0. The Marketing Environment
Chapter 4

1. Objectives
Know the environmental forces that affect the company’s ability to serve its customers.
Realize how changes in the demographic and economic environments affect marketing decisions.

2. Objectives
Identify the major trends in the firm’s natural and technological environments.
Know the key changes in the political & cultural environments.
Understand how companies can react to the marketing environment.

3. c
Volkswagen
“Millennial fever” set the stage to bring back the VW Beetle
VW’s investment: $ 560 million
Demand quickly outstripped supply
The new VW beetle enjoyed cross-generational appeal
Earned many awards
VW’s Beetle now accounts for over 25% of company sales
Discussion: Is VW’s next nostalgia venture, the “flower-power” Microbus, as likely to succeed?

4. Key Environments Marketing Environment
The actors and forces that affect a firm’s ability to build and maintain successful relationships with customers.

5. Key Environments Aspects of the marketing environment:
Microenvironment:
Actors close to the company
Macroenvironment
Larger societal forces

6. The Microenvironment
Departments within the company impact marketing planning.

7. The Microenvironment
Suppliers help to create and deliver customer value.
Treat suppliers as partners.

8. The Microenvironment
Marketing intermediaries help to sell, promote, and distribute goods.
Intermediaries take many forms.
Resellers
Physical distribution firms
Marketing services agencies
Financial intermediaries

9. The Macroenvironment Customer markets must be studied. Market types
Consumer
Business
Government
Reseller
International

10. The Macroenvironment
Successful companies provide better customer value than the competition
Size and industry position help to determine the competitive strategy.

11. The Macroenvironment Various publics must also be considered.
Government
Media
Financial
Local
General
Internal
Citizen Action Groups

12. Actors in the Microenvironment
Figure 4-1:
Actors in the Microenvironment

13. Major Macroenvironmental Forces
Figure 4-2:
Major Macroenvironmental Forces

14. The Macroenvironment Key Demographic Trends World population growth
Now 6.2 billion
Projected to reach 7.9 billion by 2025

15. The Macroenvironment Key Demographic Trends Changing age structure
The U.S. population consists of seven generational groups.
Baby boomers, Generation X and Generation Y are key groups.
Distinct segments typically exist within these generational groups.

16. The Macroenvironment Key Generations Baby boomers Generation X
Born between 1946 and 1964
Represent 28% of the population; earn 50% of personal income
Many mini-segments exist within the boomer group
Entering peak earning years as they mature
Lucrative market for travel, entertainment, housing and more
Baby boomers
Generation X
Generation Y

17. Discussion Question
The “graying of America” refers to the fact that as baby boomers get older, the average age of the U.S. population increases.
Today, baby boomers are a great target for exotic travel.
Think ahead to 20 years in the future. For what types of products and services will baby boomers represent a prime target?

18. The Macroenvironment Key Generations Baby boomers Generation X
Born between 1965 and 1976
First latchkey children
Maintain a cautious economic outlook
Share new cultural concerns
Represent $125 billion in annual purchasing power
Will be primary buyers of most goods by 2010
Baby boomers
Generation X
Generation Y

19. Discussion Question
Generation X has been described in the past as “working to live” rather than “living to work.”
Do you think that this statement reflects Generation X’s true priorities in life?
Why or why not?

20. The Macroenvironment Key Generations Baby boomers Generation X
Born between 1977 and 1994
72 million strong; almost as large a group as their baby boomer parents
New products, services, and media cater to Generation Y
Computer, Internet and digitally saavy
Challenging target for marketers
Key Generations
Baby boomers
Generation X
Generation Y

21. Figure 4-3:
Seven U.S. Generations

22. The Macroenvironment Key Demographic Trends
Changing American household
Geographic population shifts
Better-educated, more white-collar workforce
Increasing Diversity

23. BusinessNow Zoots Video Clip
Working women value products and services that are convenient to use or that save time.
Click the picture above to play video

24. The Macroenvironment The Economic Environment
Affects consumer purchasing power and spending patterns.
U.S. consumers now spend carefully and desire greater value.

25. The Macroenvironment The Economic Environment
Two types of national economies:
subsistence
industrial

26. The Macroenvironment Key Economic Trends
U.S. income distribution is skewed.
Upper class, middle class, working class, underclass
Rich: getting richer Middle class: shrinking Underclass: still poor
Consumer spending patterns are changing.

27. The Macroenvironment The Natural Environment
Concern for the natural environment has grown steadily, increasing the importance of these trends:
Shortage of raw materials
Increased pollution
Increased governmental intervention

28. Many companies use recycling to help protect natural resources
The Macroenvironment
Many companies use recycling to help protect natural resources

29. The Macroenvironment Key Technological Trends
The technological environment is characterized by rapid change.
New technologies create new opportunities and markets but make old technologies obsolete.
The U.S. leads the world in research and development spending.

30. The Macroenvironment The Political Environment
Includes laws, governmental agencies, and pressure groups that impact organizations and individuals.

31. The Macroenvironment The Political Environment Key trends include:
Increased legislation to protect businesses as well as consumers.
Changes in governmental agency enforcement.
Increased emphasis on ethical behavior and social responsibility.

32. The Macroenvironment
Cause-related marketing is one method of demonstrating social responsibility

33. The Macroenvironment The Cultural Environment
Is composed of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors.

34. The Cultural Environment
The Macroenvironment
The Cultural Environment
Core beliefs are persistent
Passed from parents to children; reinforced by society
Shape attitudes and behavior
Secondary cultural values change and shift more easily
Society’s cultural values are expressed through people’s views of:
Themselves
Others
Organizations
Society
Nature
The Universe

35. Responding to the Marketing Environment
Reactive: Passive Acceptance and Adaptation
Companies design strategies that avoid threats and capitalize upon opportunities.
Proactive: Environmental Management
Use of lobbyists, PR, advertorials, lawsuits, complaints, and contractual agreements to influence environmental forces.