س Copyright 2000 Prentice Hall 3-1 Chapter 5 Analyzing the Marketing Environment.

س Copyright 2000 Prentice Hall

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Chapter 5Chapter 5

Analyzing the Marketing Environment


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The objectives Of this Chapter is toThe objectives

Of this Chapter is to

• 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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•The substantial speedup of international transportation, communication, and financial transactions, leading to the rapid growth of world trade and investment, especially tripolar trade (North America, Western Europe, Far East)

•The movement of manufacturing capacity and skills to lower cost countries.

•The rising economic power of several Asian countries in world markets.

•The rise of trade blocks such as the European Union and NAFTA signatories.

Identifying and Responding to the Major Macroenvironment ForcesIdentifying and Responding to the Major Macroenvironment Forces


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•The severe debt problems of a number of countries, along with the increasing fragility of the international financial system.

•The increasing use of barter and countertrade to support international transactions.

•The move toward market economies in formerly socialist countries along with rapid privatization of publicly owned companies.

•The rapid dissemination of global lifestyles.•The gradual opening of major new markets, namely China, India,

eastern Europe, the Arab countries, and Latin America.



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•The increasing tendency of multinationals to transcend their locational and national characteristics and become transnational firms.

•The increasing number of cross-border corporate strategic alliances–for example, MCI and British Telecom, and Texas Instruments and Hitachi.

•The increasing ethnic and religious conflicts in certain countries and regions.

•The growth of global brands in autos, food, clothing, electronics.



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Objectives

Objectives

•Tracking Trends & Identifying Opportunities in the Marketing Environments:

–Macroenvironment -- BIG Picture

–Microenvironment -- Closer-In

–Internal environment -- you & me


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THE MARKETING ENVIRONMENT

INTRODUCTIONINTERNAL ENVIRONMENTEXTERNAL ENVIRONMENTSWOT ANALYSIS


INTRODUCTIONINTERNAL ENVIRONMENTEXTERNAL ENVIRONMENTSWOT ANALYSIS


• INTRODUCTION• INTERNAL ENVIRONMENT• EXTERNAL ENVIRONMENT• SWOT ANALYSIS


• INTRODUCTION• INTERNAL ENVIRONMENT• EXTERNAL ENVIRONMENT• SWOT ANALYSIS


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Marketing EnvironmentMarketing Environment

• Marketing:Marketing:• We have discussed before the meaning of We have discussed before the meaning of

Marketing and we said that marketing is Marketing and we said that marketing is .

• Environment:Environment:

• What do we mean by the environment?What do we mean by the environment?


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Marketing EnvironmentMarketing Environment

• Marketing EnvironmentMarketing Environment- consists of the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers.

• Includes:–MicroenvironmentMicroenvironment - forces close to the company

that affect its ability to serve its customers.

–MacroenvironmentMacroenvironment - larger societal forces that affect the whole microenvironment.


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… you’ve got to peel away a few layers to get to the good stuff!

But, the Business World is like an Orange...


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Peeling the “Orange”

TargetConsumers

Product

Place Price

Promotion

Purchasing

R&D

Production

Marketing

Competitors

IntermediariesP

ub

lics

Su

pp

li er s

DemographicEconomic

TechnologicalNatural

PoliticalLegal

SocialCultural

Engineering

Logistics

Finance

Acc

ount

ing

© Bruce C. Bailey 1998


3-133-13The Marketing EnvironmentThe Marketing Environment

CompanyCompany

Demographic

Economic

Natural

Technological

Political

Cultural

Company

Customers

Intermediaries

Suppliers

Competitors

Publics


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The MicroenvironmentThe Microenvironment

CompanyCompany

CustomersCustomers

PublicsPublics Suppliers Suppliers

CompetitorsCompetitors IntermediariesIntermediaries

Forces Affecting a Company’s Ability to

Serve ItsCustomers

Forces Affecting a Company’s Ability to

Serve ItsCustomers


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The Company’s MicroenvironmentThe Company’s Microenvironment

• Company’s Internal EnvironmentCompany’s Internal Environment- functional areas such as top management, finance, and manufacturing, etc.

• Suppliers Suppliers - provide the resources needed to produce goods and services and are an important link in the “value delivery system”.

• Marketing Intermediaries Marketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers.


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The Company’s MicroenvironmentThe Company’s Microenvironment

• CustomersCustomers - five types of markets that purchase a company’s goods and services.

• CompetitorsCompetitors - those who serve a target market with similar products and services against whom a company must gain strategic advantage.

• PublicsPublics - any group that perceives itself having an interest in a company’s ability to achieve its objectives.


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Types of Customer MarketsTypes of Customer Markets

CompanyCompany

ConsumerMarkets

InternationalMarkets

GovernmentMarkets

BusinessMarkets

ResellerMarkets


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Types of PublicsTypes of Publics

Financial i.e. BanksFinancial i.e. Banks

Media i.e. NewspapersMedia i.e. Newspapers

Government i.e. RegulationsGovernment i.e. Regulations

Citizen-Action i.e. Consumer GroupsCitizen-Action i.e. Consumer Groups

Local i.e. Neighborhood ResidentsLocal i.e. Neighborhood Residents

General PublicGeneral Public

Internal i.e. EmployeesInternal i.e. Employees


3-193-19The MacroenvironmentThe Macroenvironment

DemographicDemographic

TechnologicalTechnological

CulturalCulturalEconomicEconomic

PoliticalPoliticalNaturalNatural

Forces that ShapeOpportunities

and Pose Threatsto a Company

Forces that ShapeOpportunities

and Pose Threatsto a Company


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The Company’s MacroenvironmentThe Company’s Macroenvironment

• DemographicDemographic - studies populations in terms of age, gender, race, occupation, location and other statistics.

• EconomicEconomic - factors that affect consumer purchasing power and spending patterns.

• NaturaNatural - natural resources needed as inputs by marketers or that are affected by marketing activities.


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Key U.S. Demographic TrendsKey U.S. Demographic Trends

Changing Age StructurePopulation is getting olderChanging Age StructurePopulation is getting older

Changing Family StructureMarrying later, fewer children ,

working women, and nonfamily households

Changing Family StructureMarrying later, fewer children ,

working women, and nonfamily households

Geographic ShiftsMoving to the Sunbelt and suburbs (MSA’s)

Geographic ShiftsMoving to the Sunbelt and suburbs (MSA’s)

Increased EducationIncreased college attendance

and white-collar workers

Increased EducationIncreased college attendance

and white-collar workers

Growing Ethnic and Racial Diversity72% Caucasian, 13% African-American ,

11% Hispanic & 3% Asian

Growing Ethnic and Racial Diversity72% Caucasian, 13% African-American ,

11% Hispanic & 3% Asian


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Worldwide Population GrowthWorldwide Population Growth

Population Age Mix Population Age Mix

Ethnic Markets Ethnic Markets

Household PatternsHousehold Patterns

Educational GroupsEducational Groups

Geographical Shifts in PopulationGeographical Shifts in Population

Shift from Mass to MicromarketsShift from Mass to Micromarkets

Demographic Environment

Demographic Environment


3-233-23Economic EnvironmentEconomic Environment

Changing Consumer

SpendingPatterns

Changing Consumer

SpendingPatterns

EconomicDevelopment

EconomicDevelopment

Changes in Income

Changes in Income

KeyEconomic

Concerns forMarketers

KeyEconomic

Concerns forMarketers

Inflationand

Recession

Inflationand

Recession


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Income DistributionIncome Distribution

Subsistence economiesSubsistence economies

Raw-material-exporting economiesRaw-material-exporting economies

Industrializing economiesIndustrializing economies

Industrial economies Industrial economies

Savings, Debt, & Credit AvailabilitySavings, Debt, & Credit Availability

Economic Environment

Economic Environment


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InflationInflation

• Prices rise with no wage increasePurchasing Power decreases

• Increase profit margins by increasing efficiency

• Consumers reaction:– Search for lowest prices– Rely on coupons and sales


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Recession

Recession

• Income, production and employment fall

• Reduced demand for goods and services


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Recession Marketing Strategies

Recession Marketing Strategies

Improve existing productsImprove existing products

Maintain customer servicesMaintain customer services

Introduce new productsIntroduce new products

Emphasize top-of -the line productsEmphasize top-of -the line products


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Natural EnvironmentNatural Environment

Shortages of Raw Materials

Shortages of Raw Materials

Increased Pollution

Increased Pollution

GovernmentalIntervention

GovernmentalIntervention

Factors Affectingthe

NaturalEnvironment

Factors Affectingthe

NaturalEnvironment


3-293-29The Company’sMacroenvironment

The Company’sMacroenvironment • TechnologicalTechnological - forces that create new

technologies, creating new product and market opportunities.

• PoliticalPolitical - laws, agencies and groups that influence and limit organizations and individuals in a given society.

• CulturalCultural - institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors.


3-303-30Technological EnvironmentTechnological Environment

Rapid Pace of Change

Rapid Pace of Change

UnlimitedOpportunities

UnlimitedOpportunities

IncreasedRegulationIncreasedRegulation

Practical, AffordableProducts

Practical, AffordableProducts

Issues in the TechnologicalEnvironment

Issues in the TechnologicalEnvironment


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Technological & Resource Factors

Technological & Resource Factors

• New technology helps firm cope

with other environmental factors

• New technology helps firm carrying out and easuapply of research

• Information technology helps economic growth


3-323-32Political EnvironmentPolitical Environment

Increasing Legislation Designed

to Protect Groups

Increasing Legislation Designed

to Protect Groups

Changing GovernmentAgency

Enforcement

Changing GovernmentAgency

Enforcement

Increasing Emphasis on Ethics and

Socially ResponsibleActions

Increasing Emphasis on Ethics and

Socially ResponsibleActions

Some Trends in the Political Environment Include:


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Political-Legal Environment

Political-Legal Environment

•Regional Groupings–European Union (EU)

–NAFTA

•Consumerism & SIG’s–MADD/SADD

•Ethics & Social Responsibility

•Increased Legislation & Enforcement


3-343-34Cultural EnvironmentCultural Environment

OfOrganizations

OfOrganizations

OfNature

OfNature

OfOneself

OfOneself

OfSociety

OfSociety

Ofthe Universe

Ofthe Universe

OfOthers

OfOthers

Cultural Valuesof a

Society

Cultural Valuesof a

Society


3-353-35Responding to the Marketing Environment

Responding to the Marketing Environment

•Environmental Management PerspectiveEnvironmental 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”, file law suits and

complaints, and form agreements .


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Rest Stop:Reviewing the Concepts

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.

س Copyright 2000 Prentice Hall 3-1 Chapter 5 Analyzing the Marketing Environment.

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