Ethics& Socially Responsible Actions


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CauseCause--Related MarketingRelated Marketing

KitchenAid donates$50 to breast cancer

research for everypink mixer it sellsand encouragesconsumers to host a

Cook for the Curedinner party.


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Cultural EnvironmentCultural Environment

The institutionsThe institutionsand other forcesand other forces

that affect athat affect asocietys basicsocietys basicvalues,values,

perceptions,perceptions,preference, andpreference, andbehaviors.behaviors.


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Core beliefs and values are passed onCore beliefs and values are passed onfrom parents to children and arefrom parents to children and are

reinforced by schools, churches, business,reinforced by schools, churches, business,and government.and government.

Secondary beliefs and values are moreSecondary beliefs and values are more

open to change.open to change.


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Yankelovich Monitor has identified eightYankelovich Monitor has identified eightmajor consumer value themes:major consumer value themes:1.1. ParadoxParadox

2.2. Trust notTrust not

3.3. Go it aloneGo it alone

4.4. Smarts really countSmarts really count

5.5. No sacrificesNo sacrifices

6.6. Stress hard to beatStress hard to beat7.7. Reciprocity is the way to goReciprocity is the way to go

8.8. Me 2Me 2

www.yankelovich.comwww.yankelovich.com


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ThemselvesThemselves

OthersOthers

OrganizationsOrganizations

SocietySociety

NatureNature

The UniverseThe Universe


Societys Major

Cultural Views Are

Expressed in

Peoples Views of:


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Responding to the Marketing EnvironmentResponding to the Marketing Environment

Environmental Management PerspectiveEnvironmental Management PerspectiveTaking a proactive approach to managing theTaking a proactive approach to managing the

environment by taking aggressive (rather thanenvironment by taking aggressive (rather thanreactive) actions to affect the publics and forcesreactive) actions to affect the publics and forces

in the marketing environment.in the marketing environment.

This can be done by:This can be done by: Hiring lobbyistsHiring lobbyists

Running advertorialsRunning advertorials Pressing lawsuitsPressing lawsuits

Filing complaintsFiling complaints

Forming agreements to control channelsForming agreements to control channels


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Rest Stop: Reviewing the ConceptsRest Stop: Reviewing the Concepts

Describe the environmental forces that affect theDescribe the environmental forces that affect thecompanys ability to serve its customers.companys ability to serve its customers. Explain how changes in the demographic andExplain how changes in the demographic and

economic environments affect marketingeconomic environments affect marketing

decisions.decisions. Identify the major trends in the firms natural andIdentify the major trends in the firms natural and

technological environments.technological environments.

Explain the key changes in the political andExplain the key changes in the political andcultural environments.cultural environments. Discuss how companies can react to theDiscuss how companies can react to the

marketing environment.marketing environment.

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