The Marketing Environment Chapter 4 Chapter 4
Dec 16, 2015
The MarketingEnvironment
Chapter 4Chapter 4
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Objectives
Know the environmental forces that Know the environmental forces that affect the company’s ability affect the company’s ability to serve its customers.to serve its customers.
Realize how changes in the Realize how changes in the demographic and economic demographic and economic environments affect marketing environments affect marketing decisions.decisions.
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Objectives
Identify the major trends in the firm’s Identify the major trends in the firm’s natural and technological natural and technological environments.environments.Know the key changes in the political Know the key changes in the political & cultural environments.& cultural environments.Understand how companies can Understand how companies can react to the marketing environment.react to the marketing environment.
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““Millennial fever” set Millennial fever” set the stage to bring the stage to bring back the VW Beetleback the VW Beetle
VW’s investment: VW’s investment: $ 560 million $ 560 million
Demand quickly Demand quickly outstripped supplyoutstripped supply
cVolkswagenVolkswagen
The new VW beetle The new VW beetle enjoyed cross-enjoyed cross-generational appealgenerational appeal
Earned many awardsEarned many awards
VW’s Beetle now VW’s Beetle now accounts for over 25% accounts for over 25% of company salesof company sales
Discussion: Is VW’s next nostalgia venture, the “flower-power” Microbus, as likely to succeed?
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Key Environments
Marketing EnvironmentMarketing Environment The actors and forces that The actors and forces that
affect a firm’s ability to build affect a firm’s ability to build and maintain successful and maintain successful relationships with relationships with customers.customers.
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Key Environments
Aspects of the marketing Aspects of the marketing environment:environment: Microenvironment: Microenvironment:
Actors close to the companyActors close to the company MacroenvironmentMacroenvironment
Larger societal forcesLarger societal forces
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The Microenvironment
Departments within the company impact Departments within the company impact marketing planning.marketing planning.
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The Microenvironment
Suppliers help to create and deliver Suppliers help to create and deliver customer value.customer value. Treat suppliers as partners.Treat suppliers as partners.
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The Microenvironment
Marketing intermediaries help to sell, promote, Marketing intermediaries help to sell, promote, and distribute goods.and distribute goods. Intermediaries take Intermediaries take
many forms.many forms. ResellersResellers Physical Physical
distribution firmsdistribution firms Marketing services Marketing services
agenciesagencies Financial Financial
intermediariesintermediaries
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The Macroenvironment
Customer markets must be studied.Customer markets must be studied.
Market typesMarket types ConsumerConsumer BusinessBusiness GovernmentGovernment ResellerReseller InternationalInternational
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The Macroenvironment
Successful companies Successful companies provide better customer provide better customer value than the competitionvalue than the competition Size and industry position Size and industry position
help to determine the help to determine the competitive strategy.competitive strategy.
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The Macroenvironment
GovernmentGovernment MediaMedia FinancialFinancial
LocalLocal GeneralGeneral InternalInternal
Various publics must also Various publics must also be considered.be considered.
Citizen Action GroupsCitizen Action Groups
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Figure 4-1:
Actors in the Microenvironment
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Figure 4-2:
Major Macroenvironmental Forces
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The Macroenvironment
Key Demographic TrendsKey Demographic Trends World population World population
growthgrowth Now 6.2 billionNow 6.2 billion Projected to Projected to
reach 7.9 billion reach 7.9 billion by 2025 by 2025
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The Macroenvironment
Key Demographic TrendsKey Demographic Trends Changing age structureChanging age structure
The U.S. population consists The U.S. population consists of seven generational groups. of seven generational groups.
• Baby boomers, Generation X and Baby boomers, Generation X and Generation Y are key groups.Generation Y are key groups.
Distinct segments typically Distinct segments typically exist within these generational exist within these generational groups. groups.
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The Macroenvironment
Born between 1946 and 1964Born between 1946 and 1964Represent 28% of the Represent 28% of the population; earn 50% of population; earn 50% of personal incomepersonal incomeMany mini-segments exist Many mini-segments exist within the boomer groupwithin the boomer groupEntering peak earning years Entering peak earning years as they matureas they matureLucrative market for travel, Lucrative market for travel, entertainment, housing and entertainment, housing and moremore
Baby boomersBaby boomers
Generation XGeneration X
Generation YGeneration Y
Key Key GenerationsGenerations
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The “graying of America” The “graying of America” refers to the fact that as baby refers to the fact that as baby boomers get older, the boomers get older, the average age of the U.S. average age of the U.S. population increases.population increases.
Today, baby boomers are a Today, baby boomers are a great target for exotic travel.great target for exotic travel.
Think ahead to 20 years in Think ahead to 20 years in the future. For what types of the future. For what types of products and services will products and services will baby boomers represent a baby boomers represent a prime target?prime target?
Discussion Question
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The Macroenvironment
Born between 1965 and Born between 1965 and 19761976First latchkey childrenFirst latchkey childrenMaintain a cautious Maintain a cautious economic outlookeconomic outlookShare new cultural Share new cultural concernsconcernsRepresent $125 billion in Represent $125 billion in annual purchasing powerannual purchasing powerWill be primary buyers of Will be primary buyers of most goods by 2010most goods by 2010
Baby boomersBaby boomers
Generation XGeneration X
Generation YGeneration Y
Key Key GenerationsGenerations
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Generation X has been Generation X has been described in the past as described in the past as “working to live” rather “working to live” rather than “living to work.”than “living to work.”
Do you think that this Do you think that this statement reflects statement reflects Generation X’s true Generation X’s true priorities in life? priorities in life?
Why or why not?Why or why not?
Discussion Question
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The Macroenvironment
Born between 1977 and Born between 1977 and 1994199472 million strong; almost as 72 million strong; almost as large a group as their baby large a group as their baby boomer parentsboomer parentsNew products, services, and New products, services, and media cater to Generation Ymedia cater to Generation YComputer, Internet and Computer, Internet and digitally saavydigitally saavyChallenging target for Challenging target for marketersmarketers
Baby boomersBaby boomers
Generation XGeneration X
Generation YGeneration Y
Key Key GenerationsGenerations
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Figure 4-3:
Seven U.S. Generations
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The Macroenvironment
Key Demographic TrendsKey Demographic Trends Changing American Changing American household household Geographic population Geographic population
shifts shifts Better-educated, more Better-educated, more white-collar workforce white-collar workforce Increasing DiversityIncreasing Diversity
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Zoots Video Clip
Working women value products and services that are convenient to use or that save time.
BusinessNow
Click the picture above to play video
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The Macroenvironment
The Economic EnvironmentThe Economic Environment Affects consumer Affects consumer
purchasing power purchasing power and spending and spending patterns.patterns.
U.S. consumers U.S. consumers now spend carefully now spend carefully and desire greater and desire greater value.value.
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The Macroenvironment
The Economic EnvironmentThe Economic Environment Two types Two types of national of national economies: economies:
subsistencesubsistence industrialindustrial
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The Macroenvironment
Key Economic Trends Key Economic Trends U.S. income distribution U.S. income distribution
is skewed.is skewed. Upper class, middle class, Upper class, middle class,
working class, underclass working class, underclass Rich:Rich: getting richer getting richer
Middle class:Middle class: shrinking shrinking Underclass:Underclass: still poor still poor
Consumer spending Consumer spending patterns are changing.patterns are changing.
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The Macroenvironment
The Natural EnvironmentThe Natural Environment Concern for the natural Concern for the natural
environment has grown environment has grown steadily, increasing the steadily, increasing the importance of these trends:importance of these trends: Shortage of raw materialsShortage of raw materials Increased pollutionIncreased pollution Increased governmental Increased governmental
intervention intervention
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The Macroenvironment
Many companies use recycling to help protect Many companies use recycling to help protect natural resourcesnatural resources
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The Macroenvironment
Key Technological TrendsKey Technological Trends The technological environment is The technological environment is
characterized by rapid change.characterized by rapid change. New technologies create new New technologies create new
opportunities and markets but opportunities and markets but make old technologies obsolete.make old technologies obsolete.
The U.S. leads the world in The U.S. leads the world in research and development research and development spending.spending.
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The Macroenvironment
The Political EnvironmentThe Political Environment Includes laws, Includes laws,
governmental governmental agencies, and agencies, and pressure groups pressure groups that impact that impact organizations and organizations and individuals. individuals.
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The Macroenvironment
The Political EnvironmentThe Political Environment Key trends include:Key trends include:
Increased legislation to protect Increased legislation to protect businesses as well as consumers. businesses as well as consumers.
Changes in governmental agency Changes in governmental agency enforcement. enforcement.
Increased emphasis on ethical Increased emphasis on ethical behavior and social responsibility. behavior and social responsibility.
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The Macroenvironment
Cause-related marketing is one method Cause-related marketing is one method of demonstrating social responsibilityof demonstrating social responsibility
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The Macroenvironment
The Cultural EnvironmentThe Cultural Environment Is composed of institutions and Is composed of institutions and
other forces that other forces that affect a society’s affect a society’s basic values, basic values, perceptions, perceptions, preferences, preferences, and behaviors.and behaviors.
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The Macroenvironment
Core beliefs are persistentCore beliefs are persistent Passed from parents Passed from parents
to children; reinforced to children; reinforced by societyby society
Shape attitudes and behaviorShape attitudes and behavior
Secondary cultural values change Secondary cultural values change and and shift more easilyshift more easily
Society’s cultural values Society’s cultural values are expressed through are expressed through people’s views of:people’s views of: ThemselvesThemselves OthersOthers OrganizationsOrganizations SocietySociety NatureNature The UniverseThe Universe
The Cultural EnvironmentThe Cultural Environment
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Responding to the Marketing Environment
Reactive:Reactive: Passive Acceptance and Adaptation Passive Acceptance and Adaptation Companies design strategies that avoid threats and Companies design strategies that avoid threats and
capitalize upon opportunities.capitalize upon opportunities.
Proactive:Proactive: Environmental ManagementEnvironmental Management Use of lobbyists, PR, advertorials, lawsuits, complaints, and Use of lobbyists, PR, advertorials, lawsuits, complaints, and
contractual agreements to influence environmental forces.contractual agreements to influence environmental forces.