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Chapter ThreeAnalyzing the Marketing Environment 3- #Copyright 2012 Pearson Education, Inc. Publishing as Prentice Halli t s good and good for you3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall1Analyzing the Marketing EnvironmentThe Companys MicroenvironmentThe Companys MacroenvironemntThe Demographic Marketing EnvironmentThe Economic EnvironmentThe Natural EnvironmentThe Technological EnvironmentThe Political and Social EnvironmentThe Cultural EnvironmentResponding to the Marketing Environment

Topic Outline3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall2

The Marketing EnvironmentThe marketing environment includes the actors and forces outside marketing that affect marketing managements ability to build and maintain successful relationships with customers

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The Marketing EnvironmentMicroenvironment consists of the actors close to the company that affect its ability to serve its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics

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The Companys MicroenvironmentActors in the Microenvironment

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The Companys MicroenvironmentTop managementFinanceR&DPurchasingOperationsAccounting

The Company

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallNote to Instructor

Discussion QuestionsWhat types of collaboration do there need to be between the departments? How might projects be integrated between marketing and finance? How might projects be integrated between marketing and information systems?

This question on finance could lead to a discussion about budgeting for marketing. The collaboration between marketing and IS could lead to discussions of market research, ordering systems, and customer relationship management systems.6

The Companys MicroenvironmentProvide the resources to produce goods and servicesTreat as partners to provide customer value

Suppliers3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall7

The Companys MicroenvironmentHelp the company to promote, sell and distribute its products to final buyersMarketing Intermediaries

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallNote to InstructorThe text explains how Coke delivers value for their marketing intermediaries:They understand each retailer partners businessThe conduct consumer research and share with partnersThey develop marketing programs and merchandising for partners

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The Companys MicroenvironmentTypes of Marketing Intermediaries

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallResellers are distribution channel firms that help the companyfind customers or make sales to them.Physical distribution firms help the company stock and move goods from their points oforigin to their destinations. Marketing services agencies are the marketing research firms, advertisingagencies, media firms, and marketing consulting firms that help the company target andpromote its products to the right markets. Financial intermediaries include banks, credit companies,insurance companies, and other businesses that help finance transactionsor insure against the risks associated with the buying and selling of goods.9The Companys MicroenvironmentFirms must gain strategic advantage by positioning their offerings against competitors offerings

Competitors

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallNote to InstructorStudents should note that the competition is just a click away with online purchasing. This link goes to Bizrateone of many comparison shopping sites online. Enter a product like coffee makers to see the competing products and retailers for this category.10

The Companys MicroenvironmentPublics

Any group that has an actual or potential interest in or impact on an organizations ability to achieve its objectivesFinancial publicsMedia publicsGovernment publicsCitizen-action publicsLocal publicsGeneral publicInternal publics

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall11The Companys MicroenvironmentConsumer marketsBusiness marketsGovernment marketsInternational markets

Customers

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallConsumer markets consist of individuals.Business markets buy goods and services for furtherprocessing or use in their production processes, whereas reseller markets buy goods andservices to resell at a profit. Government markets consist of government agencies that buy goodsand services to produce public services or transfer the goods and services to others who needthem. International markets consist of these buyers in other countries, including consumers,producers, resellers, and governments. Each market type has special characteristicsthat call for careful study by the seller.12

The Companys Macroenvironment

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall13The Companys MacroenvironmentDemography: the study of human populations-- size, density, location, age, gender, race, occupation, and other statisticsDemographic environment: involves people, and people make up marketsDemographic trends: shifts in age, family structure, geographic population, educational characteristics, and population diversity

Demographic Environment3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall14

The Companys MacroenvironmentChanging age structure of the populationBaby boomers include people born between 1946 and 1964Most affluent Americans

Demographic Environment

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallNote to InstructorThere are many Web sites targeted to boomers including this link to Boomers International. Before following the link it might be interesting to ask the following:

Discussion QuestionsWhat type of information boomers might be seeking? 15

The Companys MacroenvironmentGeneration X includes people born between 1965 and 1976High parental divorce ratesCautious economic outlookLess materialisticFamily comes firstDemographic Environment3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall16

The Companys MacroenvironmentMillennials (gen Y or echo boomers) include those born between 1977 and 2000Comfortable with technologyTweens (ages 812)Teens (1319)Young adults (20s)Demographic Environment3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall17

The Companys MacroenvironmentGenerational marketing is important in segmenting people by lifestyle of life state instead of age

Demographic Environment

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The Companys MacroenvironmentMore people are:Divorcing or separatingChoosing not to marryChoosing to marry laterMarrying without intending to have childrenIncreasing number of working womenIncreasing number of stay-at-home dads

Demographic Environment3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall19

The Companys MacroenvironmentGrowth in U.S. West and South and decline in Midwest and NortheastMove from rural to metropolitan areasChange in where people workTelecommutingHome office

Demographic Environment

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallAsk the studentsWhy do they think these geographic shifts in population are happening.Where will they choose to live when they finish their education, and why would they make the choice?20The Companys MacroenvironmentChanges in the WorkforceMore educatedMore white collar

Demographic Environment

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallNote to InstructorStudents are probably very familiar with job search sites such as this link to monster.com. It might be interesting to compare the listings for white collar versus blue collar job opportunities including the associated pay and benefits.21The Companys MacroenvironmentDemographic EnvironmentIncreased Diversity

Markets are becoming more diverseInternationalNationalIncludes:EthnicityGay and lesbianDisabled

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The Companys MacroenvironmentEconomic environment consists of factors that affect consumer purchasing power and spending patternsIndustrial economies are richer marketsSubsistence economies consume most of their own agriculture and industrial output

Economic Environment

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallThe economicenvironment can offerboth opportunities and threats. Forexample, facing a still-uncertaineconomy, luxury car maker Infiniti nowpromises to make luxury affordable.23

The Companys MacroenvironmentValue marketingoffering financially cautious buyers greater valuethe right combination of quality and service at a fair price

Economic Environment

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallNote to InstructorThis graphic highlights a car targeted to Indias growing middle class.

Discussion QuestionsWhat changes might there be in U.S. income over the next year? What are positioned as value cars.

The students might quote current economic declines or rises. The value cars will probably include some of the smaller cars by Kia, Ford, Honda, and Toyota.24The Companys MacroenvironmentNatural environment: natural resources that are needed as inputs by marketers or that are affected by marketing activitiesTrendsIncreased shortages of raw materialsIncreased pollutionIncreased government interventionIncreased environmentally sustainable strategies

Natural Environment

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallNote to InstructorThis Web link connects to greenbiz.com. There are several Web sites like this that provide information on business as to how to practice green strategies including green marketing.

GE is using its ecomagination to create products for a better worldcleaneraircraft engines, cleaner locomotives, cleaner fuel technologies. Taken together, for instance, allthe GE Energy wind turbines in the world could produce enough power for 2.4 million U.S.homes. And in 2005, GE launched its Evolution series locomotives, diesel engines that cut fuelconsumption by 5 percent and emissions by 40 percent compared to locomotives built just a yearearlier. Up next is a triumph of sheer coolness: a GE hybrid diesel-electric locomotive that, justlike a Prius, captures energy from braking and will reduce fuel consumption by 15 percent andemissions by as much as 50 percent compared to most locomotives in use today.25The Companys MacroenvironmentTechnological Environment

Most dramatic force in changing the marketplaceNew products, opportunitiesConcern for the safety of new products

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallNote to Instructor

Discussion QuestionAsk students what changes they have seen in technology in the past four years including medical products, communications, and media. They will most likely talk about the use of artificial organs and stem cell research, the growth of PDAs like the iPod, and the use of new media products including DVR or TiVo.

26The Companys MacroenvironmentPolitical environment laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society

Political and Social Environment

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall27The Companys MacroenvironmentLegislation regulating businessIncreased legislationChanging government agency enforcementIncreased emphasis on ethicsSocially responsible behaviorCause-related marketing

Political and Social Environment

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The Companys MacroenvironmentCultural environment consists of institutions and other forces that affect a societys basic values, perceptions, and behaviors

Cultural Environment3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallCultural factors stronglyaffect how people thinkand how they consume. So marketersare keenly interested in the cultural29The Companys MacroenvironmentCore beliefs and values are persistent and are passed on from parents to children and are reinforced by schools, churches, businesses, and governmentSecondary beliefs and values are more open to change and include peoples views of themselves, others, organization, society, nature, and the universe

Cultural EnvironmentPersistence of Cultural Values

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The Companys MacroenvironmentPeoples view of themselvesPeople vary in their emphasis onserving themselves versus serving others.Peoples view of othersMore cocooning staying home, home cooked meals

Cultural EnvironmentShifts in Secondary Cultural Values3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallNote to Instructor.31The Companys MacroenvironmentPeoples view of organizationsDecline of loyalty toward companiesPeoples view of societyPatriots defend itReformers want to change itMalcontents want to leave it

Cultural EnvironmentShifts in Secondary Cultural Values

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice Hall32The Companys MacroenvironmentCultural Environment Shifts in Secondary Cultural Values

Peoples view of natureSome feel ruled by itSome feel in harmony with itSome seek to master itPeoples view of the universeRenewed interest in spiritualityDeveloped more permanent valuesfamily, community, earth, faith, ethics

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallAsk the students about their cultural values regarding nature and the universe. Do they see a difference between what the student values versus what their parents value?33Responding to the Marketing EnvironmentViews on Responding

3-#Copyright 2012Pearson Education, Inc. Publishing as Prentice HallRather than simplywatching and reacting,companies should take proactive stepswith respect to the marketingenvironment.34

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