Title: Lecture 3A
1Lecture 3A
- The Marketing Environment
2Marketing Environment
- Marketing Environment- consists of the actors and
forces outside marketing that affect marketing
managements ability to develop and maintain
successful relationships with its target
customers. - Includes
- Microenvironment - forces close to the company
that affect its ability to serve its customers. - Macroenvironment - larger societal forces that
affect the microenvironment.
3The Companys Microenvironment
- Companys Internal Environment- functional areas
inside a company that have an impact on the
marketing departments plans. - Suppliers - provide the resources needed to
produce goods and services and are an important
link in the value delivery system. - Marketing Intermediaries - help the company to
promote, sell, and distribute its goods to final
buyers. i.e. resellers.
4The Companys Microenvironment
- 4. Customers - five types of markets that
purchase a companys goods and services. - 5. Competitors - those who serve a target market
with similar products and services against whom a
company must gain strategic advantage. - 6. Publics - any group that perceives itself
having an interest in a companys ability to
achieve its objectives.
5Six Major Forces of the Company (Fig. 4.1)
Marketing Intermediaries
Customers
Competitors
Suppliers
Publics
The Company
Marketing
6 Companys Internal Environment
7Types of Customer Markets (Fig. 4.2)
Reseller Markets
Government Markets
Business Markets
Consumer Markets
International Markets
Company
8Types of Publics (Fig. 4.3)
Citizen Action Publics
Local Publics
Government Publics
General Public
Media Publics
Financial Publics
Internal Publics
Company
9Major Forces in the Companys Macroenvironment
(Fig. 4.4)
10The Companys Macroenvironment
- Demographic - studies populations in terms of
size, density, location, age, gender, race,
occupation and other statistics. - Economic - factors that affect consumer
purchasing power and spending patterns. - Natural - natural resources needed as inputs by
marketers or that are affected by marketing
activities.
11Key U.S.Demographic Trends
Changing Age Structure Population is aging many
divisions
Changing American Family Later marriage, fewer
children, working women, and nontraditional
households
Geographic Shifts Moving to the Sunbelt, suburbs,
micropolitan areas
Better-Educated More White-Collar Increased
college attendance and white-collar workers
Increasing Diversity 72 Caucasian, 13
African-American, 11 Hispanic 3 Asian
12Age Distribution of the U.S. Population
Baby Boomer Generation
(78 million people born 1946-1964)
One of the most powerful forces
shaping the marketing environment, 30 of
population
Generation X
(45 million people born 1965-1976) More
skeptical, cynical of frivolous marketing pitches
promising easy success
Echo Boomer Generation
(72 million people born 1977-1994)
Fluent and comfortable with computer, digital,
and Internet technology (Net-Gens)
13Economic Environment
14Brief Introduction of Gini Index
15Brief Introduction of Gini Index
- In this analysis, we assume that the society is
divided into two layers and the group of A of
total people earns 100-A for easy
understanding. - For instance, the Gini Index of 0.7 means the
rich layer of 15 earns 85 of total income and
the gap of two layers becomes about 32times
?(85/15)/(15/85) 32.1? - As for the Gini Index of 0.7068 as the income of
the world, the rich layer of 14.7 earns 85.3 of
total income and the gap of two layers becomes
33.9 times even if the income inequality within
each country is neglected.
16- The Gini Index is 0.3 in "the society where one
king owns 30 percent of the whole income and the
other people have others" and also in "the
society where the citizen layer of 70 gets all
income and the slave layer of 30 gets nothing".
There is no clear definition of the difference in
this case.
17Spending Patten (Engles Law)
- Differences noted over a century ago by Ernst
Engle in how people shit their spending across
food, housing, transportation, health care, and
other goods and serves categories as family
income rises. - Family income increases, on food declined, but
housing keeps constant. (see Table 4.1 on page
122 of textbook)
18Natural Environment
Shortages of Raw Materials
Factors Affecting the Natural Environment
Environmentally Sustainable Strategies
Increased Pollution
Governmental Intervention
19The CompanysMacroenvironment
- Technological - forces that create new
technologies, creating new product and market
opportunities. - Political - laws, agencies and pressure groups
that influence and limit organizations and
individuals in a given society. - Cultural - institutions and other forces that
affect a societys basic values, perceptions,
preferences, and behaviors.
20Technological Environment
- Faster pace of technological change products are
outdated at a rapid pace. - Almost unlimited opportunities being developed
daily in health care, space industry, robotics,
and bio-genetic field. - Challenge is not only technical, but also
commercial make practical, affordable versions
of products. - Increased regulation concerning product safety,
individual privacy, and other areas that affect
technological changes.
21Political Environment
Includes Laws, Government Agencies, Etc. that
Influence Limit Organizations/ Individuals in
a Given Society
Increasing Legislation
Changing Government Agency Enforcement
Increased Emphasis on Ethics Socially Responsibl
e Actions
22Cultural Environment
- Core Beliefs
- High degree of persistence,
- American Core beliefs working, getting
married, giving charity and being honest - Secondary Beliefs
- More open to change
23Secondary Beliefs and Value
Peoples View of Themselves
Peoples View of Others
Peoples View of the Universe
Cultural Values of a Society
Peoples View of Organizations
Peoples View of Nature
Peoples View of Society
24Responding to the Marketing Environment
- Environmental Management Perspective
- Taking a proactive approach to managing the
microenvironment and the macroenvironment by
taking aggressive (rather than passive) actions
to affect the publics and forces in the marketing
environment. - How? Hire lobbyists , run advertorials, press
law suits, file complaints, and form agreements.
25Review of Concept Connections
- Describe the environmental forces that affect the
companys ability to serve its customers. - Explain how changes in the demographic and
economic environments affect marketing decisions. - Identify the major trends in the firms natural
and technological environments. - Explain the key changes in the political and
cultural environments. - Discuss how companies can react to the marketing
environment.
26Group Discussion
- The following questions will be discussing in
groups and you should discuss and find the answer
in your group and send a representative to
present your ideas.
27Issue For Discussion (1)
- In the 1930s, President Franklin Roosevelt used
his cigarette holder as a personal - trademark. Discuss how the cultural
environment has changed? Would a president be
seen smoking today? Considering the rash of
recent court rulings and settlements concerning
the tobacco industry, how might a cigarette
manufacturer market its products differently in
this new environment? What are the long-term
prospects for the tobacco industry?
28Issue For Discussion (2)
- Americans are becoming more concerned about the
natural environment. Explain how this trend - would affect a company that markets
- (a) sandwich bags,
- (b) tires,
- (c) computers,
- (d) electrical power. Suggest some effective
responses to these concerns.
29Issue For Discussion (2)
- What do you think is Chinese core beliefs?