Chapter 3

Analyzing the Marketing

Environment
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 Learning Objectives
3-1 Describe the environmental forces that
affect the company’s ability to serve its
customers.
3-2 Explain how changes in the
demographic and economic environments
affect marketing decisions.
3-3 Identify the major trends in the firm’s
natural and technological environments.
3-4 Explain the key changes in the political
and cultural environments.
3-5 Discuss how companies can react to
the marketing environment.
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 Describe the environmental forces
Learning that affect the company’s ability to
Objective 1 serve its customers.

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 The marketing environment
includes the actors and forces
A Company’s outside marketing that affect
Marketing marketing management’s ability to
Environment build and maintain successful
relationships with target customers.

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A Company’s Marketing Environment

The marketing
environment
consists of a

Microenvironment Macroenvironment

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A Company’s Marketing Environment

1. 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.

2. Macroenvironment consists of the larger societal

forces that affect the microenvironment—demographic,
economic, natural, technological, political, and cultural
forces.
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The Microenvironment

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a. The Microenvironment
1. Company
In designing marketing plans, marketing management takes other company
groups into account.

Top management

Finance

Accounting

Purchasing

Operations

R&D Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

a. The Microenvironment
2. Suppliers
• Provide the resources to produce goods and services
• Treat as partners to provide customer value
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a. The Microenvironment
3. Marketing Intermediaries

Marketing intermediaries are

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

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The Microenvironment
Marketing Intermediaries

Physical
Resellers distribution
firms

Marketing
Financial
services
intermediaries
agencies

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a. The Microenvironment

4. Competitors

Firms must gain strategic

advantage by positioning their
offerings strongly against
competitors’ offerings in the minds
of consumers.
 6. Publics
Any group that has an actual or potential interest
in or impact on an organization’s ability to
achieve its objectives:

• Financial publics
a. The • Media publics
Microenvironment • Government publics
• Citizen-action publics
• Local publics
• General public
• Internal publics

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The Microenvironment

7. Customers Consumer markets

Business markets

Reseller markets

Government Markets

International markets

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

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b. The Macroenvironment

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 b. The Macroenvironment

1.Demographic Demography is the study of human populations—

Environment size, density, location, age, gender, race,
occupation, and other statistics.

Demographic environment involves people, and

people make up markets.

Demographic trends include changing age and

family structures, geographic population shifts,
educational characteristics, and population diversity.

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b. The Macroenvironment
1. Demographic Environment
Changing age structure of the population

Baby Boomers – born 1946 to Millennials – born between 1977 Generation Alpha from 2010 to
1964 and 2000 2024.

1965 and 1976 2000

1946–1964 1977 and 2000 2010–2024

Generation X – born between Generation Z – born after 2000

1965 and 1976

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b. The Macroenvironment
1. Demographic Environment

Generational marketing is important in

segmenting people by lifestyle or life stage and
common values instead of age.

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Macroenvironment
1. Demographic
Environment
b. The

➢Changing structure of family in

Pakistan
• Divorcing or separating
• Choosing to marry later
• Increasing number of working
women
• Division of labor within family
• Increase number of nuclear families
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b. The Macroenvironment
1. Demographic Environment
• Geographic Shifts in Population of Pakistan
➢ Internal migration flows are often linked to the development differential
between urban and rural areas with people moving for better employment
and to overcome poverty
➢ International migration is from Pakistan to more developed nations with the
vast majority, over 4.7 million, residing in the Middle East ( According to 2017
survey).
➢ Change in where people work
• Telecommuting
• Home office

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b. The Macroenvironment
1. Demographic Environment
• Changes in the Workforce
• More educated
• More white- collar jobs
• Markets are becoming more diverse.
• International
• National
• Includes
• Ethnicity
• Disabled
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 b. The Macroenvironment
2. Economic Environment : consists of
factors that affect consumer purchasing
power and spending patterns
➢Industrial economies are richer
markets for many kinds of goods
➢Subsistence economies consume
most of their own agriculture and
industrial output (offer few market
opportunities)
➢Developing economies offer
outstanding market opportunities for the
right kinds of products
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Macroenvironment
1. Economic Environment
➢Economic trends of Pakistan in 2021:
b. The

• GDP growth of 3.94 percent

• Increase in demand for commodities and
value of imports.
• Stagflation which basically means that the
economy is growing at a slow rate, but inflation
and unemployment are relatively high.
• Increase value of US dollar against rupee.
• Introduction of “Ehsaas program” by the
government.
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b. The Macroenvironment
2. Economic Environment

Changes in Consumer Spending

Value marketing involves offering financially

cautious buyers' greater value—the right
combination of quality and service at a fair
price.
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 2. Economic Environment

Income Distribution
The Macroenvironment Over the past several decades, the rich
have grown richer, the middle class has
shrunk, and the poor have remained poor.

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Learning Objective 3

Identify the major trends in the firm’s natural and

technological environments.

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The Macroenvironment
3. The Natural Environment

The natural environment is the physical

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

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 3. The Natural Environment

Trends in the Natural

b. The Environment
Macroenvironment
• Growing shortages of raw materials
• Increased pollution
• Increased government intervention
• Developing strategies that support
environmental sustainability
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b. The Macroenvironment
3. Natural Environment

Environmental sustainability
involves developing strategies
and practices that create a
world economy that the planet
can support indefinitely.

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The
Macroenvironment
4. Technological Environment

• Most dramatic force in changing

the marketplace
• New products and market
opportunities
• Concern for the safety of new
products

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

Learning Objective 4
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 5. Political and Social Environment

b. The
Macroenvironment
The political environment includes
laws, government agencies, and
pressure groups that influence or limit
various organizations and individuals
in a given society.
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b. The Macroenvironment
5. Political and Social Environment

Legislation regulating business

• Increased legislation
• Changing government agency enforcement

Increased emphasis on ethics

• Socially responsible behavior

• Cause-related marketing

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 6. Cultural Environment

The cultural environment

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

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 6. Cultural Environment

Core beliefs and values are persistent and

are passed on from parents to children and
b. The are reinforced by schools, religious
Macroenvironment institutions, 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.
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 • Discuss how companies can react to the
Learning marketing environment.
Objective 5

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Responding to the Marketing Environment
Views on Responding

Uncontrollable Proactive Reactive

• React and • Take • Watch and

adapt to aggressive react to
forces in the actions to forces in the
environment affect forces environment
in the
environment

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