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Managers can classify competing

alternatives at three levels:

Competing product classes serving a generic

need.

Brands: Kellogs,

Nestle

Generic Need: Breakfast foods

Product Classes: Cereals, Pastries,

Eggs

Product Forms: Nutritional

cereals and presweetened

cereals

Competing product forms within a

product class.

Competing brands

within a product form.

Primary Demand is the demand for the product form or

product class that has been defined as the relevant

market.

By analyzing

primary

demand

managers

can learn

Why and how do customer buy a product

form or class?

Who are the buyers in the relevant market?

Selective demand is the demand for a specific brand or supplier within the

relevant market.

In analyzing selective demand, managers are primarily interested

in understandig how buyers make choice from the alternative

brands.

Basic Types of Market

Measurement

Actual Sales

Company demand: Amount of sales for a company’s product

Industry sales: Sales for all the other companies in the market

Sales Forecast

Industry sales forecast: Level of sales expected to be achieved by all firms

Company sales forecast: Expected level of sales that will be met by

individual company

Market Potential: The upper limit of demand for a product within a defined period

of time.

Current market potential: Max. sales opportunity that can be achieved by all

sellers at the present time

Future market potential: Max. sales opportunity that can be achieved during

the some future period of time

Basic Kinds of Market Measurements

Company

Sales

Industry Sales

Market Potential

Primary

Demand

Gap

Selective

Demand GapSa

les (

in u

nit

s)

Current Time

Period

Actual

Forecast

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MARKETING

ENVIRONMENT

Assist. Prof. Dr. Özge Özgen

2016

Dokuz Eylül University, Faculty of Business

Marketing Environment

The actors and forces outside marketing that affect

marketing management ability to develop and maintain

successful transactions with its target customers.

o Includes:

o Microenvironment - forces close to the company

that affect its ability to serve its customers.

o Macroenvironment - larger societal forces that affect

the whole microenvironment.

The Marketing Environment

Company

Demographic

Economic

Natural

Technological

Political

Cultural

Company

Customers

Intermediaries

Suppliers

Competitors

Publics

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Actors in the Microenvironment The Company

o Company’s Internal Environment

o functional areas such as top management,

finance, and manufacturing, etc.

o All departments must “think consumer” and

work together to provide superior customer

value and satisfaction.

Suppliers:

Provide resources needed to

produce goods and services.

Important link in the “value

delivery system.”

Most marketers treat suppliers

like partners.

Suppliers Marketing Intermediaries

Help the company to promote, sell, and distribute its goods to final

buyers

• Resellers:

• Distribution channel firms that help the company find customers

make sales to them (Wholesalers, retailers etc.)

• Physical distribution firms:

• help the company to stock and move goods from their points origin

to their destination (Warehouse and transportation firms etc)

• Marketing services agencies:

• (Marketing research firms, advertising agencies, media firms etc.)

• Financial intermediaries:

• (Banks, credit companies etc. that help finance transactions or

insure aginst the risks associated with the buying and selling of

goods.)

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Customer Markets

Company

ConsumerMarkets

InternationalMarkets

GovernmentMarkets

BusinessMarkets

ResellerMarkets

Competitors and Publics

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:

Group that has an interest in or impact on an

organization's ability to achieve its objectives

Types of Publics The Company’s Macroenvironment

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Demographic

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,

educational characteristics, and population

diversity.

The most important demographic targets/clusters

Boomers (1946-1964)

Generation X (1965-1980)

Generation Y (1977-1995)

Generation Z

Digital Natives

Urban/Females etc.

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Key Demographic Trends

Changing Age Structure

Changing Family Structure

Geographic Shifts

Education

Ethnic and Racial Diversity

Pair with another student to discuss the following questions:

In what ways does the buying behavior of you and your

parents differ?

In what ways will the buying behavior of you and your

children differ?

What selling strategies would work best for:

• You

• Your parents

• Your children

Interactive Class Discussion

Economic

Environment

Changes in Income

1980’s – consumption frenzy

1990’s – “squeezed consumer”

2000’s – value marketing

Income Distribution

Upper class

Middle class

Working class

Underclass

Consists of factors that affect consumer purchasing power and spending patterns.

Economic Environment

Changes

in Consumer

Spending

Patterns

Economic

Development

Changes

in IncomeKeyEconomic

Concerns forMarketers

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“The concept of serving the world's

poorest four billion or so people has

been popular since CK Prahalad

introduced the idea a decade ago.”

Bottom of Pyramid

(BOP)

The Fortune at the

Bottom of

the Pyramid, was

published in

2004 by Prahalad

Natural Environment

Involves the natural resources that are needed as inputs by

marketers or that are affected by marketing activities.

Factors Impacting the Natural Environment:

Shortages of Raw Materials

Increased Pollution

Increased Government Intervention

Environmentally Sustainable Strategies

Volkswagen Scandal

cheating emissions tests in the US

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Technological Environment

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 conceptualization and

introduction of product.

What is The Internet of Things

(IoT)?

the network of physical objects that contain

embedded technology to communicate and sense or

interact with their internal states or the external

environment.

It is increasing the connectedness of people and

things on a scale that once was unimaginable.

AIMto connect every possible electronic device to the

existing internet infrastructure

making them smarter and more useful

Smart Fridge

South Korea LG has demonstrated a fridge that is aware

of its contents and their freshness, so the fridge itself can

help plan shopping or even communicate with a

smartphone while a customer is in store.

Smart Cup: Vessyl

a cup that is both

internet connected and

aware of its content:

sugar, caffeine, even

the brand and flavour.

the screen will display

your consumption data

The spill-proof lid, non-

stick interior, and

durable build

https://www.myvessyl.com/

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Political Environment

Includes Laws,

Government Agencies,

and Pressure Groups that

Influence or Limit

Various Organizations

and Individuals In a

Given Society.

Increasing Legislation

Changing GovernmentAgency Enforcement

Increased Emphasis on Ethics& Socially Responsible Actions

Against Counterfeit

5-35

Cultural Environment

ELEMENTS OF THE CULTURE

Language

Beliefs and Values

Nonverbal Communication

Body Language

Time

Esthetic

Religion

Social Institution

Material Culture

Education

“A system of values and norms that are shared

among a group of people and that when taken

together constitute a design for living.”

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Surface Culture

Symbols, Language,

Customs, Arts, Music,

Fashions

Deep Culture

Expectations

Traditions

Attitudes

Norms, Values

Beliefs

Perceptions

Religion and Global

Marketing

Coca Cola and Adaptation of

advertisements based on religion

Religion and Global

MarketingIn 2006, after a publication of cartoon images of the

Prophet Muhammed in a Danish newspaper

Carrefour removed Danish products from their shelves

Ten American enduring Core

Values (Yankelovich)

• Freedom, free speech and freedom from constraint to the pursuit

of private happiness

• Equality before the law

• Equality of opportunity: 'freedom & individuality in the marketplace'

• Fairness: 'get what you deserve'

• Achievement: 'individual effort will pay off'

• Patriotism

• Democracy

• American exceptionalism: special moral status

• Religion

• Luck

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Patriotic Ad:

http://www.youtube.com/watch?v=Sia3nRjht48

Jack Daniel’s is a brand of Tennessee whiskey that is the

highest selling American whiskey in the world

Such as BENEVOLENCE

Turkish values???

Turkish TV Series vs. British TV

Series

Turkish TV Series vs. American TV

Series

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Campbell soup

failed in South

America

because mother’s

behavior was

judged as not

caring enough

about family.

Campbell soup company is

a global manufacturer and

their products are sold in

more than 100 countries