The Marketing Environment

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Chapter 3

• The Marketing Environment
• Marketing does not take place in a vacuum.

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Marketing Environment

• Marketing Environment- consists of the actors and
  forces outside marketing that affect marketing
  managements ability to develop and maintain
  successful relationships with its target
  customers.
• Includes
• Microenvironment - forces close to the company
  that affect its ability to serve its customers.
• Macroenvironment - larger societal forces that
  affect the microenvironment.

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The Companys Microenvironment

• Companys Internal Environment- functional areas
  inside a company that have an impact on the
  marketing departments plans.
• Suppliers - provide the resources needed to
  produce goods and services and are an important
  link in the value delivery system.
• Marketing Intermediaries - help the company to
  promote, sell, and distribute its goods to final
  buyers. i.e. resellers.

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Companys Internal Environment (Fig. 3.1)
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The Companys Microenvironment

• Customers - five types of markets that purchase a
  companys goods and services.
• Competitors - those who serve a target market
  with similar products and services against whom a
  company must gain strategic advantage.
• Publics - any group that perceives itself having
  an interest in a companys ability to achieve its
  objectives.

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Types of Customer Markets (Fig. 3.2)
Reseller Markets
Government Markets
Business Markets
Consumer Markets
International Markets
Company
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Steps in Analyzing Competitors (Fig. 18.4)
Identifying the companys competitors
Assessing competitors objectives,
strategies, strengths and weaknesses, and
reaction patterns
Selecting which competitors to attack or avoid
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Basic Competitive Strategies
Overall Cost Leadership
Focus
Differentiation
Middle of the Road
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Competitive Strategies Value Disciplines
Companies Gain Leadership Positions by Delivering
Superior Value to their Customers Through These
Strategies
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Competitive Marketing Strategies
Firms Competing in a Given Target Market Differ
in their Objectives and Resources so May Choose
the Following Forms
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Competitive Marketing Strategies
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Competitive Marketing Strategies
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Balancing Customer and Competitor Orientations
Customer-Centered
Yes
No
No
Product Orientation
Customer Orientation
Competition -centered
Competitor Orientation
Market Orientation
Yes
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Major Forces in the Companys Macroenvironment
(Fig. 3.4)
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The Companys Macroenvironment

• Demographic - studies populations in terms of
  size, density, location, age, gender, race,
  occupation and other statistics.
• Economic - factors that affect consumer
  purchasing power and spending patterns.
• Natural - natural resources needed as inputs by
  marketers or that are affected by marketing
  activities.

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Key U.S.Demographic Trends
Changing Age Structure Population is aging many
divisions
Changing American Family Later marriage, fewer
children, working women, and nontraditional
households
Geographic Shifts Moving to the Sunbelt, suburbs,
micropolitan areas
Better-Educated More White-Collar Increased
college attendance and white-collar workers
Increasing Diversity 72 Caucasian, 13
African-American, 11 Hispanic 3 Asian
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Age Distribution of the U.S. Population
Baby Boomer Generation

(78 million people born 1946-1964)
One of the most powerful forces
shaping the marketing environment, 30 of
population
Generation X
(45 million people born 1965-1976) More
skeptical, cynical of frivolous marketing pitches
promising easy success
Echo Boomer Generation


(72 million people born 1977-1994)
Fluent and comfortable with computer, digital,
and Internet technology (Net-Gens)
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Discussion Connections

• Form small groups to identify a company that has
  done a good job of reacting to
• Baby Boomers, or
• Generation X, or
• Echo Boomers
• What did the company do well?
• Compare this company to one that has done a poor
  job. What did they do poorly?

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Economic Environment
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Natural Environment
Shortages of Raw Materials
Factors Affecting the Natural Environment
Environmentally Sustainable Strategies
Increased Pollution
Governmental Intervention
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The CompanysMacroenvironment

• Technological - forces that create new
  technologies, creating new product and market
  opportunities.
• Political - laws, agencies and pressure groups
  that influence and limit organizations and
  individuals in a given society.
• Cultural - institutions and other forces that
  affect a societys basic values, perceptions,
  preferences, and behaviors.

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Technological Environment

• Faster pace of technological change products are
  outdated at a rapid pace.
• Almost unlimited opportunities being developed
  daily in health care, space industry, robotics,
  and bio-genetic field.
• Challenge is not only technical, but also
  commercial make practical, affordable versions
  of products.
• Increased regulation concerning product safety,
  individual privacy, and other areas that affect
  technological changes.

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Political Environment
Includes Laws, Government Agencies, Etc. that
Influence Limit Organizations/ Individuals in
a Given Society
Increasing Legislation
Changing Government Agency Enforcement
Increased Emphasis on Ethics Socially Responsibl
e Actions
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Cultural Environment
Peoples View of Themselves
Peoples View of Others
Peoples View of the Universe
Cultural Values of a Society
Peoples View of Organizations
Peoples View of Nature
Peoples View of Society
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Responding to the Marketing Environment

• Environmental Management Perspective
• Taking a proactive approach to managing the
  microenvironment and the macroenvironment by
  taking aggressive (rather than passive) actions
  to affect the publics and forces in the marketing
  environment.
• How? Hire lobbyists , run advertorials, press
  law suits, file complaints, and form agreements.

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Review of Concept Connections

• Describe the environmental forces that affect the
  companys ability to serve its customers.
• Discuss the need to understand competitors as
  well as customers through competitor analysis.
• Explain the fundamentals of competitive marketing
  strategies based on creating value for customers.
• Illustrate the need for balancing customer and
  competitor orientations in becoming a truly
  market-centered organization.
• Explain how changes in the demographic and
  economic environments affect marketing decisions.
• Identify the major trends in the firms natural
  and technological environments.
• Explain the key changes in the political and
  cultural environments.
• Discuss how companies can react to the marketing
  environment.