Lec 6 Marketing environment

Objectives
Understanding environmental forces.
Company’s Micro-environment
Company’s Macro-environment
Responding to the marketing environment

Marketing Process

The Marketing Environment
The actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.
The marketing environment is made up of micro-environment (the company, suppliers, marketing intermediaries, customers markets, competitors, and publics),and macro-environment (demographic, economic, natural, technological, political, and culture forces).

Micro-environment
The actors close to the company that affect its ability to serve its customer – the company, suppliers, marketing intermediaries, customers markets, competitors, and publics.

Microenvironment
Marketing must consider other parts of the organization including finance, R&D, purchasing, operations and accounting
Marketing decisions must relate to broader company goals and strategies
Actors
The company
Suppliers
Marketing intermediaries
Customers
Competitors
Publics

Microenvironment
Marketers must watch supply availability and pricing
Effective partnership relationship management with suppliers is essential
Actors
The company
Suppliers
Marketing intermediaries
Customers
Competitors
Publics

Microenvironment
Help to promote, sell and distribute goods to final buyers
Include resellers, physical distribution firms, marketing services agencies and financial intermediaries
Effective partner relationship management is essential
Actors
The company
Suppliers
Marketing intermediaries
Customers
Competitors
Publics

Microenvironment
The five types of customer markets
Consumer
Business
Reseller
Government
International
Actors
The company
Suppliers
Marketing intermediaries
Customers
Competitors
Publics

Microenvironment
Conducting competitor analysis is critical for success of the firm
A marketer must monitor its competitors’ offerings to create strategic advantage
Actors
The company
Suppliers
Marketing intermediaries
Customers
Competitors
Publics

Microenvironment
A group that has an actual or potential interest in or impact on an organization
Seven publics include:
Financial
Media
Government
Citizen-action
Local
General
Internal
Actors
The company
Suppliers
Marketing intermediaries
Customers
Competitors
Publics

Macro-environment
The larger social forces that affect the micro-environment – demographic, economic, natural, technological, political, and culture forces.

Macro-environment
Demographic environment
“The study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics”
Age structure of the population (0-14 years: 32.2%)
Sub-cultures
Geographic shifts in population (people move to the cities in search of employment and a higher standard of living)
Education
Changing in marital states (more single people)

Macro-environment
Economic environment
“Factors that affect consumer buying power and spending patterns”
Value marketing has become the watchword for many marketers. They are looking for ways to offer today’s more financially cautious buyers greater value.
Marketers should pay attention to income distribution as well as average income.
Upper-class consumers, whose spending patterns are not affected by current economic events.
The middle class is somewhat careful about its spending, but can still afford the good life some of the time.
The working class must stick close to the basics of food, clothing, and shelter.
The underclass must count their pennies when making even the most basic purchases.
Consumers at different income levels have different spending patterns.

Macro-environment
Natural Environment:
“Involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities”
Trends
Shortages of raw materials
Air and water may seem to be infinite resources, but some groups see long-run dangers.
Increased pollution
Industry will almost always damage the quality of the natural environment.
Increased government intervention
The governments of different countries vary in their concern and efforts to promote a clean environment.

Macro-environment
Technological environment
“Forces that create new technologies, creating new products and market opportunities”
The most dramatic force shaping our destiny
New technologies create new markets and opportunities. However, every new technology replaces on older technology.
Marketers should watch the technological environment closely.

Macro-environment
Political environment
“Consists of laws, government agencies and pressure groups that influence or limit various organizations and individuals in a given society”
Legislation affecting businesses worldwide has increased
Laws protect companies, consumers and the interests of society
Increased emphasis on socially responsible actions
Cause-Related Marketing
Marketers create link between brand and charitable organization and worthwhile cause.
Demonstrates social responsibility
Helps build positive brand image
Cause-related marketing has become a primary form of corporate giving. It lets companies “do well by doing good”

Macro-environment
Cultural Environment
Made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviors.
Core beliefs
values are passed on from parents to children and are reinforced by schools, religion, business, and government.
Secondary beliefs
are more open to change.(Example: marriage)

Macro-environment
Cultural Environment Includes people’s views of…
Themselves
Identify with brands for self-expression
Others
Recent shift from “me” to “we” society
Organizations
Trend of decline in trust and loyalty to companies
Society
Patriotism on the rise
Nature
“lifestyles of health and sustainability”
Universe
Includes religion and spirituality