1. The Marketing Environment
Chapter 3
The Marketing Environment

2. 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.

3. The Company’s Microenvironment
Company’s Internal Environment- functional areas inside a company that have an impact on the marketing department’s 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.

4. Company’s Internal Environment (Fig. 3.1)

5. 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 against whom a company must gain strategic advantage.
Publics - any group that perceives itself having an interest in a company’s ability to achieve its objectives.

6. Types of Customer Markets (Fig. 3.2)
Reseller
Markets
Government
Markets
Business
Markets
Consumer
Markets
International
Markets
Company

7. Types of Publics (Fig. 3.3) Citizen Action Government Publics Local
Media
Publics
General
Public
Financial
Publics
Internal
Publics
Company

8. Major Forces in the Company’s Macroenvironment (Fig. 3.4)

9. 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.

10. 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

11. Age Distribution of the U.S. Population
Baby Boomer Generation
(78 million people born ) One of the most powerful forces shaping the marketing environment, 30% of population
Generation X
(45 million people born ) More skeptical, cynical of frivolous marketing pitches promising easy success
Echo Boomer Generation
(72 million people born ) Fluent and comfortable with computer, digital, and Internet technology (Net-Gens)

12. 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?

13. Economic Environment Key Concerns for Marketers Economic Development
Changes in Income:
Value Marketing
Changing Consumer
Spending Patterns
Key
Concerns for
Marketers

14. Environmentally Sustainable
Natural Environment
Shortages of
Raw Materials
Factors Affecting
the
Natural
Environment
Environmentally Sustainable
Strategies
Increased Pollution
Governmental
Intervention

15. The Company’s Macroenvironment
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 society’s basic values, perceptions, preferences, and behaviors.

16. 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.

17. 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
Responsible
Actions

18. Cultural Environment Cultural Values of a Society People’s View of
the Universe
People’s View of
Themselves
People’s View of
Others
Cultural Values
of a
Society
People’s View of
Nature
People’s View of
Organizations
People’s View
of Society

19. 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.

20. Review of Concept Connections
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.