Chapter 3- slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter...

Chapter 3- slide 1Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Chapter Three

Analyzing the Marketing Environment


Analyzing the Marketing Environment

• The Company’s Microenvironment• The Company’s Macroenvironemnt• Responding to the Marketing Environment

Topic Outline


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


• More than any other group in company, marketers must be the opportunity seekers.

• They have disciplined methods- marketing research and marketing intelligence for collecting information about the marketing environment, by studying the environment, marketers can adapt strategies to meet the challenges and opportunities




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


The Company’s Microenvironment

Actors in the Microenvironment


• Marketing management’s job is to build relationships with customers by creating customer value and satisfaction. However, marketing managers cant do this alone.




• In designing marketing plans, marketing management takes other company groups into account, these groups such as:

The Company



• Top management• Finance• R&D• Purchasing• Operations• Accounting

The Company



• Provide the resources to produce goods and services

• Suppliers problems can affect marketing. Marketing managers must watch supply availability and costs, supply shortages or delays, labor strikes can cause sales in the short run and damage customer satisfaction in the long run

Suppliers



• Rising supply costs may force price increases than can harm the company’s sales volume.

• Treated as partners to provide customer value

Suppliers



Help the company to promote, sell and distribute its

products to final buyers

Marketing Intermediaries



Types of Marketing Intermediaries



• Are distribution channel firms that help the company find customers or make sales to them.

• These include wholesalers and retailers who buy and resell merchandise

Resellers



• Help the company to stock and move goods from their point of origin to their destinations

Physical distribution firms



• 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

Marketing services agencies



• Such as 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.

Financial intermediaries


________ include resellers, marketing service agencies, and financial firms that help a company to promote and sell its offerings to its final customers.1. Advertising agencies2. Suppliers3. Intelligence firms4. Marketing intermediaries


Banks, insurance companies, and credit companies that aid in financial transactions are called ________.1. financial intermediaries2. marketing services agencies3. physical distribution firms4. positioning


Banks, insurance companies, and credit companies that aid in financial transactions are called _________.1. financial intermediaries2. marketing services agencies3. physical distribution firms4. positioning



• The marketing concept states that to be successful, a company must provide greater customer value and satisfaction than its competitors do.

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

Competitors



Publics

• 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



• Financial publics: this group influences the company’s ability to obtain funds, banks, investment houses, and stockholders

• Media publics: this group carries news, features. It includes newspapers, magazines, radio and television stations

Publics



• Government publics: management must take government developments into account, marketers must consult the company’s lawyers on issues of product safety, truth in advertising

• Citizen action publics: a company’s marketing decisions maybe questioned by consumer organizations , environmental groups and others

Publics



• Local publics: this group includes neighborhood residents and community organizations. Large companies appoint a community relations officer to deal with the community, attend meetings, answer questions and contribute to the worthwhile causes

Publics



• General public: a company needs to be concerned about the general public’s attitude towards its products and activities

• Internal publics: this group includes workers, managers, volunteers and the board of directors.

Publics



• Customers are the most important actors in the company’s microenvironment. The aim of the entire system is to serve target customers and create strong relationships with them

• There are five types of customer markets

customers



• Consumer 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 the production process

• Reseller markets: buy goods and services to resell at a profit

Customers



• Government markets: are made up of government agencies that buy goods and services to produce public services or transfer good and services to others who need them

• International markets: consist of these buyers in other countries, including consumers, producers, sellers and governments

Customers


Financial, media, government, and citizen-action are several types of ________.1. taxing authorities2. legal departments3. publics4. marketing mix elements


A company’s ________ consists of its suppliers, marketing intermediaries, customers, competitors, and publics.1. macroenvironment2. microenvironment3. business environment4. marketing environment


The Company’s Macroenvironment



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

Demographic Environment



• Changing age structure of the population _ The post world war II baby boom produced

78 million– Baby boomers include people born between 1946

and 1964– Most affluent Americans– The baby boomers have been one of theMost powerful forces shaping the marketingEnvironment




• Generation X includes people born between 1965 and 1976– High parental divorce rates– Cautious economic outlook as they grown up

during time of recession & corporate downsizing




– Less materialistic “ they prize experience not acquisition “

– Family comes first, career second– Lag behind on retirement savings




• Millennials (gen Y or echo boomers) include those born between 1977 and 2000– Comfortable with technology– Includes

• Tweens (ages 8–12)• Teens (13–19)• Young adults (20’s)




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

some experts warn marketers to be careful about turning off one generation each time they craft a product or message that appeals effectively to another




More people are:• Divorcing or separating• Choosing not to marry• Choosing to marry later• Marrying without intending to have

children• Increased number of working women• Stay-at-home dads




• Growth in U.S. West and South and decline in Midwest and Northeast

• Moving from rural to metropolitan areas

• Changes in where people work– Telecommuting “ work at home

or in a remote office to conduct the business by phone, fax or internet”

– Home office– Divorcing or separating




• Changes in the Workforce– More educated, the increased

number of educated people will increase the demand for quality products, books , magazines, and personal computers

– More white collar




Demographic EnvironmentIncreased Diversity

Markets are becoming more diverse– International– National

• Includes:– Ethnicity– Gay and lesbian– Disabled


The baby boomer generation is made up of the period ________.1. 1960–19712. 1946–19643. 1980s4. 1920–1929



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

• Nations vary greatly in their levels and distribution of income, some countries have the industrial economies which constitute rich markets for many different kinds of goods

Economic Environment



• Subsistence economies consume most of their own agriculture and industrial output and offer few market opportunities

• In between are developing economies which can offer outstanding marketing opportunities for the right kinds of products




• Changes in income• Value marketing involves

ways to offer financially cautious buyers greater value—the right combination of quality and service at a fair price



The “shop until you drop” mentality of the 1990s has been replaced with a more ________ approach.1. “save all you can”2. “value is key” 3. “don’t shop at all”4. “splurge regularly”



• Ernst Engel—Engel’s LawDifferences noted over a century ago by Ernst

Engel in how people shift their spending across food, housing, transportation, health care, and other goods and services categories as family income rises

Economic EnvironmentChanges in Consumer Spending Patterns



• As income rises:– The percentage spent on food declines– The percentage spent on housing remains

constant– The percentage spent on savings increases

Economic EnvironmentChanges in Consumer Spending Patterns



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– Increase government intervention– Environmentally sustainable strategies

Natural Environment



• Environmental sustainability:Developing strategies and practices that

create a world economy that the planet can support indefinitely, they are responding to consumer demands with more environmentally responsible products.

Natural Environment


There are three trends in the natural environment that marketers are monitoring. These are ________, ________, and ________.

1. shortages of raw materials; increased legislation; increased consumerism

2. the green movement; shortages of raw materials; increased pollution

3. increased pollution; increased government intervention; shortages of raw materials

4. increased consumerism; increased population; increased ethical expectations



• Forces that create new technologies, creating new products and market

opportunities

Technological Environment



Technological Environment

• Most dramatic force in changing the marketplace

• Creates new products and opportunities

• Safety of new product always a concern



Political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society

Political Environment



• Legislation regulating business– Increased legislationBusiness legislation has been

enacted for two reasons:1.To protect companies from each

other2.To protect consumers from unfair

business practices such as telling lies in the advertisement




_ Changing government agency enforcement * International marketers will encounter dozens, or

even hundreds of agencies set up to enforce trade policies and regulations.

* Marketers need to know about major laws protecting competition, consumers and society. They need to understand these laws at local, national and international levels




• Increased emphasis on ethics– Socially responsible behavior” companies

encourage their managers to look beyond the regulatory system allows and simply “ do the right things “ these socially responsible firms seek out ways to protect the long run interests of their consumers and the environment”




– Cause-related marketing:• To exercise the social responsibility and build more

positive images, many companies are now linking themselves to worthwhile causes. These days, every product seems to be tied to some cause.

• This concept link the purchases of the company products and services with fundraising for worthwhile causes or charitable organizations.

• But this concept can be a more strategy for selling than a strategy for giving



Which of the following is not one of the reasons business legislation is enacted?1. To protect companies from each other2. To protect companies from consumers3. To protect consumers from unfair business

practices4. To protect the interests of society


In exercising their corporate social responsibility and building a more positive image, companies are now linking themselves to worthwhile causes. This is referred to as ________.1. marketing mix2. marketing concept3. cause-related marketing4. Engel’s Law


In exercising their corporate social responsibility and building a more positive image, companies are now linking themselves to worthwhile causes. This is referred to as __________________.1. marketing mix2. marketing concept3. cause-related marketing4. Engel’s Law



Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors

Cultural Environment



Core beliefs and values are persistent and 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 and include people’s views of themselves, others, organization, society, nature, and the universe

Cultural EnvironmentPersistence of Cultural Values



• People’s view of themselves– Yankelovich Monitor’s consumer

segments:• Do-it-yourselfers—recent movers“ embodying the whole do-it-yourself

attitude”• Adventurers“ They like to view themselves as

doing things others wouldn’t dare to do”

Cultural EnvironmentShifts in Secondary Cultural Values



• People’s view of others– More “cocooning” : in which people are going out

less with others and are staying home more to enjoy the creature comforts of home and hearth – from the networked home office to home entertainment centers.




• People’s view of organizations“people vary in their attitudes towards

corporations, government agencies , universities and trade unions”

• People’s view of society– Patriots defend it– Reformers want to change it– Malcontents want to leave it





• People’s view of nature– Some feel ruled by it– Some feel in harmony with it– Some seek to master it

• People’s view of the universe– Renewed interest in spirituality “

concerned with the meaning of life and issues of soul and spirit”


Yankelovich identifies consumer segments whose purchases are motivated by self-views. Two examples are _________ and __________.1. Generation M; generation N2. Refilled nests; do-it-yourselfers3. Do-it-yourselfers; adventurers4. marketing mix; positioning


A woman who drives a hybrid car, consistently recycles, and buys “earth-friendly” products is acting out her view of ________.1. cost2. non-profit organizations3. others4. nature


Which of the following are included in the major forces affecting a company’s macroenvironment?1. Marketing mix, positioning, price2. cultural, political/legal, economic3. Marketing concept, goal setting, cultural4. Baby boomers, minimum wage rates,

product/service


Which of the following are included in the major forces affecting a company’s macroenvironment?1. Marketing mix, positioning, price2. Cultural, political/legal, economic3. Marketing concept, goal setting, cultural4. Baby boomers, minimum wage rates,

product/service


Responding to the Marketing Environment

Views on Responding


A company has several options with regard to its marketing environment. A strong company takes a(n) ________ approach.1. proactive2. reactive3. ingenuous4. peaceful


A company’s macroenvironment consists of all of the following except ________.1. demographic forces2. economic forces3. competitive forces4. technological forces

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