Marketing I

Lecture 2
Winter Semester 2021/2022
Course Lecturers: Dr. Sara El-Deeb
Dr. Hadeer Hammad
Chapter 3:
Analyzing the Marketing
Environment

2
Agenda
Describe the Understand the Discuss how companies
environmental forces macroenviorment react to the enviorment

1 3 5

2 4

Understand the Identify the major

microenvironment trends and changes

3
A Company’s Marketing Enviornment

4
A Company’s Marketing Enviornment

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 marketing environment is made up of the microenvironment and the

macroenvironment.

The environment offers both opportunities and threats. Marketers need

to watch and adapt their strategies to the changing environment.

5
The Marketing Environment
The Micro & Macroenvironment

A Microenvironment consists of the actors close to the company that affect

its ability to serve its customers- the company, suppliers, marketing
intermediaries, customers, competitors, and publics.
A Macroenvironment consists of the larger societal forces that affect the
microenvironment—demographic,economic,natural, technological, political,
and cultural forces.

6
The Marketing Environment

Demographic Economic

Intermediaries Customers
Natural Cultural
Suppliers Publics
Marketing
Management
Company Competitors

Technological Micro Environment Political/Legal

Macro Environment
7
The Marketing Environment
The Microenvironment

A Microenvironment consists of the actors close to the company that affect

its ability to serve its customers- the company, suppliers, marketing
intermediaries, customers, competitors, and publics.

8
The Microenvironment
The Company

In designing marketing plans, marketing management takes other company

groups into account.

₋ Top management
₋ Finance
₋ R&D
₋ Operations
₋ Accounting

9
The Microenvironment
The Suppliers

Provide the resources to produce goods & services

Treated as partners to provide customer value

10
The Microenvironment
Marketing Intermediaries

Marketing intermediaries are firms that help the company to promote, sell,
and distribute its goods to final buyers.

Physical
Resellers
distribution firms

Marketing
Financial
services
intermediaries
agencies

11
The Microenvironment
Marketing Intermediaries

Resellers are distribution channel firms that help the company

find customers or make sales to them. These include
wholesalers and retailers that buy and resell
merchandise.

firms that help the company to stock and move

Physical distribution firms goods from their points of origin to their destinations.

Copyright © 2011 Pearson Education

Ch 3 -
8

12
The Microenvironment
Marketing Intermediaries

are the marketing research firms, advertising

Marketing services agencies agencies, media firms, and marketing consultancy
firms that help the company target and promote its
products to the right markets.

include banks, credit companies, insurance companies,

Financial intermediaries
and other businesses that help finance transactions or
insure against the risks associated with the buying and
selling of goods.

13
The Microenvironment
Competitors

Firms must gain strategic advantage by positioning their offerings against

competitors’ offerings.

Competitive Advantage is an advantage over competitors gained by

offering greater customer value, either through lower prices or by
providing more benefits that justify higher prices.

14
The Microenvironment
Competitors

Direct Competition: Organizations offering same products or services to the same

customer base.

Indirect Competition: Organizations offering different products or services but

satisfying the same need

15
The Microenvironment
Publics

Publics are any groups that have an actual or potential interest in or

impact on an organization’s ability to achieve its objectives.

Government Media
Publics Publics

Citizen-
General Internal
action
Publics Publics
Publics

16
The Microenvironment
Publics

Citizen-
Government
action
Publics
Publics

Media Internal
Publics Publics

17
The Microenvironment
Customers

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

Consumer Markets Business Markets Reseller Markets

Government Markets International Markets

18
The Microenvironment
Customers

Consumer markets consist of individuals and households that buy goods and
services for personal consumption.

19
The Microenvironment
Customers

Business markets are those who buy goods and services for further processing to
produce their own product.

Consumer Markets

20
The Microenvironment
Customers

Retailer markets are those who buy goods and services to resell at a profit.

Consumer Markets

21
The Microenvironment
Customers

Government markets consist of government agencies that buy goods to produce

public services or transfer the goods and services to others who need them.

Consumer Markets

22
The Microenvironment
Customers

International markets are buyers in other countries, including consumers, resellers

& governments.

Consumer Markets

23
The Microenvironment
Example: Ford vs. Firestone

Consumer Markets

24
The Microenvironment
Example: Ford vs. Firestone

Consumer Markets

25
The Marketing Environment
The Macroenvironment

A Macroenvironment consists of the larger societal forces that affect the

microenvironment—demographic,economic,natural, technological, political,
and cultural forces.

26
The MacroEnvironment
Demographic Environment

Demography is the study of human populations in terms of size, density,

location, age, gender, occupation, and other statistics. The 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.

27
Demographic Environment
Example: Changing Family Structure

₋ Number of working mothers

₋ Number of children in the family

28
Demographic Environment
Changing Age Structure

Born 1997-2012 Born 1977-2000 Born 1965-1976 Born 1946-1964

(9-24) (21-44) (45-56) (57-75)

29
Demographic Environment
Changing Age Structure

Baby Boomers – born 1946 to 1964 (57-75)

₋ This generation accounts for about 30% of the Arab population
₋ Baby boomers “think young” no matter how old they are
₋ Baby boomers are retiring later and working more after retirement
₋ Profitable market for financial services, luxury goods, home improvements,
holidays, travel, health and fitness products.

30
Demographic Environment
Example: Baby Boomers

31
Demographic Environment
Example: Baby Boomers

32
Demographic Environment
Changing Age Structure

Generation X – born between 1965 and 1976 (45 – 56)

This generation tends to display the following traits:

₋ Skepticism
₋ Cautious economic outlook
₋ Less materialistic
₋ Family comes first
₋ Research products before considering a purchase

33
Demographic Environment
Changing Age Structure

Millennials (Generation Y or Echo Boomers) – born between 1977 and

2000 (21-44)

₋ Immersed in a world of digital technology

₋ Open and adaptive to change

34
Demographic Environment
Example: Millennials

35
Demographic Environment
Changing Age Structure

Generation Z– born between 1997-2012 (9-24)

- Digital natives
- Educated
- Multi-taskers
- Interactive
- Eager to stand out
- Brand relationship is important

36
Demographic Environment
Changing Age Structure

Do you think using Generational Marketing is effective?

37
Economic Environment

The economic environment consists of factors that affect consumer purchasing

power and spending patterns.

Spending Pattern is how do you spend your unit of currency on different product
categories. Food? Clothes?

Examples: Changes in income, income distribution across social classes, recession,

inflation rates, interest rates.

38
Economic Environment

Nations vary greatly in their levels and distribution of income:

Industrial Economies are richer markets for many kinds of products.

Subsistence Economies consume most of their own agriculture and industrial

output. They offer few marketing opportunities.

Developing Economies in between and can offer outstanding marketing

opportunities.

39
Economic Environment
Example: Rising Middle Class in India

40
Economic Environment
Example: Rising Income in Arab Countries

41
Economic Environment
Example: Spending Patterns

42
Natural Environment

The natural environment involves the natural resources that are needed as inputs
by marketers, or that are affected by marketing activities.

Trends in the Natural Environment:

-Shortage of raw materials

-Increased pollution
-Increased government intervention

43
Natural Environment
Example: Sustainable Practices

44
Natural Environment
Example: Vitality Air Company

45
Technological Environment

The technological environment is the most dramatic force in changing the

marketplace.
- It creates new products and opportunities.

- Safety of new products is always a concern.

Companies must watch technological environment closely so the products do not

be outdated and they do not miss new opportunities.

46
Technological Environment
Example: New Tech Ideas

47
Political/Legal Environment

The Political environment consists of laws, government agencies, and pressure

groups that influence or limit various organizations and individuals in a given
society.

Business legislation is intended to protect:

- companies from each other (e.g. unfair competition)

- consumers from unfair business practices (e.g. low quality products, deceptive advertising)
- protect the interests of the society against unrestrained business behavior (e.g. clean
production processes)

48
Political Environment
Example: Bans of Comparative ads

49
Political Environment
Example: Ban of offensive ads

50
Political Environment
Example: Ban of offensive ads

51
Political Environment
Example: Food Labeling Laws

52
Political Environment
Increased Emphasis on Ethics and Socially Responsible Actions

53
Cultural Environment

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

54
Cultural Environment

Core beliefs and values are persistent 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 and include people’s views
of themselves, others, organizations, society, nature, and the universe.

55
Cultural Environment
Example: Cultural Values

56
Cultural Environment
Example: Cultural Values

2011 FAIRY dishwasher detergent

Arabian ad (Sayidaty magazine)

57
Cultural Environment
Example: Socio-cultural Trends

58
Responding to the Marketing Environment

Proactive Response Reactive Response

Take aggressive actions Watch and react to

to affect forces in the forces in the
environment environment

59
Responding to the Marketing Environment
Example: Qatar Airways Responding to Laptop Ban

60
Responding to the Marketing Environment

Qatar Airways highlights the process to customers on their website:

“Complimentary laptop will be available for Business

Class passengers to use while travelling on all US-
bound flights from next week and can be collected after
boarding. Customers will be able to download their work
on to a USB before stepping on board to pick up where
they left-off. Qatar Airways is offering a special service
at the gate for all passengers, whereby any electronic
items prohibited by the new ban will be collected and
securely packaged. These will be tagged, loaded as
check-in baggage and returned safely to the customer
on arrival to the US.”

61
Thanks!
Any questions?

62