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4-1 Chapter 4 The Marketing Environment. 4-2 Road Map: Previewing the Concepts Describe the environmental forces that affect the company’s ability to.

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Presentation on theme: "4-1 Chapter 4 The Marketing Environment. 4-2 Road Map: Previewing the Concepts Describe the environmental forces that affect the company’s ability to."— Presentation transcript:

1 4-1 Chapter 4 The Marketing Environment

2 4-2 Road Map: Previewing the Concepts Describe the environmental forces that affect the company’s ability to serve its customers. Explain how changes in the demographic and economic environments affect marketing decisions. Identify the major trends in the firm’s natural and technological environments. Explain the key changes in the political and cultural environments. Discuss how companies can react to the marketing environment.

3 4-3 Marketing Environment Marketing Environment- consists of the actors and forces outside marketing that affect marketing management’s 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.

4 4-4 Company’s Internal Environment (Fig. 4-1)

5 4-5 The Company’s Microenvironment Company’s Internal Environment – areas inside a company; top management, affect the marketing department’s plans Suppliers – provide resources needed to produce goods and services, 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

6 4-6 The Company’s Microenvironment Customers – five types of markets that purchase a company’s goods and services Competitors – those who serve a target market with similar products and services, company must gain strategic advantage against these organizations Publics – group that has an interest in or impact on an organization's ability to achieve its objectives

7 4-7 Types of Customer Markets (Fig. 4-2)

8 4-8 Types of Publics (Fig. 4-3)

9 4-9 The Company’s Macroenvironment (Fig. 4-4)

10 4-10 The Company’s 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.

11 4-11 Key U.S.Demographic Trends Changing Age Structure Population contains 7 generational groups Changing Age Structure Population contains 7 generational groups Changing American Family Later (or no) marriage, fewer children, working women, and nontraditional households Geographic Shifts Shifted to the Sunbelt, suburbs, “micropolitan areas” Better-Educated & More White-Collar Increased college attendance (up 9% in 20 years) and white-collar workers Increasing Diversity Ethnic heritage, gays & lesbians, disabled people

12 4-12 Changing Age Structure (78 million people born ) One of the most powerful forces shaping the marketing environment, 28% of population (45 million people born ) More skeptical, savvy shoppers, respond to honesty in advertising, share cultural concerns (72 million people born ) Fluent and comfortable with technology, smart, aware, fair-minded (N-Gens)

13 4-13 Changing American Family 58% of all women 16 and older are working or looking for a job. Many marketers of tires, cars, insurance, travel and financial services target these women.

14 4-14 Form small groups to discuss the following questions. With respect to the seven U.S. generations (Fig. 4-5), which generation are you in? – How would you describe your generation? If you were going to attempt to sell to the older baby boomer generation, what would be a key to selling successfully to this generational group?

15 4-15 Economic Environment Changes in Income 1980’s – consumption frenzy 1990’s – “squeezed consumer” 2000’s – value marketing Income Distribution Upper class Middle class Working class Underclass Changing Consumer Spending Patterns Engel’s laws - Consumers at different income levels have different spending patterns

16 4-16 Natural Environment Factors Affecting the Natural Environment Shortages of Raw Materials Increased Pollution Increased Government Intervention Environmentally Sustainable Strategies

17 4-17 The Company’s Macroenvironment Technological – Most dramatic force now shaping our destiny. Political – laws, government agencies, and pressure groups that influence and limit organizations and individuals in a given society. Cultural – institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors.

18 4-18 Technological Environment Changes rapidly Creates new markets and opportunities Challenge to make practical, affordable products Safety regulations result in higher research costs

19 4-19 Which technological force will impact marketing the most in the near future? What technological force has impacted you the most? Comment.

20 4-20 Increasing Legislation Increasing Legislation Changing Government Agency Enforcement Changing Government Agency Enforcement Includes Laws, Government Agencies, Etc. that Influence & Limit Organizations/Individuals in a Given Society Includes Laws, Government Agencies, Etc. that Influence & Limit Organizations/Individuals in a Given Society Increased Emphasis on Ethics & Socially Responsible Actions Increased Emphasis on Ethics & Socially Responsible Actions Political Environment

21 4-21 Cultural Environment Yankelovick Monitor has identified eight major consumer value themes: Paradox Trust not Go it alone Smarts really count No sacrifices Stress hard to beat Reciprocity is the way to go Me 2

22 4-22 Themselves Others Organizations Society Nature The Universe Cultural Environment Society’s Major Cultural Views Are Expressed in People’s View of:

23 4-23 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.

24 4-24 Rest Stop: Reviewing the Concepts Describe the environmental forces that affect the company’s ability to serve its customers. Explain how changes in the demographic and economic environments affect marketing decisions. Identify the major trends in the firm’s natural and technological environments. Explain the key changes in the political and cultural environments. Discuss how companies can react to the marketing environment.


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