1 Chapter 3 & 4 - The Marketing Environments

2 The Marketing Environment Consist of the internal (microenvironment) and the external environment (macroenvironment).

3 The Micro-environment Company FOUR BASIC CATEGORIES

4 The microenvironment: Company Total organization – many different functional areas Interactive Flexible and creative

5 The microenvironment: Customers Business-to-consumer Business-to-business Business –to-Institutional

6 The microenvironment: Competition Four general types of competition: – Price – Quality – Time (particular important in services) – Location

7 The microenvironment: Competition (forces that impact an industry’s competitive environment) Porter’s Competitive Forces: 1. Supplier power 2. Threat of substitutes 3. Degree of rivalry 4. Buying power of the customer 5. Barriers to entry

8 The microenvironment: Collaborators Alliances Networks Informal partnerships Suppliers Virtual corporations

9 Company The Value Chain - Exhibit 3-2 UPSTREAM DOWNSTREAM PRIMARY ACTIVITIES Raw Materials Supplier Components Supplier Service Supplier Transportation company Wholesaler Retailer CustomersCustomers

10 Macroenvironment 1. Physical Environment 2. Sociocultural Forces 3. Demographic Forces 4. Science and Technology 5. Economic Forces 6. Political and Legal Forces Consists of SIX broad categories

11 Exhibit 4-1: Macroenvironment influences on the marketing mix

12 MACROENVIRONMENT: Demography The Canadian Population – – Canadian population growth attributed to immigration Migration and Urbanization 1. “Golden Horseshoe” – Ontario 2. Montreal and the adjacent regions 3. B.C.’s lower mainland and southern Vancouver Island 4. Calgary-Edmonton Corridor 51% of Canadians live in one of these four areas; 80% of Canadians are urban dwellers

13 MACROENVIRONMENT: Demography Profile of the “Average Canadian Consumer” The Changing Canadian Household Single-Person and Single- Parent Households Working Women Family and Household Income A Multi-cultural Population