Chpt 03 Lecture

7/29/2019 Chpt 03 Lecture

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3- 1Copyright 2012 Pearson Education,

Inc. Publishing as Prentice Hall

it s good andgood for you

Chapter 3:

Analyzing the Marketing

Environment


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3-2Copyright 2012Pearson Education, Inc.

Publishing as Prentice Hall

Learning ObjectivesAfter studying this chapter, you should be able to:

1. Describe the environmental forces that affect thecompanys ability to serve its customers.

2. Explain how changes in the demographic and economicenvironments affect marketing decisions.

3. Identify the major trends in the firms natural andtechnological environments.

4. Explain the key changes in the political and cultural

environments.

5. Discuss how companies can react to the marketingenvironment.


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Introduction

A companys marketing environmentconsists of the actors andforces outside marketing that affect marketing managementsability to build and maintain successful relationships withtarget customers.

The marketing environment offers both opportunities and

threats. The marketing environment is made up of a micro-environment

andmacroenvironment.

The microenvironmentconsists of the actors close to thecompany that affect its ability to serve its customers thecompany, suppliers, marketing intermediaries, customer

markets, competitors, and publics. The macroenvironmentconsists of the larger societal forces

that affect the microenvironment demographic, economic,natural, technological, political, and cultural forces.


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3.1 The Microenvironment

Figure 3.1 shows the major actors in the

marketers microenvironment.

Marketing success will require working

closely with other company departments,

suppliers, marketing intermediaries,

customers, competitors, and various

publics, which combine to make up thecompanys value delivery network.


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Figure 3.1: Actors in the Microenvironment


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3.1.1 The Company

In designing marketing plans, marketing managementtakes other company groups into account groups suchas top management, finance, research and development(R&D), purchasing, operations, and accounting.

All these interrelated groups form the internal

environment. Marketing managers must work closely with other

company departments.

3.1.2 Suppliers

Suppliers form an important link in the companys overall

customer value delivery system. They provide the resources needed by the company to

produce its goods and services.

Supplier problems can seriously affect marketing.


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Copyright 2012Pearson Education, Inc.


3.1.3 Marketing Intermediaries

Marketing intermediaries help the company to promote,sell, and distribute its goods to final buyers.

They include resellers, physical distribution firms,marketing services agencies,andfinancialintermediaries.

3.1.4 Competitors

Marketers must gain strategic advantage by positioningtheir offerings strongly against competitors offerings inthe minds of consumers.

No single competitive marketing strategy is best for allcompanies.

Each firm should consider its own size and industryposition compared to those of its competitors.


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3.1.5 Publics

Apublic is any group that has an actual or potential interest inor impact on an organizations ability to achieve its objectives.

Seven types of publics can be identified: financial publics,media publics, government publics, citizen-action publics,local publics, general public, and internal publics.

3.1.6 Customers

The company needs to study five types of customer marketsclosely.

The markets are: consumer markets, business markets,

reseller markets, government markets, and internationalmarkets.

Each market type has special characteristics that call forcareful study by the seller.


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3.2 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.

Figure 3.2 shows the six major forces in

the companys macroenvironment.


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Figure 3.2: Major Forces in the Companys

Macroenvironment


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3-11Copyright 2012Pearson Education, Inc.Publishing as Prentice Hall

3.2.1 Demographic Environment

Demographyis the study of human population in terms ofsize, density, location, age, gender, race, occupation, andother statistics.

The demographic environment is of major interest tomarketers because it involves people, and people make upmarkets.

The world population is growing at an explosive rate.

The explosive world population growth has major implicationsfor business.

Marketers must keep close track of demographic trends anddevelopments in their markets, both at home and abroad.

They track changing age and family structures, geographicpopulation shifts, educational characteristics, and populationdensity.

Table 4.1 contains the population data of 12 Asian countries.


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Changing Age Structure of the Population

In general, the three largest age groups are the babyboomers, Generation X, and the Millenials.

The Baby Boomers: These are the people born post-WorldWar II between 1946 and 1964.

The baby boomers are one of the most powerful forcesshaping the marketing environment.

Generation X: Those born between 1965 and 1976.

They buy lots of products, such as cosmetics, electronics, cars,fast food, and computers.

Their cynicism makes them more savvy shoppers, and theirfinancial pressures make them more value conscious.

The Millenials (or the Generation Y): Those born between1977 and 2000.

Ranging from preteens to mid-twenties, Generation Y group isstill forming its buying preferences and behaviours.


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The Changing Family

Traditional household is no longer the dominant patternin some countries.

Marketers must increasingly consider the special needsof nontraditional households, because they are nowgrowing more rapidly than traditional households.

Geographic Shifts in Population Marketers should take advantage to the growth in

immigrant populations.

A Better-Educated and More White-Collar, MoreProfessional Population

The world population is becoming better educated.

Increasing Diversity

Countries vary in their ethnic and racial makeup.


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3.2.2 Economic Environment

Markets require buying power as well as people. The economic environmentconsists of factors that affect

consumer purchasing power and spending patterns.

Marketers must pay close attention to major trends andconsumer spending patterns both across and within theirworld markets.

Nations vary greatly in the level and distribution of incomeand industrial structure.

There are four types of industrial structures: subsistenceeconomies, raw-material-exporting economies, industrialisingeconomies, and industrial economies.

Changes in Consumer Spending: Economic factors can have adramatic effect on consumer spending and buying behaviour.

Marketers should pay attention to income distribution as wellas average income.


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3.2.3 Natural Environment

The natural environmentinvolves the natural resources thatare needed as inputs by marketers or that are affected bymarketing activities.

Environmental concerns have grown steadily during the pastthree decades.

Marketers should be aware of several trends in the naturalenvironment.

Shortages of Raw Materials: infinite, finite renewable, andfinite nonrenewable

Increased Pollution: Industrial activity will inevitably harm theenvironment.

Increased Government Intervention: Environmental concernvaries by country.

The green movement: Many companies are developingenvironmentally sustainable strategies and practices.


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3.2.4 Technological Environment

The technological environmentis perhaps themost dramatic force shaping our destiny.

Technological environment consists of forces

that create new technologies, creating newproduct and market opportunities.

As products and technology become morecomplex, the public needs to know that these

are safe. Marketers should be aware of government

regulations when applying new technologies anddeveloping new products.


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3.2.5 Political and Social Environment

Marketing decisions are strongly affected bydevelopments in thepoliticaland legal environment.

This environment is composed of laws, governmentagencies, and pressure groups that influence and limitvarious organizations and individuals.

Legislation Regulating Business: has three mainpurposes, i.e. to protect companies from unfaircompetition, to protect consumers from unfair businesspractices, and to protect the interests of society fromunbridled business behaviour.

Increased Emphasis on Ethics and Socially ResponsibleActions: Beyond written laws and regulations, businessis also governed by social codes and rules of professionalethics.


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3.2.6 Cultural Environment

The cultural environmentis made up of institutions andother forces that affect a societys basic values,perceptions, preferences, and behaviours.

The following cultural characteristics can affectmarketing decision making.

Persistence of Cultural Values: The people living in aparticular society hold many core beliefs and values thattend to persist.

Shifts of Secondary Cultural Values: Although core valuesare fairly persistent, cultural swings do take place.

Consider the impact of popular music groups, moviepersonalities, and other celebrities on young peopleshairstyling, clothing, and sexual norms.


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3.3 Responding to the Marketing

Environment

Many companies view the marketing environment as anuncontrollable element to which they must adapt.

They passively accept the marketing environment and do nottry to change it.

They analyse the environmental forces and design strategies

that will help the company avoid the threats and takeadvantage of the opportunities the environment provides.

Other companies take an environmental managementperspective.

Rather than simply watching and reacting, these firms takeaggressive actions to affect the publics and forces in their

industries and stage media events to gain favourable presscoverage.

They run advertorials (ads expressing editorial points of view)to shape public opinion.

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Chpt 03 Lecture