Markeitng Environment

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How environmental factors andcompetitors can influence the marketingmix decision ?

The Marketing Environment



L earning outcomes

3 - 1

y A t the end of the session the students will:

1. Understand what is marketing environment?

2. L earn how demographic and economic factors affect marketing?

3. Identify trends in the firm¶s natural and technological

environments.

4. Explore key changes in political and cultural environments.

5. Realize how companies react to the marketing environment?



T he Marketing Environment

3 - 2

Definition:The Company¶s environment consists of "the actors and forces outside marketing

that affect marketing management's ability to develop and maintain successful

transactions with its target customers"Kotler et al, 1994

y M icroenvironment:

y Includes the actors close to the company

y Macroenvironment:

y Involves larger societal forces

Goal 1: Understand environmental factors



Microenvironment

3 - 3

y Mark eting must conside r othe r p ar ts of the o r g a niz a tion includingfin a nce, R&D, pu r ch a sing,ope ra tions a nd a ccounting

y Mark eting decisions must r el a te tob r o a de r comp a ny go a ls a ndst ra tegies

Actors Actors

1. The company 2. Suppliers3. Marketing intermediaries4. Customers5. Competitors6. Publics

Goal 1: Describe environmental factors



Microenvironment

3 - 4

y Marketers must watch supply availability and pricing

y Effective partnership relationship managementwith suppliers is essential

Actors Actors

1. The company 2. Suppliers3. Marketing intermediaries4. Customers5. Competitors6. Publics




Microenvironment

3 - 5

y H elp to promote, sell and distribute goodsto final buyers

y Include resellers, physical distributionfirms, marketing services agencies andfinancial intermediaries

y Effective partner relationship managementis essential

ActorsActors

1. The company2. Suppliers3. Marketing intermediaries4. Customers5. Competitors6. Publics




Microenvironment

3 - 6

y The five types of customer marketsy Consumery Businessy Resellery Governmenty International

Actors Actors

1. The company2. Suppliers3. Marketing

intermediaries4. Customers5. Competitors6. Publics




Microenvironment

3 - 7

y Conducting competitor analysis is critical for successof the firm

y A marketer must monitor its competitors· offeringsto create strategic advantage

Actors Actors

1. The company 2. Suppliers3. Marketing intermediaries4. Customers5. Competitors

6. Publics




Microenvironment

3 - 8

y A group that has anactual or potentialinterest in or impact on

an organizationy Seven publics include:

y Financialy M ediay Government/regulator y

Citizen-actiony Localy Generaly Internal

Actors Actors

1. The company 2. Suppliers3. Marketing intermediaries4. Customers5. Competitors

6. Publics




Major Macro environmental forces

3 - 9





D emographic Environment

3 - 11

P opulation age distributionH ouse hold /family compositionGeographical shifts

Goal 2: Learn how demographic & economic factors affect marketing




3 - 12

Born between 1946 and 1964Represent 28% of thepopulation; earn 50% of

personal incomeM any mini-segments existwithin the boomer groupE ntering peak earning years asthey mature

Ba by Boom ersGener ation X Ge n er ation Y

Key Ge n er ations Key Ge n er ations

Goa l 2: Le arn h o w de mographi c & ec onomi c f a c tors a ffec t mark e ting




3 - 13

Born between 1965 and 1976F irst latchkey childrenM aintain a cautious economicoutlookRespond to socially responsiblecompaniesW ill be primary buyers of mostgoods by 2010

Ba by Boom e rs G e n e ration X G e n e ration Y

Key G e n e rations Key G e n e rations

Goa l 2: Le arn ho w de mographi c & ec onomi c f a c tors a ffec t mark e ting




3 - 14

Born between 1977 and 199472 million strong; almost aslarge a group as their baby boomer parentsN ew products, services, andmedia cater to GenYChallenging target formarketers

Ba by Boom e rs G e n e ration X G e n e ration Y

Key G e n e rations Key G e n e rations

Goa l 2: Le arn ho w de mographi c & ec onomi c f a c tors a ffec t mark e ting



N atural Environment

3 - 15

y N atural E nvironment:y Involves the natural resources that are needed as inputs by

marketers or that are affected by marketing activitiesy Trends

y Shortages of raw materialsy Increased pollutiony Increased government intervention

Goal 3: Identify trends in natural and tec h nolo g ical environments



Technological Environment

3 - 16

y The most dramatic force shaping our destinyy Rapidly changing force which creates many new marketing

opportunities but also turns many existing products extinct

Goal 3: Identify trends in natural and tec h nolo g ical environments



P olitical Environment

3 - 17

y Consists of laws, government agencies and pressuregroups that influence or limit various organizations andindividuals in a given societyy Legislation affecting businesses worldwide has increasedy Laws protect companies, consumers and the interests of societyy Increased emphasis on socially responsible actionsy N ature of Government systemy EU regulations

Goal 4: Ex p lore p olitical and cultural environments



C ultural Environment

3 - 18

y M ade up of institutions and other forces that affect a society·s basic values, perceptions, preferences and behaviors.

Goal 4: Ex p lore p olitical and cultural environments



Marketing Management

3 - 19

Th emselvesId entify wit h bran d s for self-expression

Ot h ersRecent s h ift from ³me´ to³we´ society

OrganizationsT ren d of d ecline in trust an d loyalty to companies

SocietyPatriotism on the rise

Nature lifestyles of health andsustainability (LOHAS) consumer

segment UniverseIncludes religion and spirituality

Cu lt u ral Environment Incl u desp eo p le s views of

Goal 4: Ex p lore p olitical and c u lt u ral environments



R esponding to the

Marketing Environment

3 - 20

y

y ³ There are three kinds of companies: those whomake things happen, those who watch things happen,and those who wonder what¶s happened.´

Goal 5: Realize h ow com p anies react to t h e mar k etin g environment



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Markeitng Environment