HCM 340

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CHAPTER 3

• HCM 340

Slides Adapted from Prentice-Hall 2007
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The Companys Microenvironment

• All of the players affecting the company from a
  micro point of view.
• Relationships with all these actors must be
  developed so that marketing management can
  successfully create customer value and
  satisfaction

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Figure 3-1Actors in the Microenvironment
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The Company

• All the interrelated functional groups within the
  company form the internal environment.
• Marketing management must take these other groups
  into account
• Top management sets the mission, objectives,
  broad strategies, and policies.
• Finance finds the money to carry out the
  marketing plans.
• RD designs safe and attractive products.
• Purchasing gets the supplies and materials
  needed.
• Operations produces and distributes the product.
• Accounting measures revenues and costs, and helps
  marketing understand how well it is achieving
  objectives
• All these departments must work in concert and
  according to the marketing concept to think
  consumer.

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Suppliers

• Suppliers are an important link in the companys
  value delivery system.
• Marketing managers must pay attention to the
  availability of supplies, because shortages,
  delays, and strikes could damage customer
  satisfaction.
• Suppliers today are frequently treated as
  partners in creating and delivering value to
  customers.

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Marketing Intermediaries

• Marketing intermediaries help companies promote,
  sell, and distribute goods to final buyers

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Marketing Intermediaries

• Include resellers, physical distribution firms,
  marketing services agencies, and financial
  intermediaries.
• Resellers are distribution channel firms that
  help the company find customers or make sales to
  them. They include wholesalers and retailers, who
  buy and resell merchandise.
• Physical distribution firms assist the company in
  stocking and moving goods from their points of
  origin to their destinations.
• Marketing services agencies perform some of the
  marketing functions such as market research,
  advertising, and media selection and placement.
• Financial intermediaries include banks, credit
  companies, insurance companies and others that
  help finance transactions or insure against
  risks.
• Marketing intermediaries are also important links
  in the value delivery system.

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Partnering with Intermediaries
Marketing in Action

• Coca-Colas partnership efforts help
  intermediaries to market more effectively.
• Coca-Cola shares research results related to the
  beverage market, such as consumer preference and
  demographic data. Theyve even analyzed creative
  aspects of drive-through menu board design that
  could be improved.

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Customers

• Five types of customer markets
• Consumer markets are made up of individuals and
  households that buy goods and services for
  personal consumption.
• Business markets buy the goods and services for
  further processing or for use in their production
  process.
• Reseller markets buy goods and services to resell
  at a profit.
• Government markets consist of government agencies
  that buy goods and services to produce public
  services, or transfer the goods to others who
  need them.
• International markets are made up of and of the
  above types of customers in other countries

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Competitors

• Marketers must know their competitors strengths
  so that they can develop positioning strategies
  that differentiate their own products against the
  competitors.
• No single competitive strategy will work for all
  companies.

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Marketing in Action
Promoting Strategic Advantages
Comparative advertising is often used to promote
a companys or brands strategic
advantage. Comparative advertising may name or
show a specific competitor, or refer to the
competition indirectly via comparisons to other
brands or the leading brand.
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Publics

• A public is any group that has an actual or
  potential interest in or impact on an
  organization. There are seven types of publics

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Publics (7 Types)

• Financial publics influence the companys ability
  to obtain funds.
• Media publics carry news, features, and editorial
  opinions.
• Government publics may develop and enforce
  regulations on product safety, truth in
  advertising, and other matters.
• Citizen-action publics are consumer
  organizations, environmental groups, minority
  groups, etc. that may question a companys
  decisions.
• Local publics include neighborhood residents and
  community organizations.
• General publics may be concerned about a
  companys products and activities.
• Internal publics include workers, managers, etc.
  who need to feel good about their company.

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The Companys Macroenvironment

• Macroenvironmental forces that affect a company
  in the way of shaping opportunities and posing
  threats

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Figure 3-2Forces in the Macroenvironment
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Demographic Forces

• Demographics
• The study of human populations in terms of size,
  density, location, age, gender, race, occupation,
  and other statistics.
• Free demographic information can be found on the
  Web.

http//www.census.gov
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Demography

• Demography is the study of human populations in
  terms of size, density, location, age, gender,
  race, occupation, and other statistics.

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Demography

• The world population totals 6.4 billion, and will
  pass 8.1 billion people by the year 2030.
• A growing population means growing human needs to
  satisfy. Market opportunities could grow if
  purchasing power is growing as well.
• Marketers track changing age and family
  structures, geographic population shifts,
  educational characteristics, and population
  diversity.
• In the United States, the single most important
  demographic trend is the changing age structure
  of the population.
• The baby boomers were born between 1946 and 1964,
  and account for 28 percent of the population.
  There are 78 million baby boomers, who have
  become one of the most powerful forces shaping
  the U.S. marketing environment.
• Generation X is a birth dearth generation,
  numbering 49 million people born between 1965 and
  1976. They tend to be cautious in their economic
  outlook because they grew up in a time of
  recession and corporate downsizing.
• Generation Ys members were born between 1977 and
  1994, and number about 72 million. This
  generation is still developing their buying
  preferences and behaviors.

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Marketing in Action
Targeting Boomers Needs
As baby boomers age, their desire for vitality
and continued good health will become
increasingly important. Many marketers are
already attempting to satisfy these needs by
developing new goods, drugs, and services.
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Demography

• Marketers must decide whether to develop
  marketing plans and strategies based on
  generational differences.
• The traditional family is being redefined.
• Married couples with children now make up only
  about 34 of U.S. households married couples
  without children make up 28 single parents
  comprise 16 32 are nonfamily households.
• The number of working women has increased greatly
  from 1950 when it was about 30 of the U.S.
  workforce to just over 60 today.

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Marketing in Action
Reaching Out to Generation Y
The ad shown at left plays to the fact that
brands successfully targeting Gen Y are those
that are perceived as hip and popular. It also
recognizes that Gen Ys composition is more
racially diverse, with 1 in 3 members considering
themselves to be non-Caucasian.
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Marketing in Action
Changing American Household
Dream Dinners was created to help working women
who havent time to prepare or cook dinner
themselves, but who want their families to eat
well.
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Diversity Related Marketing
Marketing in Action

• Specialty consultants are often hired to research
  and target diverse markets.

http//www.outnowconsulting.com/index.htm
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Disneys Two-Tiered Market
Marketing in Action

• Distinctly different items are targeted to each
  market.

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Lets Talk!

• How might age-related generational
  characteristics affect Walt Disney World?
• What about changes in the composition of
  households?
• Education and work force status? Explain.

http//disneyworld.disney.go.com/wdw/parks/parkOve
rview?idParkOverviewPage
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Economic Environment

• The economic environment consists of factors that
  affect consumer purchasing power and spending
  patterns.

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Economic Environment

• Nations vary greatly in their levels and
  distribution of income.
• Subsistence economies consume most of their own
  agricultural and industrial output. They
  represent few marketing opportunities.
• Industrial economies are at the other extreme,
  and represent rich markets for many kinds of
  goods.

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Economic Environment

• Income distribution.
• At the top of income distribution in the United
  States are the upper-class consumers, who are
  generally not affected by current economic
  events.
• The middle class is comfortable, but is somewhat
  careful in their spending.
• The members of the working class stick to the
  basics of food, clothing, and shelter.
• The underclass members are those on welfare and
  many retirees who must count pennies to make even
  the most basic purchases
• Changes in major economic variables have a large
  impact on the marketplace.
• With adequate warning, companies can take
  advantage of changes in this environment.

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Natural Environment

• The natural environment involves the natural
  resources that are needed as inputs by marketers,
  or that are affected by marketing activities.

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Technological Environment

• The technological environment is a dramatic force
  in the marketplace today creating new markets and
  opportunities.

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Political Environment

• The political environment consists of laws,
  government agencies, and pressure groups that
  influence or limit various organizations and
  individuals in a given society

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Cultural Environment

• The cultural environment is made up of
  institutions and other forces that affect a
  societys basic values, perceptions, preferences,
  and behaviors.

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Marketing in Action
Diet Canada Dry Cause-Related Marketing
Canada Dry donated .10 to the Juvenile Diabetes
Research Foundation of Canada for every 2 liter
bottle 12 pack sold during the promotional
period. Learn more about the multi-tiered
campaign by visiting the Web site.
http//www.opticom-marketing.com/case-study-canada
-dry.php
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Responding to the MarketingEnvironment

• Many companies think the marketing environment is
  an uncontrollable element to which they have to
  adapt.
• Other companies take an environmental management
  perspective to affect the publics and forces in
  their environment.
• Marketing managers should take a proactive rather
  than reactive approach to the marketing
  environment.

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Lets Talk!
Genetically modified or cloned foods have met
with strong resistance in Europe. How do you
feel abouteating genetically alteredor cloned
foods? How else might genetic engineering
advances create new opportunities?