Principles of Marketing Chapter #3

1. Chapter 3- slide 1
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Chapter Three
Analyzing the Marketing
Environment

2. Chapter 3- slide 2
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Analyzing the Marketing
Environment
• The Company’s Microenvironment
• The Company’s Macroenvironemnt
• Responding to the Marketing
Environment
Topic Outline

3. Chapter 3- slide 3
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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 target customers

4. Chapter 3- slide 4
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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

5. Chapter 3- slide 5
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The Company’s
Microenvironment
• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting
The Company

6. Chapter 3- slide 6
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The Company’s
Microenvironment
• Provide the resources to produce goods
and services
• Treated as partners to provide customer
value
Suppliers

7. Chapter 3- slide 7
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The Company’s
Microenvironment
• Help the company to promote, sell
and distribute its products to final
buyers
Marketing Intermediaries

8. Chapter 3- slide 8
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The Company’s
Microenvironment
Resellers
Physical
distribution
firms
Marketing
services
agencies
Financial
intermediaries
Types of Marketing Intermediaries

9. Chapter 3- slide 9
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The Company’s
Microenvironment
• Firms must gain strategic advantage by
positioning their offerings against
competitors’ offerings
Competitors

10. Chapter 3- slide 10
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The Company’s
Microenvironment
• 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

11. Chapter 3- slide 11
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The Company’s
Macroenvironment
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
Demographic Environment

12. Chapter 3- slide 12
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The Company’s
Macroenvironment
• Changing age structure of the
population
– Baby boomers include people born
between 1946 and 1964
– Most affluent Americans
Demographic Environment

13. Chapter 3- slide 13
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The Company’s
Macroenvironment
• Generation X includes people born
between 1965 and 1976
– High parental divorce rates
– Cautious economic outlook
– Less materialistic
– Family comes first
– Lag behind on retirement savings
Demographic Environment

14. Chapter 3- slide 14
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The Company’s
Macroenvironment
• Millennials (gen Y or echo boomers) include
those born between 1977 and 2000
• The 83 million children of the baby boomers born between
1977 and 2000.
– Comfortable with technology
Demographic Environment

15. Chapter 3- slide 15
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• Compared with other generational
groups, millennials tend to be frugal,
practical, connected, mobile, and
impatient. More than sales pitches from
marketers, millennials seek authenticity
and opportunities to shape their own
brand experiences and share them with
others.
Con,,,

16. Chapter 3- slide 16
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The Company’s
Macroenvironment
• Generation Z
People born after 2000 (although many
analysts include people born after 1995) who
make up the kids, tweens, and teens
markets.
– Comfortable with technology
– Includes:
• Tweens (ages 8–12)
• Teens (13–19)
• Young adults (20’s)
Demographic Environment

17. Chapter 3- slide 17
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The Company’s
Macroenvironment
Generational marketing is important in
segmenting people by lifestyle of life state
instead of age
Do brands need to create separate products
and marketing programs for each
generation?
Demographic Environment

18. Chapter 3- slide 18
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The Company’s
Macroenvironment
More people are:
• Divorcing or separating
• Choosing not to marry
• Choosing to marrying later
• Marrying without intending to have children
• Increased number of working women
Demographic Environment

19. Chapter 3- slide 19
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The Company’s
Macroenvironment
• Growth in United States West and
South and decline in Midwest and
Northeast
• Moving from rural to metropolitan areas
• Changes in where people work
– Telecommuting
– Home office
Demographic Environment

20. Chapter 3- slide 20
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The Company’s
Macroenvironment
• Changes in the workforce
– More educated
– More white collar
Demographic Environment

21. Chapter 3- slide 21
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The Company’s
Macroenvironment
Markets are becoming more diverse
– International
– National
• Includes:
– Ethnicity
– Gay and lesbian
– Disabled
Demographic Environment
Increased Diversity

22. Chapter 3- slide 22
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The Company’s
Macroenvironment
Economic environment consists of
factors that affect consumer purchasing
power and spending patterns
• Subsistence economies consume most
of their own agriculture and industrial
output
Economic Environment

23. Chapter 3- slide 23
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The Company’s
Macroenvironment
• Ernst Engel—Engel’s Law
• As income rises:
– The percentage spent on food declines
– The percentage spent on housing remains
constant
– The percentage spent on savings
increases
Economic Environment
Changes in Consumer Spending Patterns

24. Chapter 3- slide 24
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The Company’s
Macroenvironment
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
– Environmentally sustainable strategies
Natural Environment

25. Chapter 3- slide 25
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• Marketers should be aware of several trends in the natural
environment. The first involves growing shortages of raw
materials. Air and water may seem to be infinite resources,
but some groups see long-run dangers. Air pollution chokes
many of the world’s large cities, and water shortages are
already a big problem in some parts of the United States and
the world.
• By 2030, more than one in three people in the world will not
have enough water to drink.37 Renewable resources, such
as forests and food, also have to be used wisely.
• Nonrenewable resources, such as oil, coal, and various
minerals, pose a serious problem. Firms making products
that require these scarce resources face large cost
increases even if
• the materials remain available.
• A second environmental trend is increased pollution.

26. Chapter 3- slide 26
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27. Chapter 3- slide 27
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The Company’s
Macroenvironment
• Most dramatic force in changing the
marketplace
• Creates new products and opportunities
• Safety of new product always a concern
Technological Environment

28. Chapter 3- slide 28
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The Company’s
Macroenvironment
Political environment consists of laws,
government agencies, and pressure
groups that influence or limit various
organizations and individuals in a given
society
Political Environment

29. Chapter 3- slide 29
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The Company’s
Macroenvironment
• Legislation regulating business
– Increased legislation
– Changing government agency enforcement
• FBR and NAB
• Increased emphasis on ethics
– Socially responsible behavior
– Cause-related marketing
Political Environment

30. Chapter 3- slide 30
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The Company’s
Macroenvironment
Cultural environment consists of
institutions and other forces that affect a
society’s basic values, perceptions, and
behaviors
Cultural Environment

31. Chapter 3- slide 31
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The Company’s
Macroenvironment
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
Cultural Environment
Persistence of Cultural Values

32. Chapter 3- slide 32
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The Company’s
Macroenvironment
• People’s view of themselves
– Some people seek personal pleasure, wanting fun, change,
and escape.
– Others seek self-realization through religion, recreation
• People’s view of others
– mass mingling
• People’s view of organizations
• People’s view of society
Cultural Environment
Shifts in Secondary Cultural Values

33. Chapter 3- slide 33
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The Company’s
Macroenvironment
• People’s view of nature
– Some feel ruled by it
• People’s view of the universe
– Renewed interest in spirituality
Cultural Environment
Shifts in Secondary Cultural Values

34. Chapter 3- slide 34
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35. Chapter 3- slide 35
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• The natural environment shows three major
trends: shortages of certain raw materials,
higher pollution levels, and more government
intervention in natural resource management.
• Environmental concerns create marketing
opportunities to alert companies.
• The technological environment creates both
opportunities and challenges. Companies that
fail to keep up with technological change will
miss out on new product and marketing
opportunities
Identify the major trends in the firm’s
natural and technological environments.

36. Chapter 3- slide 36
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Discuss how companies can react
to the marketing environment.
• Companies can passively accept the
marketing environment as an
uncontrollable element to which they must
adapt, avoiding threats and taking
advantage of opportunities as they arise.
• Or they can take a proactive stance,
working to change the environment rather
than simply reacting to it.
• Whenever possible, companies should try
to be proactive rather than reactive.

37. Chapter 3- slide 37
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Copyright © 2010 Pearson Education, Inc.
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