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1 CHAPTER THREE Analyzing the Marketing Environment Lecturer: Insert your name here Ch 1 -1Copyright © 2011 Pearson Education Presentation prepared by Annelie Moukaddem Baalbaki Principles of Marketing, Arab World Edition Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed Tolba Copyright © 2011 Pearson EducationCh 3 - 1
2 Chapter Learning Outcomes Topic Outline 3.1 The Company’s Microenvironment 3.2 The Company’s Macroenvironment 3.3 Demographic Environment 3.4 Economic Environment 3.5 Natural Environment 3.6 Technological Environment 3.7 Political and Social Environment 3.8 Cultural Environment 3.9 Responding to the Marketing Environment Ch Copyright © 2011 Pearson Education
The Marketing Environment The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers. Ch Copyright © 2011 Pearson Education
The Company’s Microenvironment A microenvironment consists of the actors close to the company that affect its ability to serve its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics. Ch Copyright © 2011 Pearson Education
The Company’s Macroenvironment Macroenvironment is the larger societal forces that affect the whole microenvironment – demographic, economic, natural, technological, political, and cultural forces.
The Company’s Microenvironment Ch Copyright © 2011 Pearson Education
The Company’s Microenvironment In designing marketing plans, marketing mgt takes other company groups into account. These interrelated groups form internal environment Top management Finance R&D Purchasing Operations Accounting The Company Ch Copyright © 2011 Pearson Education
The Company’s Microenvironment Suppliers are those firms & individuals that provide resources needed by company and its competitors to produce goods and service. Treated as partners to provide customer value Suppliers form an important link in the company’s overall customer value delivery system Suppliers Ch Copyright © 2011 Pearson Education
The Company’s Microenvironment Marketing Intermediaries Help the company to promote, sell & distribute its products to final buyers Marketing Intermediaries Ch Copyright © 2011 Pearson Education
Resellers are distribution channel firms that help company find customer & make sales Physical distribution firms help company to stock & move G from points of origin to destinations. Mkting S agencies are marketing research firms, advertising agencies, media firms, & mkting consulting firms that help company target & promote its P to right markets. Financial intermediaries help finance transactions or insure against risks associated with buying & selling of goods
Customers Company study 5 types of customer markets. 1. Consumer markets: Individuals & households that buy G/S for personal consumption. 2. Business markets: buy G/S for further processing or for use in their production process. 3. Reseller markets: buy G/S to resell at a profit. 4. Government markets: Gov agencies that buy G/S to produce public services or transfer G/S to others who need them. 5. International markets consist of buyers in other countries, including consumers, producers, resellers, & gov
The Company’s Microenvironment Firms must gain strategic advantage by positioning their offerings against competitors’ offerings in the minds of consumers. No single competitive marketing strategy is best for all companies. Firm should consider its own size & industry position compared to those of its competitors Competitors Ch Copyright © 2011 Pearson Education
The Company’s Microenvironment Publics are any groups that have an actual or potential interest in or impact on an organization’s ability to achieve its objectives. They include: Financial publics Media publics Government publics Citizen-action publics Local publics The general public Internal publics Ch Copyright © 2011 Pearson Education
The Company’s Macroenvironment Ch Copyright © 2011 Pearson Education
Financial publics influence the company’s ability to obtain funds. Media publics carry news, features, & opinion. Government publics regulate public safety, truth in advertising, and other matters. Citizen-action publics include consumer organizations, environmental groups, minority groups, and others. Local publics include neighborhood residents & community organizations. General public may be concerned about the company’s products and activities. Internal publics include workers, managers, volunteers & BOD.
Demographic Environment Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. The demographic environment is important because it involves people, and people make up markets. Demographic trends include age, family structure, geographic population shifts, educational characteristics, and population diversity. Demography Ch Copyright © 2011 Pearson Education
Demographic Environment Baby boomers include people born between 1946 and 1964 This generation accounts for about 30% of the Arab population Baby boomers “think young” no matter how old they are Baby boomers are retiring later and working more after retirement Changing Age Structure of the Population Ch Copyright © 2011 Pearson Education
Demographic Environment Generation X includes people born between 1965 and This generation tends to display the following traits: Skepticism Cautious economic outlook Less materialistic Family comes first Research products before considering a purchase Generation X Ch Copyright © 2011 Pearson Education
Demographic Environment Millennials (Generation Y or Echo Boomers) include those born between 1977 and 2000: Comfortable with technology Includes – Tweens (ages 8–12) – Teens (13–19) – Young adults (20’s) Millennials Ch Copyright © 2011 Pearson Education
Demographic Environment Generational marketing is important in segmenting people by lifestyle, life stage and common values, rather than by age. Generational marketing Ch Copyright © 2011 Pearson Education
Demographic Environment Gender and age are often the basis for defining roles and responsibilities. Women are working more outside the house. Inherited values and traditions are taught to the next generation. Mothers are more involved in family decision making. The Changing Arab Family Ch Copyright © 2011 Pearson Education
Demographic Environment Expatriates are coming to the Arab world lured by high income and a high standard of living. The nationals of most Gulf countries are now a minority population within their own countries. Geographic Shifts in Population Ch Copyright © 2011 Pearson Education
Demographic Environment Since the global recession, unemployment rates have been rising across the Arab world Governments are reassessing their education policies and training programs Education and Employment Ch Copyright © 2011 Pearson Education
Demographic Environment Increased Diversity Markets are becoming more diverse International National Includes: Ethnicity Language Ch Copyright © 2011 Pearson Education
Economic Environment The economic environment consists of factors that affect consumer purchasing power and spending patterns. Industrial economies are richer markets. Subsistence economies consume most of their own agriculture and industrial output. Economic Environment Ch Copyright © 2011 Pearson Education
Economic Environment Value marketing involves ways to offer financially cautious buyers greater value—the right combination of quality and service at a fair price. Changes in Income Ch Copyright © 2011 Pearson Education
Economic Environment Ernst Engel—Engel’s Law As income rises: the percentage spent on food declines the percentage spent on housing remains constant the percentage spent on savings increases. Changes in Consumer Spending Patterns Ch Copyright © 2011 Pearson Education
Natural Environment The 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 Increased pollution Increase government intervention Environmentally sustainable strategies Natural Environment Ch Copyright © 2011 Pearson Education
Technological Environment The technological environment is the most dramatic force in changing the marketplace. It creates new products and opportunities. Safety of new product always a concern. Ch Copyright © 2011 Pearson Education
Political Environment The p olitical environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. Political Environment Ch Copyright © 2011 Pearson Education
Political Environment Legislation Regulating Business Increased legislation Changing government agency enforcement Increased emphasis on ethics Socially responsible behavior Cause-related marketing Ch Copyright © 2011 Pearson Education
Cultural Environment The c ultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors. Cultural Environment Ch Copyright © 2011 Pearson Education
Cultural Environment Core beliefs and values are persistent and are passed on from parents to children and are reinforced by schools, mosques, businesses, and governments. Secondary beliefs and values are more open to change and include people’s views of themselves, others, organizations, society, nature, and the universe. Persistence of Cultural Values Ch Copyright © 2011 Pearson Education
Cultural Environment People’s view of themselves People’s view of others People’s view of organizations People’s view of society People’s view of nature People’s view of the universe Shifts in Secondary Cultural Values Ch Copyright © 2011 Pearson Education
Responding to the Marketing Environment Views on Responding Ch 3 – 32 Copyright © 2011 Pearson Education
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