1. analyzing the marketing environment
four
analyzing the
marketing environment
Chapter 4 – Analyzing the Marketing Environment
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Analyzing the Marketing Environment
LO1 Outline how customers, the company, competitors, and corporate partners affect marketing strategy.
LO2 Explain why marketers must consider their macroenvironment when they make decisions.
LO3 Describe the differences among the various generational cohorts.
LO4 Identify the various social trends.
These questions are the learning objectives guiding the chapter and will be explored in more detail in the following slides.
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3. A Marketing Environment Analysis Framework
In all marketing activities, the consumer is at the center. Anything that affects consumers affects marketers. Any change in one of these environments likely requires an adjustment to the firm’s marketing mix. By identifying potential environmental trends, firms often can take proactive steps.
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4. The Immediate Environment
The immediate environment includes the firm and its immediate influences, such as competition and corporate partners.
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5. Company Capabilities applied to Core competency
Existing knowledge, facilities, patents, etc.
applied to
Ask students: What are Pepsi’s core competencies? What do they do well? Answer: They know how to bottle beverages, distribute them to stores, and promote their brand.
Ask students: How they capitalized on their core competencies in the face of changing market trends?
Answer: The trend toward more diet-conscious consumers has led to the development of low-calorie alternatives to sodas. Both Coke and Pepsi understood the market had changed and introduced bottled water products with great success. In 2004, Americans consumed 23 gallons of bottled water per person—ten times as much as in 1980.
©M Hruby
New markets, new products, etc.
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6. Competitors Know strengths & weaknesses
Proactive rather than reactive strategy
Competition also significantly affects consumers in the immediate environment. It is therefore critical that marketers understand their firm’s competitors, including their strengths, weaknesses, and likely reactions to the marketing activities.
Chad Baker/Getty Images
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7. Corporate Partners Firms are part of alliances
Align with competitors, suppliers, etc.
Just in Time Delivery Systems (JIT)
D Normark/PhotoLink/Getty Images
Firms must work together to create a seamless system that delivers goods and services to customers when and where they want them. Many attribute a key reason for Wal-Mart’s success is their close relationships with their suppliers.
Siede Preis/Getty Images
©Lars A Niki
From factory
Retailer to
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8. Macroenvironmental Factors
This slide can be used to review this topic instead of the following slides, which provide more in-depth discussions.
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9. Culture Country Culture vs. Regional Culture
Firms often remove brands from the market because of their poor overall sales, but this strategy can backfire when those brands have strong regional support.
For example, the removal of a chowder cracker caused such upheaval among Northeastern consumers that the firm hired a tall ship to reintroduce the cracker to its New England market, where consumers had threatened to boycott all products from the company if the cracker was not returned.
©Brand X Pictures/PunchStock
PhotoLink/Getty Images
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10. Demographics
Provides an easily understood snapshot of the typical consumer in a specific target market
Ask students: What are some typical demographics?
Answer: age, gender, income, education.
Demographic segmentation is probably the most common form of segmentation because the information is so widely available.
BananaStock/JupiterImages
Comstock Images/Alamy
U.S. Census Website
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11. Generational Cohorts
Group activity: Have students brainstorm a list of the defining characteristics of their generation.
Ask students: How does your generation differ from previous generations, such as their parents — the Baby Boomers. What macroenvironmental forces have had the most impact on your generation?
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12. Income Purchasing power is tied to income
Many middle class families feel the decline in purchasing power in recent years
The “middle-class squeeze” is a very real global phenomenon. Many developing countries face similar income inequities to those found in the United States. Pay gaps also cause problems for many new college graduates who find they cannot afford to live on their own and must move back in with their parents.
Courtesy of Hammacher Schlemmer, wwwhammachercom
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13. Education is related to income, which determines spending power=
©Fancy Photographer/Veer
Ask students: Do you plan to continue your education after graduation?
Many students believe they will never return to school after they finish their Bachelors’ degree, but modern conditions make this choice more and more unlikely. Lifelong learning of new skills and new knowledge has become key to survival in the global economy
Brand X Pictures
Education is related to income, which determines spending power
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14. Gender Male/female roles have been shifting
Marketing has changed to reflect these shifts
Male/female roles have been shifting
Women now make up more than 60% of the college population.
Ask students? How do you believe this will affect the workplace in the future?
Ask students? Do you believe that there are still significant gender differences? What are they?
Jochen Sand/Digital Vision/Getty Images
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15. By 2050, minorities will represent 50% of the population.
Ethnicity
By 2050, minorities will represent 50% of the population.
Ask students: What steps can and should marketers take to respond to the changing ethnic mix of the United States?
Many marketers already have adjusted their marketing mix to meet the needs of ethnically diverse segments better. This YouTube video is for a Carlos Mencia Bud Light superbowl ad about teaching English. (always check YouTube links before class).
©2006 Oldemarak, LLC Reprinted with permission The Wendy’s name, design and logo are registered trademarks of Oldemark, Llc and are licensed to Wendy’s International, Inc.
Bud Light Commercial
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16. Health and Wellness Concerns
Social Trends
Price Sensitivity
Health and Wellness Concerns
Greener Consumers
Privacy Concerns
Time-Poor Society
This graphic introduces significant social trends.
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17. Technological Advances
Technology has impacted every aspect of marketing
New products
New forms of communication
New retail channels
Arguably the single most important change in the way we live is the introduction of new technology.
Ask students: What new technologies have you seen at retailers? This web link is for the shoppers tool page of Stop and Shop a large east coast grocery retailer. They offer self-scanners, computer kiosk deli ordering and self checkout.
AP Photo/Ric Feld
Stop and Shop Website
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18. Economic Situation Foreign currency fluctuations
Brand X Pictures
Combined with inflation and interest rates affect firms’ ability to market goods and services
Depending on the time of year, discuss projections about Christmas shopping, vacation planning, or home buying. Various economic factors affect each of these areas. The web link leads to the Consumer Confidence Index which takes into account how consumers feel about how the economy is doing. This economic indicator relates directly to spending.
PhotoLink/Getty Images
Conference Board Website
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19. Political/Regulatory Environment Competitive Practice and Trade Legislation
1890: Sherman Antitrust Act
1914: Clayton Act
1914: Federal Trade Commission
1936: Robinson-Putman Act
1938: Wheeler-Lea Act
1993: North American Free Trade Agreement (NAFTA)
This list includes the major legislation designed to ensure a competitive marketplace and clearly demonstrates the U.S. government’s long history of enacting laws that protect fair trade.
David Hiller/Getty Images
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