Chapter Three

Analyzing the Marketing Environment

Analyzing the Marketing Environment

• Microenvironment
• Macro Environment
• Responding to the Marketing Environment
 The Marketing Environment

The marketing environment includes the actors and

forces outside marketing that affect marketing
management’s ability to build and maintain successful
relationships with customers
 The Company’s Marketing Environment

More than any other group in the company,

marketers must be environmental trend trackers and
opportunity seekers. Although every manager in an
organization should watch methods marketing have
two special aptitudes.
 Microenvironment

Microenvironment 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
The Company’s Microenvironment

Actors in the Microenvironment

 The Company’s Microenvironment

1.The Company

• In designing marketing plans, marketing management takes other

company groups into account such as top management, finance,
research and development
• (R & d) , purchasing, operations, and accounting.
• Top management
• Finance
• R&D
• Purchasing • Operations • Accounting
 The Company’s Microenvironment

2. Suppliers

• Suppliers form an important link in the company’s overall customer value delivery
network.
• Most marketers today treat their suppliers as partners in creating and delivering
customer value.
• Provide the resources to produce goods and services
 The Company’s Microenvironment
3. Marketing Intermediaries

• Marketing intermediaries

help the company promote, sell, and

distribute its products to final buyers.
They include resellers, physical
distribution firms, marketing services
agencies, and financial intermediaries.
 Types of Marketing Intermediaries

Marketing
Resellers services
agencies

Physical
Financial
distribution
intermediaries
firms
Resellers are distribution channel firms that help the company find customers or
make sales to them. These include wholesalers and retailers who buy and resell
merchandise.

Physical distribution firms help the company to stock and move goods from their
points of origin to their destinations.
Marketing services agencies are the marketing research firms, advertising agencies,
media firms, and marketing consulting firms that help the company target and promote
its products to the right markets.

Financial intermediaries include banks, credit companies, insurance companies, and

other businesses that help finance transactions or insure against the risks associated
with the buying and selling of goods.
Marketers recognize the importance of working with their intermediaries as partners
rather than simply as channels through which they sell their products.

For example, when Coca-cola signs on as the exclusive beverage provider for a fast food
chain, such as McDonald’s or Subway, it provides much more than just soft drinks, it
also pledges powerful marketing support.
-They understand each retailer partner’s business

-hey conduct consumer researsh and share with partners

(determine which Coke brands customers are preferred in each areas)

They develop programs and merchandising for partners,

that help the retail partners to improve their beverage sales and profits.
 The Company’s Microenvironment

4.Competitors

Marketers must do more than simply adapt to the needs of target

consumers. They also must gain strategic advantage by positioning their
offerings strongly against competitors' offerings in the minds of consumers.

No single competitive marketing strategy is best for all companies.

Each firm should consider its own size and industry position compared to
those of its competitors.
 The Company’s Microenvironment
5.Publics
Any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its objectives

– Financial publics
– Media publics
– Government publics – Citizen-action publics – Local publics
– General public
– Internal publics
 Publics

1- Financial publics
influence the company’s ability to obtain funds. Banks, investment houses and
stockholders are the major financial publics.
2-Media publics
carry news, features, and editorial opinion .
3-Government publics – Citizen-action publics – Local publics
Management must take government developments into account.
4-Citizen-action publics
A company’s marketing decisions may be questioned by consumer
organizations, environmental groups, etc
5-General public
The general public’s image of the company affects its buying

6-Local publics
include neighborhood residents and community organizations. Large
companies usually appoint a community relations officer to deal with the
community, attend meetings, and contribute to worthwhile causes.
For example, the Avon Foundation’s long-running Walk for Breast Cancer
efforts recognize the importance of community publics.
7-Internal publics

include workers, managers, volunteers, and the board of directors.

 6.Customers

Five types of customer markets. The company may target any or all of these five
markets.

Consumer markets
Business markets
Reseller markets
Government markets
International markets
 Customers

Consumer markets: individuals and households that buy goods and

services for personal consumption.
Business markets: buy goods and services for further processing or for
use in their production process.
Reseller markets: buy goods and services to resell at a profit.
Government markets: made up of government agencies that buy goods
and services to produce public services or transfer the goods & services to
other who need them.
International markets: buyers in other countries, including consumers,
producers, resellers, and governments.
 The Company’s Macro environment
The company and all of the other actors operate in al larger microenvironment of
forces that shape opportunities and pose threats to the company.
 1.Demographic Environment

Demography: the study of human populations-- size, density, location, age, gender,
race, occupation, and other statistics
Demographic environment: involves people, and people make up markets
Demographic trends: shifts in age, family structure, geographic population,
educational characteristics, and population diversity
Changes in the demographic environment have major implications for business

Chinese government passed regulations limiting families to one child

each.

As a result, Chinese children – known as “little emperors ” have

been showered with attention and luxuries, creating
opportunities for marketers under what’s known as the “six –
pocket syndrome”
Changing age structure of the population

Baby boomers include people born between 1946 and 1964

The youngest boomers are now in their early-to-mid forties;
the oldest are entering their sixties. Boomers are spending $30
billion a year on antiaging products and services.
rethinking the purpose and value of their work, responsibilities, and relationships.
spending more carefully and planning to work longer the wealthiest generation in U.S. history

Generation X includes people born between 1965 and 1976 Others call them the “baby busters.”
High parental divorce rates
Cautious economic outlook
Less materialistic
Family comes first
Lag behind on retirement savings
Demographic Environment

Millennials include those born between 1977 and 2000 Includes :

Tweens (ages 8–12)
Teens (13–19)
Young adults (20’s)
-Most financially strapped generation
-Higher unemployment and saddled with more debt
-Comfortable with technology
Demographic Environment

Changing American Family

More people are:

Divorcing or separating
Choosing not to marry
Choosing to marry later
Marrying without intending to have children
Increased number of working women
Stay-at-home dads
 Demographic Environment

Changes in the Workforce

a. More educated
The rising number of educated people will increase the demand for quality
products, books, magazines, travel, personal computers and internet
services.
b. More white collar
The workforce also is becoming more white collar, the proportion of
managers and professionals is account for more than30%. Job growth is now
strongest 4 professional workers and weakest 4 manufacturing workers.
 2.Economic Environment

consists of factors that affect consumer

purchasing power and spending
patterns
Economic Environment

A. Changes in Consumer Spending

Economic factors can have a dramatic effect on consumer spending and

buying behavior.

Value marketing
offering financially cautious buyers greater value—
the right combination of quality and service at a fair price
Economic Environment

B. Changes in Consumer Spending Patterns

Consumers at different income levels have different spending patterns

As income rises:
The percentage spent on food declines
The percentage spent on housing remains constant
The percentage spent on savings increases

Changes in major economic variables such as income, cost of living, interest rates,
and savings and borrowing patterns have a large impact on the marketplace
Companies watch these variables by using economic forecasting.
C. Income distribution

Marketers should pay attention to income distribution as well as

income levels. Over the past several decades, the rich have grown
richer, the middle class has shrunk, and the poor have remained poor.
 The Company’s Macro Environment

3.Natural Environment

Natural environment : natural resources that are needed as inputs by marketers or

that are affected by marketing activities.

Trends
Increased shortages of raw materials
Increased pollution
Increased government intervention
Increased environmentally sustainable strategies
 Environmentally sustainable strategies

an effort to create a world economy that the planet can support

indefinitely. They are responding to consumer demands with more
environmentally responsible products.
Some companies are developing recycled or biodegradable packaging,
recycled materials and components, better pollution controls, and more
energy efficient operations. Hp is pushing legislation to force recycling of
old TV’s, computers, and other electronic gear
 The Company’s Macro Environment
4.Technological Environment

The technological environment is perhaps the most dramatic force

now shaping our destiny. Technology has released such wonders as
antibiotics, robotic surgery, miniaturized electronics, smart phones
and the internet. New products, opportunities

Concern for the safety of new products

 The Company’s Macro Environment

5.Political and Social Environment

 The Company’s Macro Environment

6.Cultural Environment

Cultural environment consists of institutions

and other forces that affect a society’s basic
values, perceptions, and behaviors
Cultural Environment

1.Persistence of Cultural Values

A. Core beliefs and values are persistent and are passed on from parents to children and
are reinforced by schools, churches, businesses, and government

B. Secondary beliefs and values are more open to change and include people’s views of
themselves, others, organization, society, nature, and the universe
Cultural Environment

2.Shifts in Secondary Cultural Values

People’s view of themselves
People vary in their emphasis on
serving themselves versus serving others.
People’s view of others
More “cocooning” – staying home, home cooked meals
People’s view of organizations
Decline of loyalty toward companies
People’s view of society
Patriots defend it
Reformers want to change it
Malcontents want to leave it
Cultural Environment

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
Developed more permanent values
family, community, earth,
spirituality, ethics
 Responding to the Marketing Environment
Views on Responding

Proactive Reactive Uncontrollable

Aggressive Watching and React and

actions to reacting to adapt to
affect forces forces in the forces in the
in the environment environment
environment
Geert Hofstede
 Innovation
Vertical

Horizontal
Behavior Segmentation

Community Confirmation
Digital
Identity