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3
The Marketing Environment
ROAD MAP: Previewing the Concepts
• Describe the environmental forces that affect the
•
•
•
•
company’s ability to serve its customers.
Explain how changes in the demographic and
economic environments affect marketing
decisions.
Identify the major trends in the firm’s natural and
technological environments.
Explain the key changes in the political and
cultural environments.
Discuss how companies can react to the marketing
environment.
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Marketing Environment
• The marketing environment consists of actors
and forces outside the organization that affect
management’s ability to build and maintain
relationships with target customers.
• Environment offers both opportunities and
threats.
• Marketing intelligence and research used to
collect information about the environment.
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Marketing Environment
• Includes:
– Microenvironment: actors close to the
company that affect its ability to serve its
customers.
– Macroenvironment: larger societal forces that
affect the microenvironment.
• Considered to be beyond the control of the
organization.
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The Company’s Microenvironment
• Company’s Internal Environment:
– Areas inside a company.
– Affects the marketing department’s
planning strategies.
– All departments must “think consumer” and
work together to provide superior customer
value and satisfaction.
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Actors in the Microenvironment
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The Company’s Microenvironment
• Suppliers:
– Provide resources
needed to produce
goods and services.
– Important link in the
“value delivery
system.”
– Most marketers treat
suppliers like partners.
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The Company’s Microenvironment
• Marketing Intermediaries:
– Help the company to promote, sell, and distribute
its goods to final buyers
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries
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Partnering With Intermediaries
Coca-Cola provides
Wendy’s with much
more than just soft
drinks. It also pledges
powerful marketing
support.
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The Company’s Microenvironment
• Customers:
– Five types of
markets that
purchase a
company’s goods
and services
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The Company’s Microenvironment
• Competitors:
– Those who serve a target market with products
and services that are viewed by consumers as
being reasonable substitutes
– Company must gain strategic advantage against
these organizations
• Publics:
– Group that has an interest in or impact on an
organization's ability to achieve its objectives
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Types of Publics
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The Macroenvironment
• The company and all of the other actors
operate in a larger macroenvironment of
forces that shape opportunities and pose
threats to the company.
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The Company’s Macroenvironment
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The Company’s Macroenvironment
• Demographic:
– The study of human populations in terms of
size, density, location, age, gender, race,
occupation, and other statistics.
– Marketers track changing age and family
structures, geographic population shifts,
educational characteristics, and population
diversity.
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The Seven U.S. Generations
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Baby Boomers
• 78 million born between 1946 and 1964
• Account for 28% of population
• Earn more than half of all personal income
• Almost 25% belong to racial or ethnic minority
• Spend a lot on anti-aging products and
services
• Are likely to postpone retirement
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Generation X
• 45 million born between 1965 and 1976
• Defined by their shared experiences
– Increasing divorce rates
– More of their mothers employed
– First generation of latchkey kids
• Cynical of frivolous marketing pitches
• Care about the environment
• Prize experience, not acquisition
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Generation Y
• 72 million born between 1977 and 1994
• Have large amount of disposable income
• Comfortable with computer technology
• Tend to be impatient and “Now-Oriented”
• Many product lines targeted at Gen Ys
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Changing American Family
• Household makeup:
– Married couples with children = 34%, and falling
– Married couples and people living with other
relatives = 22%
– Single parents = 12%
– Single persons and adult “live-togethers” = 32%
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The Changing American Family
Non-family households—
single live-alones or adult
live-togethers of one or both
sexes—make up a full 32
percent of U.S. households.
Today’s marketers must
incorporate “the likes of
Murphy Brown, Ally McBeal,
and Will and Grace into their
business plans.”
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Geographic Shifts in Population
• 16% of U.S. residents move each year
• General shift toward the Sunbelt states
• City to suburb migration continues
• More people moving to “micropolitan” areas
• More people telecommute
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Better Educated Population
• 1980:
– 69% of people over age 25 completed high
school
– 17% had completed college
• 2002:
– 84% of people over age 25 completed high
school
– 27% had completed college
• Currently, ⅔ of high school grads start
college
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More White-Collar Population
• 1950 – 1985:
– Proportion of white-collar workers increased
from 41% to 54%
– Proportion of blue-collar workers decreased
from 47% to 33%
– Proportion of service workers increased from
12% to 14%
• 1983 – 1999:
– Proportion of managers and professionals
increased from 23% to >30%
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Increasing Diversity
• U.S. is a “salad bowl”
– Various groups mixed together, each retaining
its ethnic and cultural differences
• Increased marketing to:
– Gay and lesbian consumers
– People with disabilities
• www.peapod.com
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Diversity-Based Advertising
Based on careful study of cultural differences, Bank of America has
developed targeted advertising messages for different cultural
subgroups, here Asians and Hispanics.
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Economic Environment
Consists of factors that affect consumer
purchasing power and spending patterns.
• Changes in Income
– 1980’s – consumption
frenzy
– 1990’s – “squeezed
consumer”
– 2000’s – value marketing
• Income Distribution
–
–
–
–
Upper class
Middle class
Working class
Underclass
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Income Distribution
Walt Disney markets two distinct Pooh bears to match its twotiered market.
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Natural Environment
• Involves the natural
resources that are
needed as inputs by
marketers or that are
affected by marketing
activities.
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Factors Impacting the Natural
Environment
Shortages of Raw Materials
Increased Pollution
Increased Government Intervention
Environmentally Sustainable Strategies
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Environmental Responsibility
McDonald’s has made a substantial commitment to the so-called
“green movement.”
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Technological Environment
• Most
dramatic
force now
shaping our
destiny.
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Technological Environment
• Changes rapidly.
• Creates new markets
•
•
and opportunities.
Challenge is to make
practical, affordable
products.
Safety regulations result
in higher research costs
and longer time between
conceptualization and
introduction of product.
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Discussion Questions
• Within the last ten years, which
technological force has had the greatest
impact on marketing? In what areas of
marketing has this impact been seen?
• What technological force has impacted
you the most? In what ways has this
occurred?
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Political Environment
Includes Laws,
Government
Agencies, and
Pressure Groups
that Influence or
Limit Various
Organizations and
Individuals In a
Given Society.
Increasing Legislation
Changing Government
Agency Enforcement
Increased Emphasis on Ethics
& Socially Responsible Actions
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Cause-Related Marketing
KitchenAid donates
$50 to breast cancer
research for every
pink mixer it sells
and encourages
consumers to host a
“Cook for the Cure”
dinner party.
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Cultural Environment
• The institutions
and other forces
that affect a
society’s basic
values,
perceptions,
preference, and
behaviors.
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Cultural Environment
• Core beliefs and values are passed on
from parents to children and are
reinforced by schools, churches, business,
and government.
• Secondary beliefs and values are more
open to change.
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Cultural Environment
• Yankelovich Monitor has identified eight
major consumer value themes:
1.
2.
3.
4.
5.
6.
7.
8.
Paradox
Trust not
Go it alone
Smarts really count
No sacrifices
Stress hard to beat
Reciprocity is the way to go
Me 2
• www.yankelovich.com
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Cultural Environment
Themselves
Society’s Major
Cultural Views Are
Expressed in
People’s Views of:
Others
Organizations
Society
Nature
The Universe
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Responding to the Marketing Environment
• Environmental Management Perspective
• Taking a proactive approach to managing the
environment by taking aggressive (rather than
reactive) actions to affect the publics and forces
in the marketing environment.
• This can be done by:
– Hiring lobbyists
– Running “advertorials”
– Pressing lawsuits
– Filing complaints
– Forming agreements to control channels
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Rest Stop: Reviewing the Concepts
• Describe the environmental forces that affect the
•
•
•
•
company’s ability to serve its customers.
Explain how changes in the demographic and
economic environments affect marketing
decisions.
Identify the major trends in the firm’s natural and
technological environments.
Explain the key changes in the political and
cultural environments.
Discuss how companies can react to the
marketing environment.
3-42
Q: Your company receives a general letter
from the NAACP that expresses the
organization's concern over the failure of
consumer-products firms to market actively
to African Americans. To which of the
following publics should your company
respond?
1. Local
2. Financial
3. Citizen action
4. Government
AK, 7e – Chapter 3
3-43
Q: You and your marketing team must
develop a plan to sell new furnace
equipment to steel manufacturers. This
plan targets which of the following
customer markets?
1. Business market
2. Consumer market
3. International market
4. Government market
AK, 7e – Chapter 3
3-44
Q: To market this furnace equipment
more effectively, your team might
seek the assistance of all of the
following marketing intermediaries
EXCEPT:
1. resellers
2. financial institutions
3. suppliers
4. physical distribution firms
AK, 7e – Chapter 3
3-45
Q: Consumers who value experience over
the accumulation of wealth, who seek out
the best value, and who typically skeptical
of marketing messages make up which of
the following consumer groups?
1. Generation Y
2. Generation X
3. Baby Boomers
4. all of the above
AK, 7e – Chapter 3
3-46
Q: Based on recent geographic shifts in
population, you would most likely open
your new branch of a sporting goods
company in which of the following areas?
1. The South
2. The Northeast
3. The Midwest
4. Canada
AK, 7e – Chapter 3
3-47
Q: From a demographic point of view,
your new Internet-service company
stands a good chance of succeeding
because:
1. the U.S. population is becoming
more ethnically diverse.
2. the U.S. population is growing older.
3. the U.S. population is more inclined
toward citizen action.
4. the U.S. population is becoming
better educated.
AK, 7e – Chapter 3
3-48
Q: As new evidence of tobacco's harmful effects
has emerged, state and federal agencies, courts,
and legislatures are trying to impose ever more
stringent regulations on tobacco advertising.
Should governments tightly regulate the
advertising of industries that deal in potentially
harmful consumer products such as cigarettes?
1. Yes
2. No
AK, 7e – Chapter 3
3-49