1. Principles of Marketing
The Marketing Environment

2. The Marketing Environment
The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers

3. The Marketing Environment
Microenvironment consists of the actors close to the company that affect its ability to serve its customers

4. The Marketing Environment
Actors in the Microenvironment

5. The Company’s Microenvironment
Marketing Environment
Macroenvironment consists of the larger societal forces that affect the microenvironment
Demographic
Economic
Natural
Technological
Political
Cultural

6. The Company’s Microenvironment
Internal environment includes:
Top management
Finance
R&D
Purchasing
Operations
Accounting

7. The Company’s Microenvironment
Suppliers
Provide the resources to produce goods and services
Treated as partners to provide customer value

8. The Company’s Microenvironment
Marketing Intermediaries
Help the company to promote, sell, and distribute its products to final buyers
Include:
Resellers
Physical distribution firms
Marketing services agencies
Financial intermediaries

9. The Company’s Microenvironment
Marketing Intermadiaries
Coke analyzes the demographics of the area for its retail partner to determine:
Which Coke brands are mostly preffered in the area
Design of drive-through menu boards
Layouts, fonts, letter sizes, colors, visuals
Develops marketing programs and merchandising tools

10. The Company’s Microenvironment
Publics
Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives
Financial publics
Media publics
Government publics
Citizen-action publics
Local publics
General public
Internal publics

11. The Company’s Microenvironment
Competitors
Firms must gain strategic advantage by positioning their offerings against competitors’ offerings

12. The Company’s Microenvironment
Customers
The company might target any or all types of customer markets
Consumer markets
Business markets
Government markets
International markets

13. The Company’s Macroenvironment
Major Macroenvironmental Forces

14. The Company’s Macroenvironment
Demographic Environment
Changes in demographics mean changes in markets
Demographic trends include age, family structure, geographic population shifts, educational characteristics, population diversity

15. The Company’s Macroenvironment
Demographic Environment
Changing Age Structure of the Population
Baby boomers include people born between 1946 and 1964
The youngest boomers are in their early 50s; the oldest are in their early 70s

16. Changing Age Structure of the Population
Discussion Question
Changing Age Structure of the Population
Think ahead to 10 years in the future. For what types of products and services will baby boomers represent a prime target?

17. The Company’s Macroenvironment
Demographic Environment
Changing Age Structure of the Population
Generation X includes people born between 1965 and 1976
High parental divorce rates
High employment for the mothers
Concerned about the environment
Respond to socially responsible companies
Less materialistic
‘Family comes first, career second’ thought

18. The Company’s Macroenvironment
Demographic Environment
Changing Age Structure of the Population
Generation Y (Millenials) includes people born between 1977 and 2000
Internet generation

19. Changing Age Structure of the Population
Discussion Question
Changing Age Structure of the Population
Do marketers need to create seperate products and marketing programs for each generation?

20. The Company’s Macroenvironment
Demographic Environment
The Changing Family Structure
More people are:
Divorcing or separating
Need for housework especially for men
Choosing not to marry
Choosing to marrying later
Marrying without intending to have children
Increased number of working women
Stay-at-home dads
Entertainment

21. Demographic Environment The Changing Family Structure
Discussion Question
Demographic Environment
The Changing Family Structure
Increased number of working women
What does that imply to a marketer?
What type of products become valuable?
How does it influence the Internet based companies?

22. The Company’s Macroenvironment
Demographic Environment
Geographic Shifts in Population
Trends include:
Migratory movements between and within countries
Moving from rural to metropolitan areas
Changes in where people work
Telecommuting
Home office
Divorcing or seperating

23. The Company’s Macroenvironment
Demographic Environment
Changes in the Workforce
Trends include:
More educated
More white collar
More professional
Increased demand for quality products, books, magazines, travel, computers and Internet services

24. The Company’s Macroenvironment
Economic Environment
Economic environment consists of factors that affect consumer purchasing power and spending patterns
Changes in income
Income distribution
Income levels
Changing consumer spending patterns

25. The Company’s Macroenvironment
Economic Environment
Changes in Consumer Spending Patterns
Ernst Engel—Engel’s Law
As income rises:
The percentage spent on food declines
The percentage spent on housing remains constant
The percentage spent on savings increases

26. The Company’s Macroenvironment
Economic Environment
Target’s response to great recession
Target’s move from
“Expect More” to
“Expect More. Pay Less.”
value proposition.

27. The Company’s Macroenvironment
Natural Environment
Natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities
Trends
Shortages of raw materials
Increased pollution
Increased government intervention
Environmentally sustainable strategies
Green marketing

28. The Company’s Macroenvironment
Technological Environment
Most dramatic force in changing the marketplace with many positive and negative effects
Rapid change
Provides new markets and new opportunities
Internet
Miniaturization
Weapons
Credit cards
Communication

29. The Company’s Macroenvironment
Political Environment
Political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society

30. The Company’s Macroenvironment
Political Environment
Legislation regulating business
Public policy to guide commerce—sets of laws and regulations that limit business for the good of society at large
Increasing legislation
Protect companies
Protect consumers
Protect the interests of society

31. The Company’s Macroenvironment
Cultural Environment
Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors

32. The Company’s Macroenvironment
Cultural Environment
Persistence of Cultural Values
Core beliefs and values have a high degree of persistence, are passed on from parents to children, and are reinforced by schools, religious places, businesses, and government
Secondary beliefs and values are more open to change

33. The Company’s Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values
Major cultural values of a society are expressed in people’s views of:
Themselves
Others
Organization
Society
Nature and the universe

34. The Company’s Microenvironment
Cultural Environment
Shifts in Secondary Cultural Values
People’s views of themselves
People use products, brands and services as a means of self-expression
People’s views of others
Recent trend is “cocooning”, going out less with others, staying home more to enjoy the comforts

35. The Company’s Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values
People’s views of organizations
People’s views of society
Some want to defend it
Some want to change it
Some want to leave it

36. The Company’s Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values
People’s views of nature
Some feel ruled by it
Some feel in harmony with it
Some seek to master it
People’s views of the universe
Renewed interest in spirituality

37. Responding to the Marketing Environment
Views on Responding
Proactive – Who make things happen
Taking aggressive actions to affect forces in the environment
Reactive – Who watch things happen
Watching and reacting to forces in the environment
Uncontrollable – Who wonder what’s happened
Reacting and adapting to forces in the environment