1 Chapter 3 The Marketing Environment

Jian Hong SHAO USTB 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.

Jian Hong SHAO USTB Kotler on Marketing “ Today you have to run faster to stay in place. ”

Jian Hong SHAO USTB Marketing Environment Marketing Environment - the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with 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.

Jian Hong SHAO USTB The Microenvironment

Jian Hong SHAO USTB The Macroenvironment Demographic Technological Cultural Economic Political Natural Forces that Shape Opportunities and Pose Threats to a Company Forces that Shape Opportunities and Pose Threats to a Company

Jian Hong SHAO USTB 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, Better-Educated & More White-Collar Increased college attendance and white-collar workers Increasing Diversity 72% Whites, 13% African-American, 11% Hispanic & 3% Asian…

Jian Hong SHAO USTB Economic Environment Economic Development Economic Development Changes in Income Changes in Income Changes in Consumer Spending Patterns Changes in Consumer Spending Patterns Key Economic Concerns for Marketers Key Economic Concerns for Marketers

Jian Hong SHAO USTB Natural Environment Factors Affecting Natural Environment Shortages of Raw Materials Increased Pollution Governmental Intervention Environmentally Sustainable Strategies

Jian Hong SHAO USTB Technological Environment Rapid Pace of Change Rapid Pace of Change High R & D Budgets High R & D Budgets Increased Regulation Increased Regulation Issues in the Technological Environment Issues in the Technological Environment Focus on Minor Improvements Focus on Minor Improvements

Jian Hong SHAO USTB Technological Environment Creates new markets and opportunities. Safety regulations result in higher research costs and longer time between conceptualization and introduction of product. Ignoring technology often means being bypassed by competition

Jian Hong SHAO USTB 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

Jian Hong SHAO USTB Cultural Environment The institutions and other forces that affect a society’s basic values, perceptions, preference, and behaviors. -Core beliefs -Secondary beliefs

Jian Hong SHAO USTB Cultural Environment People’s View of Organizations People’s View of Organizations People’s View of Nature People’s View of Nature People’s View of Themselves People’s View of Themselves People’s View of Society People’s View of Society People’s View of the Universe People’s View of the Universe People’s View of Others People’s View of Others Cultural Values of a Society Cultural Values of a Society

Jian Hong SHAO USTB Cultural Environment Cultural Values Primary source of values is the family Values influence: Eating habits (healthier foods) Alternative health and medical treatment choices Attitudes toward marriage Concern for the natural environment ……

Jian Hong SHAO USTB Discussion Question 2 In the 1930s, President Franklin Roosevelt used his cigarette holder as a personal “trademark.” How the cultural environment has changed? How might a cigarette manufacturer market its products differently in this new environment? What are the long-term prospects for the tobacco industry?

Jian Hong SHAO USTB When will “Culture Shock” happen ? Occurs when our cultural clues, the signs and symbols which guide social interaction, are stripped away. A difficult part of this process for adults is the experience of feeling like children again, of not knowing the ‘right’ thing to do. (put your foot in your mouth)

Jian Hong SHAO USTB Coping with culture shock Brush up about the country and its culture before you leave. Be open-minded about the culture you visit. Remember, there are always resources that you can use and friends that you can count on. Don't forget the good things you already have! Learn to include a regular form of physical activity in your routine. (walk) Be happy and excited for this opportunity

Jian Hong SHAO USTB Environmental Management Proactive Response Reactive Response

Jian Hong SHAO USTB 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.