the marketing environmentdeltauniv.edu.eg/new/businessadministration/wp-content/... ·...

The Marketing Environment

3

3 - 2

The Company’s Macroenvironment

• Demographic environment

• Economic environment• Natural environment• Technological

environment• Political environment• Cultural environment

3 - 3


Demographic Environment

Demography is the study of human populations in terms of size, density, location, age, gender, race occupation, and other statistics

Demographic environment is important because it involves people, and people make up markets

Demographic trends include age, family structure, geographic population shifts, educational characteristics, and population diversity

3 - 4


Demographic Environment

3 - 5


Baby boomers include people born between 1946 and 1964

• Most affluent Americans

Demographic EnvironmentChanging Age Structure of the Population

http://www.ameriprise.com/amp/individual/products/default.asp

3 - 6



Generation X includes people born between 1965 and 1976

• High divorce rates• Concerned about the environment• Respond to socially responsible companies• Less materialistic• Quality of life• Consumer organizations, environment groups, and

minority groups

3 - 7


Generation Y includes people born between 1977 and 2000

• Internet generation


http://www.scion.com/

3 - 8



Generational marketing is important in segmenting people by lifestyle of life state instead of age

3 - 9


Demographic EnvironmentThe Changing American Family

More people are:• Divorcing or separating• Choosing not to marry• Choosing to marrying later• Marrying without intending to have children• Higher divorce rates• Increased number of working women• Stay-at-home dads

3 - 10


Trends include:• Migratory movements between

and within countries• Moving from rural to metropolitan

areas• Changes in where people work

• Telecommuting• Home office• Divorcing or separating

Demographic EnvironmentGeographic Shift in Population

http://www.officeproducts.fedexkinkos.com/

3 - 11


Demographic EnvironmentChanges in the Workforce

Trends include:• More educated• More white collar• More professional

3 - 12


Demographic EnvironmentIncreased Diversity

Markets are becoming more diverse

• International• National

• Includes:• Ethnicity• Gay and lesbian• Disabled

http://www.allstate.com/

3 - 13


Economic Environment

Economic environment consists of factors that affect consumer purchasing power and spending patterns

• Subsistence economies consume most of their own agriculture and industrial output

• Industrial economies are richer markets

3 - 14


Economic EnvironmentChanges in Income

Value marketing involves ways to offer financially cautious buyers greater value—the right combination of quality and service at a fair price

3 - 15


Economic EnvironmentChanges in Income

Income distribution• Upper-class consumers• Middle-class consumers• Working-class consumers• Underclass consumers

3 - 16


Economic EnvironmentChanges 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

3 - 17


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• Increase government intervention• Environmentally sustainable strategies

• Green marketing

3 - 18


Most dramatic force in changing the marketplace with many positive and negative effects

• Internet• Medicine• Miniaturization• Weapons• Credit cards• Communication

Technological Environment

3 - 19


Political Environment

Political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society

• 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

3 - 20


Political Environment

Increasing legislation protects:• Companies• Consumers• The interests of society

3 - 21

Table 3.1Major U.S. Legislation Affecting Marketing

3 - 22


Political EnvironmentChanging Government Agency Enforcement

• Federal Trade Commission• Food and Drug Administration• Federal Communications Commission• Federal Energy Regulatory Commission• Federal Aviation Administration• Consumer Product Safety Commission• Environmental Protection Agency

3 - 23


Political EnvironmentIncreased Emphasis on Ethics and Socially Responsible

Actions

Socially responsible behavior occurs when firms actively seek out ways to protect the long-term interests of their consumers and the environment

• Cause-related marketing

3 - 24


Cultural Environment

Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors

3 - 25


Cultural EnvironmentPersistence of Cultural Values

Core beliefs and values have a high degree of persistence and are passed on from parents to children and are reinforced by schools, churches, businesses, and government

Secondary beliefs and values are more open to change

3 - 26


Cultural EnvironmentShifts in Secondary Cultural Values

Major cultural values of a society are expressed in people’s view of:

• Themselves• Others • Organization• Society• Nature and the universe

3 - 27



• People’s view of themselves• Yankelovich Monitor’s consumer segments:

• Do-It-Yourselfers—recent movers• Adventurers

• People’s view of others

3 - 28



• People’s view of organizations• People’s view of society

• Patriots defend it• Reformers want to change it• Malcontents want to leave it

3 - 29



• People’s view of nature• Some feel ruled by it• Some feel in harmony with it• Some seek to master it

• People’s view of the universe• Renewed interest in spirituality

http://www.ebfarm.com/

3 - 30

Responding to The Marketing Environment

Views on Responding• Uncontrollable

• React and adapt to forces in the environment

• Proactive• Aggressive actions to affect forces in the

environment

• Reactive• Watching and reacting to forces in the

environment

3 - 31

Discussion Questions

In 2007, McDonald’s announced its most profitable year in 30 years http://www.mcdonalds.com

• What environmental factors helped contribute to this success?

• What environmental factors are opportunities and threats for McDonalds in the future?

http://www.mcdonalds.com/

3 - 32

Review Questions

1. Describe the environmental forces that affect the company’s ability to serve its customers

2. Explain how changes in the demographic and economic environments affect marketing decisions

3. Identify the major trends in the firm’s natural and technological environments

4. Explain the key changes in the political and cultural environments

5. Discuss how companies can react to the marketing environment

3 - 33

PowerPoint created by:

Ronald Heimler

• Dowling College, MBA• Georgetown University, BS Business

Administration• Adjunct Professor, LIM College, NY• Adjunct Professor, Long Island University,

NY• Lecturer, California Polytechnic State

University, Pomona, CA• President, Walter Heimler, Inc.

the marketing environmentdeltauniv.edu.eg/new/businessadministration/wp-content/... ·...

Documents