Chapter 3 The Marketing Environment

•Chapter 3
The Marketing
Environment
“It is useless to tell a river to stop running; the best thing is to learn how to
swim in the direction.”
-Anonymous
Marketing Environment
- Consists of actors and forces outside marketing
that affect a company’s ability to build and maintain
successful relationships with its target customers
The Company’s Microenvironment
Consist of factors close to the company that affects it ability to serve its customers.
The Company’s Microenvironment
MICROENVIRONMENT
A. The Company
❑ Marketing managers must
work with all departments
of a company.
❑ All Departments have an
impact on the marketing
department’s plans and
actions.
MICROENVIRONMENT
B. Existing Competitors
❑ To be successful, a company must
satisfy needs and wants of
consumers better than competitors
❑ A company should monitor three
variables when analyzing each of its
competitors
❑ Share of Market
❑ Share of Mind
❑ Share of Heart
LEVELS OF COMPETITION
Budget
1.Product Form Competition (Brand) Competition
- Companies that are offering similar
products and services at similar prices. General
2. Product Category Competition (Industry) Competition
- Companies offering the same class of

products. Product
Category
3. General Competition (Form)
- Companies offering a product to serve
the same service.
4. Budget Competition (Generic) Product Form
- All companies that are competing for the
customers' money.
MICROENVIRONMENT
C. Suppliers
❑ Suppliers are firms and individuals
that provide the resources needed
by the company to produce its
goods and services
❑ Suppliers can seriously affect

marketing plans
MICROENVIRONMENT
D. Marketing Intermediaries
❑ Marketing intermediaries help the

company promote, sell, and
distribute its goods to the final
buyers
MICROENVIRONMENT
E. Disintermediation
The elimination of intermediaries
MICROENVIRONMENT
F. Marketing Services
Agencies
❑ Marketing service agencies help
formulate and implement
marketing strategies
❑ Marketing Consulting firms

❑ Advertising agencies
MICROENVIRONMENT
G. Financial intermediaries
❑ Financial intermediaries help
hospitality companies finance their
transactions
MICROENVIRONMENT
H. Customers
1. Consumer 2. Business market
❑ Consist of the individuals and ❑ Business markets buy hospitality

household that purchase hospitality services to facilitate their business.
services. ❑ Sales meeting
❑ Reunions ❑ Annual conventions
❑ Leisure activities ❑ Seminars
❑ Gatherings
MICROENVIRONMENT
H. Customers
3. Resellers 4. Government markets
❑ Purchase the product and resell it.
❑ Tour operators purchase airline ❑ Includes government agencies that
seats, hotel rooms, ground like business purchases hospitality
transportation and restaurant services for individual, group travelers
meal to make a package tour and meetings.
which will be sold to a customer.
MICROENVIRONMENT
H. Customers
5. International markets
❑ Consist of those buyers from other

countries , consumers, business,
resellers and governments.
MICROENVIRONMENT
I. Publics
❑ Any group that has an actual or
potential interest or impact on an
organization’s to achieve its
objectives.
❑ Financial Publics
❑ Media Publics
❑ Government Publics
❑ Citizen-action Publics
❑ Local Publics
❑ General Publics
❑ Internal Publics
The Company’s Macroenvironment
Consists of the larger societal forces that affect the entire microenvironment.
.
A. Competitors
❑ The entrance of future competitors

is often difficult to predict and can
have a major effect on existing
business.
B. Demographic Environment
Demography
❑ Demography is the study of human
populations in terms of size, density,
location, age, gender, race,
occupation, and other statistics
❑ Demographics change over time and

companies must keep up with them
Changing Age Structure of the Population
Baby boomers Generation X
❑ Generation X – 49 million born between
❑ Produced 78 Million post-World War II 1965-1976, the “birth dearth”
babies born between 1946-1964.
❑ They lie in the shadow of boomers
❑ Boomers constitute a lucrative market and lack distinguish
for travel and other leisure activities. characteristics
❑ Baby boomers do not feel old, they ❑ 63% of boomers will research
look for active vacation where they can products before they consider to
have adventure and explore. purchase.
❑ Parents family comes first second
career
❑ They love environment
Changing Age Structure of the Population
Generation Y (echo boomers)
❑ 72 million born between 1977-2000

❑ One thing that millennial’s have in
common is their utter fluency and
comfort with computer, digital and
internal technology.
C. Economic Environment
❑ The economic environment consists

of factors that affect consumer
purchasing power and spending
patterns
❑ It is not enough to have people, the
people must have buying power
Economic Environment
The Global Economy
❑ Global economic dealings, such as
currency exchange rates, have a large
impact on travel and tourism across
the world
D. Natural Environment
❑ The natural environment consists of
natural resources required by
marketers or affected by marketing
activities
❑ Anyone involved in tourism is
responsible for protecting the
environment and ensuring
sustainability
E. Technological Environment
❑ The hospitality industry is greatly
affected by changes in
technology
❑ The Internet, computerized
systems, key cards, etc.
❑ The most dramatic force
affecting tourism
F. Political Environment
❑ Made up of laws , government
agencies and pressure groups that
influence the and limit the activities
of various organizations and
individuals in the society.
❑ Increased legislation and

regulation affecting business
❑ Changing government Agency
Enforcement
❑ Increased emphasis on socially
responsible actions and ethics
e.g. MADD and PETA
G. Cultural Environment
❑ The cultural environment includes
institutions and other forces that
affect society’s basic values,
perceptions, preferences, and
behaviors
❑ Persistence of cultural values
❑ Subcultures
Environmental Scanning
1. Determine environmental areas that

require monitoring
2. Determine how the information will be
collected
3. Implement data collection plan
4. Analyze data and use in market planning
process

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•Chapter 3

- Companies oﬀering the same class of

❑ Suppliers can seriously aﬀect

❑ Marketing intermediaries help the

❑ Marketing Consulting ﬁrms

❑ Consist of the individuals and ❑ Business markets buy hospitality

❑ Consist of those buyers from other

❑ The entrance of future competitors

❑ Demographics change over time and

Generation Y (echo boomers)

❑ 72 million born between 1977-2000

❑ The economic environment consists

❑ Increased legislation and

❑ Persistence of cultural values

1. Determine environmental areas that

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