Principles of Marketing

Analyzing the
Marketing
Environment
1
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 Marketing Environment

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
 Marketing management’s job is to build
relationships with customers by creating
customer value and satisfaction.
However, marketing managers cant do
this alone.
The Company’s
Microenvironment
The Company

 In designing marketing plans, marketing

management takes other company groups
into account, these groups such as:
The Company’s Microenvironment
The Company

 Top management
 Finance
 R&D
 Purchasing
 Operations
 Accounting
The Company’s Microenvironment
Suppliers

 Provide the resources to produce goods

and services
 Suppliers problems can affect marketing.
Marketing managers must watch supply
availability and costs, supply shortages or
delays, labor strikes can cause sales in the
short run and damage customer
satisfaction in the long run
The Company’s
Microenvironment
Suppliers

 Rising supply costs may force price

increases than can harm the company’s
sales volume.
 Treated as partners to provide customer
value
The Company’s Microenvironment
Marketing Intermediaries

Help the company to

promote, sell and
distribute its
products to final buyers
The Company’s Microenvironment
Types of Marketing Intermediaries

Physical
Resellers distribution
firms

Marketing
Financial
services
intermediaries
agencies
The Company’s
Microenvironment
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
The Company’s
Microenvironment
Physical distribution firms

 Help the company to stock and move goods from their

point of origin to their destinations
The Company’s
Microenvironment
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
The Company’s
Microenvironment
Financial intermediaries

 Such as 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.
The Company’s
Microenvironment
Competitors

 The marketing concept states that to be successful, a company must

provide greater customer value and satisfaction than its competitors
do.
 Firms must gain strategic advantage by positioning their offerings
against competitors’ offerings
The Company’s Microenvironment
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
The Company’s
Microenvironment
Publics

 Financial publics: this group influences the company’s

ability to obtain funds, banks, investment houses, and
stockholders
 Media publics: this group carries news, features. It
includes newspapers, magazines, radio and television
stations
The Company’s
Microenvironment
Publics

 Government publics: management must take

government developments into account, marketers must
consult the company’s lawyers on issues of product
safety, truth in advertising
 Citizen action publics: a company’s marketing decisions
maybe questioned by consumer organizations ,
environmental groups and others
The Company’s
Microenvironment
Publics

 Local publics: this group includes neighborhood

residents and community organizations. Large
companies appoint a community relations officer to
deal with the community, attend meetings, answer
questions and contribute to the worthwhile causes
The Company’s
Microenvironment
Publics

 General public: a company needs to be concerned about

the general public’s attitude towards its products and
activities
 Internal publics: this group includes workers, managers,
volunteers and the board of directors.
The Company’s
Microenvironment
customers

 Customers are the most important actors in the

company’s microenvironment. The aim of the entire
system is to serve target customers and create strong
relationships with them
 There are five types of customer markets
The Company’s
Microenvironment
Customers

 Consumer markets: consist of individuals and

households that buy goods and services for personal
consumption
 Business markets: buy goods and services for further
processing or for use in the production process
 Reseller markets: buy goods and services to resell at a
profit
The Company’s
Microenvironment
Customers

 Government markets: are made up of government

agencies that buy goods and services to produce public
services or transfer good and services to others who
need them
 International markets: consist of these buyers in other
countries, including consumers, producers, sellers and
governments
The Company’s Macroenvironment
The Company’s
Macroenvironment
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
The Company’s Macroenvironment
Demographic Environment

 Changing age structure of the population

_ The post world war II baby boom produced 78 million
 Baby boomers include people born between 1946 and 1964
 Most affluent Americans
 The baby boomers have been one of the
Most powerful forces shaping the marketing
Environment
The Company’s Macroenvironment
Demographic Environment

 Generation X includes people born between 1965 and

1976
 High parental divorce rates
 Cautious economic outlook as they grown up during time of
recession & corporate downsizing
The Company’s
Macroenvironment
Demographic Environment

 Less materialistic “ they prize experience not acquisition “

 Family comes first, career second
 Lag behind on retirement savings
The Company’s Macroenvironment
Demographic Environment

 Millennials (gen Y or echo boomers) include those born

between 1977 and 2000
 Comfortable with technology
 Includes
 Tweens (ages 8–12)
 Teens (13–19)
 Young adults (20’s)
The Company’s Macroenvironment
Demographic Environment

Generational marketing is important

in segmenting people by lifestyle of
life state instead of age.
some experts warn marketers to be
careful about turning off one
generation each time they craft a
product or message that appeals
effectively to another
The Company’s
Macroenvironment
Demographic Environment

 Changes in the Workforce

More educated, the increased

number of educated people will
increase the demand for quality
products, books , magazines,
and personal computers
More white collar
The Company’s Macroenvironment
Economic Environment

Economic environment consists of factors that affect

consumer purchasing power and spending patterns
 Nations vary greatly in their levels and distribution of
income, some countries have the industrial economies
which constitute rich markets for many different kinds
of goods
The Company’s
Macroenvironment
Economic Environment

 Subsistence economies consume most of their own

agriculture and industrial output and offer few market
opportunities
 In between are developing economies which can offer
outstanding marketing opportunities for the right kinds
of products
 The Company’s Macroenvironment
Economic Environment

 Changes in income
 Valuemarketing involves
ways to offer financially
cautious buyers greater
value—the right
combination of quality
and service at a fair price
 The Company’s
Macroenvironment
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
The Company’s
Macroenvironment
Natural Environment

 Environmental sustainability:
Developing strategies and practices that create a world
economy that the planet can support indefinitely, they
are responding to consumer demands with more
environmentally responsible products.
The Company’s
Macroenvironment
Technological Environment

 Forces that create new technologies, creating new

products and market opportunities
The Company’s
Macroenvironment
Political Environment

Political environment consists of laws, government agencies, and

pressure groups that influence or limit various organizations and
individuals in a given society
The Company’s
Macroenvironment
Political Environment

 Legislation regulating business

 Increased legislation

Business legislation has been enacted

for two reasons:
1. To protect companies from each
other
2. To protect consumers from unfair
business practices such as telling
lies in the advertisement
The Company’s
Macroenvironment
Political Environment

_ Changing government agency enforcement

* International marketers will encounter
dozens, or even hundreds of agencies set up
to enforce trade policies and regulations.
* Marketers need to know about major laws
protecting competition, consumers and
society. They need to understand these
laws at local, national and international
levels
The Company’s
Macroenvironment
Political Environment

 Increased emphasis on ethics

 Socially responsible behavior”
companies encourage their managers
to look beyond the regulatory system
allows and simply “ do the right
things “ these socially responsible
firms seek out ways to protect the
long run interests of their consumers
and the environment”
The Company’s Macroenvironment
Cultural Environment

Cultural environment consists of institutions and other forces that affect

a society’s basic values, perceptions, and behaviors
The Company’s
Macroenvironment
Cultural Environment
Persistence of Cultural Values

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, organization, society,
nature, and the universe
The Company’s Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values

 People’s view of others

 More “cocooning” : in which people are going
out less with others and are staying home
more to enjoy the creature comforts of home
and hearth – from the networked home office
to home entertainment centers.
The Company’s
Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values

 People’s view of organizations

“people vary in their attitudes towards corporations, government
agencies , universities and trade unions”
 People’s view of society
 Patriots defend it
 Reformers want to change it
 Malcontents want to leave it