The Marketing Environment

The MarketingEnvironment

Chapter 4Chapter 4

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Objectives• Know the environmental forces Know the environmental forces

that affect the company’s ability that affect the company’s ability to serve its customers.to serve its customers.

• Realize how changes in the Realize how changes in the demographic and economic demographic and economic environments affect marketing environments affect marketing decisions.decisions.

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Objectives• Identify the major trends in the Identify the major trends in the

firm’s natural and technological firm’s natural and technological environments.environments.

• Know the key changes in the Know the key changes in the political and cultural environments.political and cultural environments.

• Understand how companies can Understand how companies can react to the marketing react to the marketing environment.environment.

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Case Study

• ““Millennial fever” Millennial fever” set the stage to set the stage to bring back the bring back the BeetleBeetle

• VW’s investment: VW’s investment: $ 560 million $ 560 million

• Demand quickly Demand quickly outstripped supplyoutstripped supply

• The new VW beetle The new VW beetle enjoyed cross-enjoyed cross-generational appealgenerational appeal

• Earned many Earned many awardsawards

• Beetle now Beetle now accounts for over accounts for over 25% of company 25% of company salessales

VolkswagenVolkswagen

Discussion:Discussion: Will the flower-power Microbus Will the flower-power Microbus succeed next?succeed next?

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Key Environments• Marketing EnvironmentMarketing Environment

The actors and forces that affect a The actors and forces that affect a firm’s ability to build and maintain firm’s ability to build and maintain successful relationships with successful relationships with customers.customers.

Aspects of the marketing environment:Aspects of the marketing environment: MicroenvironmentMicroenvironment MacroenvironmentMacroenvironment

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Actors Affecting a Firm’s Actors Affecting a Firm’s Ability Ability

to Serve Customersto Serve Customers

The Microenvironment

•CompanyCompany•SuppliersSuppliers•Customer Customer

MarketsMarkets

•CompetitorsCompetitors•PublicsPublics•Marketing Marketing

IntermediarieIntermediariess

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• Departments within the company Departments within the company impact marketing planning.impact marketing planning.

• Suppliers help create and deliver Suppliers help create and deliver customer value.customer value. Treat suppliers as partners.Treat suppliers as partners.

• Marketing intermediaries help sell, Marketing intermediaries help sell, promote, and distribute goods.promote, and distribute goods. Intermediaries take many forms.Intermediaries take many forms.

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The Macroenvironment

• Customer markets must be studied.Customer markets must be studied. Consumer, business, government, reseller Consumer, business, government, reseller

and international markets exist.and international markets exist.• Successful companies provide better Successful companies provide better

customer value than the competition.customer value than the competition. Size and industry position help to Size and industry position help to

determine the appropriate competitive determine the appropriate competitive strategy.strategy.

• Various publics must also be Various publics must also be considered.considered.

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Types of PublicsTypes of Publics


•FinancialFinancial•MediaMedia•GovernmentGovernment

•LocalLocal•GeneralGeneral• InternalInternal

• Citizen ActionCitizen Action

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Macroenvironmental ForcesMacroenvironmental Forces


•DemographiDemographicc

•EconomicEconomic•NaturalNatural

•TechnologicTechnologicalal

•PoliticalPolitical•CulturalCultural

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• Key Demographic TrendsKey Demographic Trends World population growthWorld population growth Changing age structureChanging age structure

The U.S. population consists of seven The U.S. population consists of seven generational groups. generational groups.

– Baby boomers, Generation X, and Baby boomers, Generation X, and Generation Y are key groups. Generation Y are key groups.

Distinct segments typically exist Distinct segments typically exist within within these generational groups. these generational groups.

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• Born between 1946 Born between 1946 and 1964and 1964

• Represent 28% of the Represent 28% of the population; earn 50% population; earn 50% of personal incomeof personal income

• Many mini-segments Many mini-segments exist within the exist within the boomer groupboomer group

• Entering peak earning Entering peak earning years as they matureyears as they mature

• Lucrative market for Lucrative market for travel, entertainment, travel, entertainment, housing, and morehousing, and more

• Baby Baby BoomersBoomers

• Generation Generation XX

• Generation YGeneration Y

Key Key GenerationsGenerations

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• Born between 1965 and Born between 1965 and 19761976

• First latchkey childrenFirst latchkey children• Maintain a cautious Maintain a cautious

economic outlookeconomic outlook• Share new cultural Share new cultural

concernsconcerns• Represent $125 billion Represent $125 billion

in annual purchasing in annual purchasing powerpower

• Will be primary buyers Will be primary buyers of most goods by 2010of most goods by 2010





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• Born between 1977 and Born between 1977 and 19941994

• 72 million strong; almost 72 million strong; almost as large a group as their as large a group as their baby boomer parentsbaby boomer parents

• New products, services, New products, services, and media cater to GenYand media cater to GenY

• Computer, Internet and Computer, Internet and digitally saavydigitally saavy

• Challenging target for Challenging target for marketersmarketers





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• Key Demographic TrendsKey Demographic Trends Changing American householdChanging American household Geographic population shiftsGeographic population shifts Better-educated, more white-Better-educated, more white-

collar workforcecollar workforce Increasing DiversityIncreasing Diversity

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• The Economic Environment The Economic Environment Affects consumer purchasing Affects consumer purchasing

power and spending patterns.power and spending patterns. Two types of national economies: Two types of national economies:

subsistence vs. industrial.subsistence vs. industrial. U.S. consumers now spend U.S. consumers now spend

carefully and desire greater value.carefully and desire greater value.

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• Key Economic TrendsKey Economic Trends U.S. income distribution is skewed.U.S. income distribution is skewed.

Upper class, middle class, working Upper class, middle class, working class and the underclass.class and the underclass.

Rich are getting richer, the middle Rich are getting richer, the middle class is shrinking, and the underclass class is shrinking, and the underclass remains poor.remains poor.

Consumer spending patterns are Consumer spending patterns are changing.changing.

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• The Natural EnvironmentThe Natural Environment Concern for the natural Concern for the natural

environment has grown steadily, environment has grown steadily, increasing the importance of these increasing the importance of these trends:trends: Shortage of raw materialsShortage of raw materials Increased pollutionIncreased pollution Increased governmental interventionIncreased governmental intervention

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• Key Technological Trends Key Technological Trends The technological environment is The technological environment is

characterized by rapid change.characterized by rapid change. New technologies create new New technologies create new

opportunities and markets but opportunities and markets but make old technologies obsolete.make old technologies obsolete.

The U.S. leads the world in The U.S. leads the world in research and development research and development spending.spending.

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• The Political EnvironmentThe Political Environment Includes laws, governmental agencies, and Includes laws, governmental agencies, and

pressure groups that impact organizations pressure groups that impact organizations and individuals. Key trends include:and individuals. Key trends include: Increased legislation to protect businesses Increased legislation to protect businesses

as well as consumers. as well as consumers. Changes in governmental agency Changes in governmental agency

enforcement.enforcement. Increased emphasis on ethical behavior and Increased emphasis on ethical behavior and

social responsibility. social responsibility.

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• The Cultural EnvironmentThe Cultural Environment Is composed of institutions and other Is composed of institutions and other

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

Culture can influence decision making.Culture can influence decision making. Core beliefs are persistent; secondary Core beliefs are persistent; secondary

cultural values change and shift more cultural values change and shift more easily.easily.

The cultural values of a society are The cultural values of a society are expressed through people’s views.expressed through people’s views.

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Cultural values are expressed Cultural values are expressed via how people view:via how people view:


•ThemselvesThemselves•OthersOthers•OrganizationOrganization

ss

•SocietySociety•NatureNature•The The

UniverseUniverse

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Responding to the Marketing

Environment• Reactive: Passive Acceptance and Reactive: Passive Acceptance and

Adaptation Adaptation Companies design strategies that avoid Companies design strategies that avoid

threats and capitalize upon opportunities.threats and capitalize upon opportunities.• Proactive: Environmental ManagementProactive: Environmental Management

Use of lobbyists, PR, advertorials, lawsuits, Use of lobbyists, PR, advertorials, lawsuits, complaints, and contractual agreements to complaints, and contractual agreements to influence environmental forces.influence environmental forces.

The Marketing Environment

Education

Transcript of The Marketing Environment