The Marketing Environment

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The Marketing Environment
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ROAD MAP Previewing the Concepts

• 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.

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A Simple Model of the Marketing Process
Create value for customers and build customer
relationships
Capture value from customers in return
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Marketing Environment

• The marketing environment consists of actors and
  forces outside the organization that affect
  managements ability to build and maintain
  relationships with target customers.
• Environment offers both opportunities and
  threats.
• Marketing intelligence and research serve 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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Actors in the Microenvironment
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The Companys Microenvironment

• Companys Internal Environment
• Areas inside a company.
• Affects the marketing departments planning
  strategies.
• All departments must think consumer and work
  together to provide superior customer value and
  satisfaction.

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The Companys 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 Companys 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 Wendys with much more than
just soft drinks. It also pledges powerful
marketing support.
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The Companys Microenvironment

• Customers
• Several types of markets that purchase a
  companys goods and services
• Customer vs consumer

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The Companys 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.
• PESTE analysis (PEST? STEEP? STEP?...)

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The Companys Macroenvironment
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The Companys Macroenvironment

• Demographic
• The study of human populations in terms of size,
  density, location, age, gender, race, occupation,
  and other statistics.
• Marketers track changing age (aging population,
  family life cycle) and family structures
  (singles...), educational characteristics
  (better educated people, more white-collar
  people), and population diversity (gay and
  lesbian consumers, people with disabilities).

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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 and income distribution (vs.
  social class)
• Upper class
• Middle class
• Working class
• Underclass

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Income Distribution
Walt Disney markets two distinct Pooh bears to
match its two-tiered 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
McDonalds has made a substantial commitment to
the so-called green movement.
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Technological Environment

• Most dramatic force now shaping our destiny.
• 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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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
Cause-Related Marketing
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Cultural Environment

• The institutions and other forces that affect a
  societys basic values, perceptions, preference,
  and behaviors.
• 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

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From Changing Environment to SWOT analysis
How we can transforom results from analysis of
external and internal environment to SWOT
analysis?
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3

• Managing Marketing Information

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ROAD MAP Previewing the Concepts

• Explain the importance of information to the
  company and its understanding of the marketplace.
• Define the marketing information system and
  discuss its parts.
• Outline the steps in the marketing research
  process.
• Explain how companies analyze and distribute
  marketing information.
• Discuss the special issues some marketing
  researchers face, including public policy and
  ethics issues.

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The Importance of Information

• Companies need information about their
• Customer needs
• Marketing environment
• Competition
• Marketing managers do not need more information,
  they need better information.

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Information Overload
In this oh so overwhelming information age, its
all too easy to be buried, burdened, and burned
out by data overload.
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The Marketing Information System
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Marketing Information System

• MIS consists of people, equipment, and procedures
  to gather, sort, analyze, evaluate, and
  distribute needed, timely, and accurate
  information to marketing decision makers.
• The MIS helps managers to
• Assess Information Needs
• Develop Needed Information
• Distribute and Utilize Information

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Assessing Information Needs

• A good MIS balances the information users would
  like against what they really need and what is
  feasible to offer.
• Sometimes the company cannot provide the needed
  information because it is not available or due to
  MIS limitations.
• Have to decide whether the benefits of more
  information are worth the costs.

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Developing Marketing Information

• Internal Databases Electronic collections of
  information obtained from data sources within the
  company.
• Marketing Intelligence Systematic collection and
  analysis of publicly available information about
  competitors and developments in the marketing
  environment.
• Marketing Research Systematic design,
  collection, analysis, and reporting of data
  relevant to a specific marketing situation facing
  an organization.

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The Marketing Research Process
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Defining the Problem Objectives

• Gather preliminary information
• that will help define the problem
• and suggest hypotheses.

• Exploratory
• Research

• Describes things (e.g., market
• potential for a product,
• Demographics, and attitudes).

• Descriptive
• Research

• Tests hypotheses about
• cause-and-effect
• relationships.

• Causal
• Research

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Developing the Research Plan

• Includes
• Determining the exact information needed
• Developing a plan for gathering it efficiently
• Presenting the written plan to management
• Outlines
• Sources of existing data
• Specific research approaches
• Contact methods
• Sampling plans
• Instruments for data collection

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Gathering Secondary Data

• Information that already exists somewhere
• Internal databases
• Commercial data services
• Government sources
• Available more quickly and at a lower cost than
  primary data
• Must be relevant, accurate, current, and impartial

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Online Databases
Dialog puts an incredible wealth of information
at the keyboards of marketing decision makers.
Dialog puts information to change the world, or
your corner of it at your fingertips.
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Primary Data Collection

• Consists of information collected for the
  specific purpose at hand.
• Must be relevant, accurate, current, and
  unbiased.
• Must determine
• Research approach
• Contact methods
• Sampling plan
• Research instruments

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Observational Research

• The gathering of primary data by observing
  relevant people, actions, and situations.
• Ethnographic research
• Observation in natural environment
• Mechanical observation
• People meters
• Checkout scanners

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Observational Research
Fisher-Price set up an observation lab in which
it could observe the reactions of little tots to
new toys.
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Survey Research

• Most widely used method for primary data
  collection.
• Approach best suited for gathering descriptive
  information.
• Can gather information about peoples knowledge,
  attitudes, preferences, or buying behavior.

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Experimental Research

• Tries to explain cause-and-effect relationships.
• Involves
• selecting matched groups of subjects,
• giving different treatments,
• controlling unrelated factors, and
• checking differences in group responses.

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Strengths Weaknesses ofContact Methods
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Choosing the Sample

• Requires 3 Decisions
• Who is to be surveyed?
• Sampling unit
• How many people should be surveyed?
• Sample size
• How should the people in the sample be chosen?
• Sampling procedure

• Sample segment of the population selected to
  represent the population as a whole.

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Primary Data Collection
Research Instruments

• Mechanical Devices
• People Meters
• Supermarket Scanners
• Galvanometer
• Eye Cameras

• Questionnaires
• What questions to ask
• Form of each question
• Closed-ended
• Open-ended
• Wording
• Ordering

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Implementing the Research Plan
Most Expensive Subject to Error
Collecting the Data
Research Plan
Processing the Data
Analyzing the Data
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Interpreting Reporting Findings
Step 1. Interpret the Findings
Managers and researchers must work together when
interpreting research results.
Step 2. Draw Conclusions
Step 3. Report to Management
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Customer Relationship Management

• Many companies utilize CRM
• Capture customer information from all sources
• Analyze it in depth
• Apply the results to build stronger
  relationships.
• Companies look for customer touch points.
• CRM analysts develop data warehouses and use data
  mining techniques to find information out about
  customers.

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Distributing and Using Marketing Information
Nonroutine Information for Special Situations
Routine Information for Decision Making

• Information Must be Distributed
• to the Right People at the Right Time

Intranets
Extranets
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Rest Stop Reviewing the Concepts

• Explain the importance of information to the
  company.
• Define the marketing information system and
  discuss its parts.
• Outline the steps in the marketing research
  process.
• Explain how companies analyze and distribute
  marketing information.
• Discuss the special issues some marketing
  researchers face, including public policy and
  ethics issues.