Analyzing the Marketing Environment Chapter Three Analyzing the Marketing Environment

Analyzing the Marketing Environment Topic Outline The Company’s Microenvironment The Company’s Macroenvironemnt Responding to the Marketing Environment

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

The Marketing Environment More than any other group in company, marketers must be the opportunity seekers. They have disciplined methods- marketing research and marketing intelligence for collecting information about the marketing environment, by studying the environment, marketers can adapt strategies to meet the challenges and opportunities

The Marketing Environment 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

The Company’s Microenvironment Actors in the Microenvironment

The Company’s Microenvironment Marketing management’s job is to build relationships with customers by creating customer value and satisfaction. However, marketing managers cant do this alone.

The Company’s Microenvironment In designing marketing plans, marketing management takes other company groups into account, these groups such as:

The Company’s Microenvironment Top management Finance R&D Purchasing Operations Accounting Note to Instructor Discussion Questions What types of collaboration does there need to be between the departments? How might projects be integrated between marketing and finance? How might projects be integrated between marketing and information systems? This question on finance could lead to a discussion about budgeting for marketing. The collaboration between marketing and IS could lead to discussions of market research, ordering systems, and customer relationship management systems.

The Company’s Microenvironment Suppliers Provide the resources to produce goods and services Suppliers problems can affect marketing. Marketing managers must watch supply availability and costs, supply shortages or delays, labor strikes can cause sales in the short run and damage customer satisfaction in the long run

The Company’s Microenvironment Suppliers Rising supply costs may force price increases than can harm the company’s sales volume. Treated as partners to provide customer value

The Company’s Microenvironment Marketing Intermediaries Help the company to promote, sell and distribute its products to final buyers Note to Instructor The text explains how Coke delivers value for their marketing intermediaries: They understand each retailer partner’s business The conduct consumer research and share with partners They develop marketing programs and merchandising for partners

The Company’s Microenvironment Types of Marketing Intermediaries Resellers Physical distribution firms Marketing services agencies Financial intermediaries

The Company’s Microenvironment Resellers Are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers who buy and resell merchandise

The Company’s Microenvironment Physical distribution firms Help the company to stock and move goods from their point of origin to their destinations

The Company’s Microenvironment Marketing services agencies Are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets

The Company’s Microenvironment Financial intermediaries Such as banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods.

________ include resellers, marketing service agencies, and financial firms that help a company to promote and sell its offerings to its final customers. Advertising agencies Suppliers Intelligence firms Marketing intermediaries

________ include resellers, marketing service agencies, and financial firms that help a company to promote and sell its offerings to its final customers. Advertising agencies Suppliers Intelligence firms Marketing intermediaries

Banks, insurance companies, and credit companies that aid in financial transactions are called ________. financial intermediaries marketing services agencies physical distribution firms positioning

Banks, insurance companies, and credit companies that aid in financial transactions are called _________. financial intermediaries marketing services agencies physical distribution firms positioning

The Company’s Microenvironment Competitors The marketing concept states that to be successful, a company must provide greater customer value and satisfaction than its competitors do. Firms must gain strategic advantage by positioning their offerings against competitors’ offerings Note to Instructor Students should note that the competition is just a click away with online purchasing. This link goes to Bizrate—one of many comparison shopping sites online. Enter a product like coffee makers to see the competing products and retailers for this category.

The Company’s Microenvironment Publics Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives Financial publics Media publics Government publics Citizen-action publics Local publics General public Internal publics Note to Instructor In slideshow view, click on movie icon to launch Tom’s Shoes video snippet. See accompanying DVD for full video segment

The Company’s Microenvironment Publics Financial publics: this group influences the company’s ability to obtain funds, banks, investment houses, and stockholders Media publics: this group carries news, features. It includes newspapers, magazines, radio and television stations

The Company’s Microenvironment Publics Government publics: management must take government developments into account, marketers must consult the company’s lawyers on issues of product safety, truth in advertising Citizen action publics: a company’s marketing decisions maybe questioned by consumer organizations , environmental groups and others

The Company’s Microenvironment Publics Local publics: this group includes neighborhood residents and community organizations. Large companies appoint a community relations officer to deal with the community, attend meetings, answer questions and contribute to the worthwhile causes

The Company’s Microenvironment Publics General public: a company needs to be concerned about the general public’s attitude towards its products and activities Internal publics: this group includes workers, managers, volunteers and the board of directors.

The Company’s Microenvironment customers Customers are the most important actors in the company’s microenvironment. The aim of the entire system is to serve target customers and create strong relationships with them There are five types of customer markets

The Company’s Microenvironment Customers Consumer markets: consist of individuals and households that buy goods and services for personal consumption Business markets: buy goods and services for further processing or for use in the production process Reseller markets: buy goods and services to resell at a profit

The Company’s Microenvironment Customers Government markets: are made up of government agencies that buy goods and services to produce public services or transfer good and services to others who need them International markets: consist of these buyers in other countries, including consumers, producers, sellers and governments

Financial, media, government, and citizen-action are several types of ________. 1. taxing authorities 2. legal departments 3. publics 4. marketing mix elements

Financial, media, government, and citizen-action are several types of ________. 1. taxing authorities 2. legal departments 3. publics 4. marketing mix elements

A company’s ________ consists of its suppliers, marketing intermediaries, customers, competitors, and publics. macroenvironment microenvironment business environment marketing environment

A company’s ________ consists of its suppliers, marketing intermediaries, customers, competitors, and publics. macroenvironment microenvironment business environment marketing environment

The Company’s Macroenvironment

The Company’s Macroenvironment Demographic Environment Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics 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

The Company’s Macroenvironment Demographic Environment Changing age structure of the population _ The post world war II baby boom produced 78 million Baby boomers include people born between 1946 and 1964 Most affluent Americans The baby boomers have been one of the Most powerful forces shaping the marketing Environment Note to Instructor There are many Web sites targeted to boomers including this link to Boomers International. Before following the link it might be interesting to ask the following: Discussion Questions What type of information boomers might be seeking?

The Company’s Macroenvironment Demographic Environment Generation X includes people born between 1965 and 1976 High parental divorce rates Cautious economic outlook as they grown up during time of recession & corporate downsizing

The Company’s Macroenvironment Demographic Environment Less materialistic “ they prize experience not acquisition “ Family comes first, career second Lag behind on retirement savings

The Company’s Macroenvironment Demographic Environment Millennials (gen 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)

The Company’s Macroenvironment Demographic Environment Generational marketing is important in segmenting people by lifestyle of life state instead of age. some experts warn marketers to be careful about turning off one generation each time they craft a product or message that appeals effectively to another

The Company’s Macroenvironment Demographic Environment More people are: Divorcing or separating Choosing not to marry Choosing to marry later Marrying without intending to have children Increased number of working women Stay-at-home dads

The Company’s Macroenvironment Demographic Environment Growth in U.S. West and South and decline in Midwest and Northeast Moving from rural to metropolitan areas Changes in where people work Telecommuting “ work at home or in a remote office to conduct the business by phone, fax or internet” Home office Divorcing or separating

The Company’s Macroenvironment Demographic Environment Changes in the Workforce More educated, the increased number of educated people will increase the demand for quality products, books , magazines, and personal computers More white collar Note to Instructor Students are probably very familiar with job search sites such as this link to monster.com. It might be interesting to compare the listings for white collar versus blue collar job opportunities including the associated pay and benefits.

The Company’s Macroenvironment Demographic Environment Increased Diversity Markets are becoming more diverse International National Includes: Ethnicity Gay and lesbian Disabled

The baby boomer generation is made up of the period ________. 1. 1960–1971 2. 1946–1964 3. 1980s 4. 1920–1929

The baby boomer generation is made up of the period ________. 1. 1960–1971 2. 1946–1964 3. 1980s 4. 1920–1929

The Company’s Macroenvironment Economic Environment Economic environment consists of factors that affect consumer purchasing power and spending patterns Nations vary greatly in their levels and distribution of income, some countries have the industrial economies which constitute rich markets for many different kinds of goods

The Company’s Macroenvironment Economic Environment Subsistence economies consume most of their own agriculture and industrial output and offer few market opportunities In between are developing economies which can offer outstanding marketing opportunities for the right kinds of products

The Company’s Macroenvironment Economic Environment Changes in income Value marketing involves ways to offer financially cautious buyers greater value—the right combination of quality and service at a fair price Note to Instructor This graphic highlights a car targeted to India’s growing middle class. Discussion Questions What changes might there be in U.S. income over the next year? What are positioned as “value cars.” The students might quote current economic declines or rises. The “value cars” will probably include some of the smaller cars by Kia, Ford, Honda, and Toyota.

The “shop until you drop” mentality of the 1990s has been replaced with a more ________ approach. “save all you can” “value is key” “don’t shop at all” “splurge regularly”

The “shop until you drop” mentality of the 1990s has been replaced with a more ________ approach. “save all you can” “value is key” “don’t shop at all” “splurge regularly”

The Company’s Macroenvironment Economic Environment Changes in Consumer Spending Patterns Ernst Engel—Engel’s Law Differences noted over a century ago by Ernst Engel in how people shift their spending across food, housing, transportation, health care, and other goods and services categories as family income rises

The Company’s Macroenvironment Economic Environment Changes in Consumer Spending Patterns As income rises: The percentage spent on food declines The percentage spent on housing remains constant The percentage spent on savings increases

The Company’s Macroenvironment Natural 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 Increased pollution Increase government intervention Environmentally sustainable strategies Note to Instructor This Web link connects to greenbiz.com. There are several Web sites like this that provide information on business as to how to practice green strategies including green marketing.

The Company’s Macroenvironment Natural Environment Environmental sustainability: Developing strategies and practices that create a world economy that the planet can support indefinitely, they are responding to consumer demands with more environmentally responsible products.

There are three trends in the natural environment that marketers are monitoring. These are ________, ________, and ________. shortages of raw materials; increased legislation; increased consumerism the green movement; shortages of raw materials; increased pollution increased pollution; increased government intervention; shortages of raw materials increased consumerism; increased population; increased ethical expectations

There are three trends in the natural environment that marketers are monitoring. These are ________, ________, and ________. shortages of raw materials; increased legislation; increased consumerism the green movement; shortages of raw materials; increased pollution increased pollution; increased government intervention; shortages of raw materials increased consumerism; increased population; increased ethical expectations

The Company’s Macroenvironment Technological Environment Forces that create new technologies, creating new products and market opportunities

The Company’s Macroenvironment Technological Environment Most dramatic force in changing the marketplace Creates new products and opportunities Safety of new product always a concern Note to Instructor Discussion Question Ask students what changes they have seen in technology in the past four years including medical products, communications, and media. They will most likely talk about the use of artificial organs and stem cell research, the growth of PDA’s like the iPod, and the use of new media products including DVR or TiVo.

The Company’s Macroenvironment Political Environment Political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society

The Company’s Macroenvironment Political Environment Legislation regulating business Increased legislation Business legislation has been enacted for two reasons: To protect companies from each other To protect consumers from unfair business practices such as telling lies in the advertisement

The Company’s Macroenvironment Political Environment _ Changing government agency enforcement * International marketers will encounter dozens, or even hundreds of agencies set up to enforce trade policies and regulations. * Marketers need to know about major laws protecting competition, consumers and society. They need to understand these laws at local, national and international levels

The Company’s Macroenvironment Political Environment Increased emphasis on ethics Socially responsible behavior” companies encourage their managers to look beyond the regulatory system allows and simply “ do the right things “ these socially responsible firms seek out ways to protect the long run interests of their consumers and the environment”

The Company’s Macroenvironment Political Environment Cause-related marketing: To exercise the social responsibility and build more positive images, many companies are now linking themselves to worthwhile causes. These days, every product seems to be tied to some cause. This concept link the purchases of the company products and services with fundraising for worthwhile causes or charitable organizations. But this concept can be a more strategy for selling than a strategy for giving

Which of the following is not one of the reasons business legislation is enacted? To protect companies from each other To protect companies from consumers To protect consumers from unfair business practices To protect the interests of society

Which of the following is not one of the reasons business legislation is enacted? To protect companies from each other To protect companies from consumers To protect consumers from unfair business practices To protect the interests of society

In exercising their corporate social responsibility and building a more positive image, companies are now linking themselves to worthwhile causes. This is referred to as ________. marketing mix marketing concept cause-related marketing Engel’s Law

In exercising their corporate social responsibility and building a more positive image, companies are now linking themselves to worthwhile causes. This is referred to as __________________. marketing mix marketing concept cause-related marketing Engel’s Law

The Company’s Macroenvironment Cultural Environment Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors

The Company’s Macroenvironment Cultural Environment Persistence of Cultural Values Core beliefs and values are persistent and are passed on from parents to children and are reinforced by schools, churches, businesses, and government Secondary beliefs and values are more open to change and include people’s views of themselves, others, organization, society, nature, and the universe

The Company’s Macroenvironment Cultural Environment Shifts in Secondary Cultural Values People’s view of themselves Yankelovich Monitor’s consumer segments: Do-it-yourselfers—recent movers “ embodying the whole do-it-yourself attitude” Adventurers “ They like to view themselves as doing things others wouldn’t dare to do” Note to Instructor Do-It-Yourselfers—Recent Movers: Active consumers also view the experience as a form of self-expression. They view their homes as their havens View their projects as personal victories over the high-priced marketplace. Adventurers: Rarely follow a single path or do the same thing twice. View the experience as far more exciting than the entertainment value. They are more likely to engage in activities most think are too dangerous.

The Company’s Macroenvironment Cultural Environment Shifts in Secondary Cultural Values People’s view of others More “cocooning” : in which people are going out less with others and are staying home more to enjoy the creature comforts of home and hearth – from the networked home office to home entertainment centers.

The Company’s Macroenvironment Cultural Environment Shifts in Secondary Cultural Values People’s view of organizations “people vary in their attitudes towards corporations, government agencies , universities and trade unions” People’s view of society Patriots defend it Reformers want to change it Malcontents want to leave it

The Company’s Macroenvironment Cultural Environment Shifts in Secondary Cultural Values People’s view of nature Some feel ruled by it Some feel in harmony with it Some seek to master it People’s view of the universe Renewed interest in spirituality “ concerned with the meaning of life and issues of soul and spirit”

Yankelovich identifies consumer segments whose purchases are motivated by self-views. Two examples are _________ and __________. Generation M; generation N Refilled nests; do-it-yourselfers Do-it-yourselfers; adventurers marketing mix; positioning

Yankelovich identifies consumer segments whose purchases are motivated by self-views. Two examples are _________ and __________. Generation M; generation N Refilled nests; do-it-yourselfers Do-it-yourselfers; adventurers marketing mix; positioning

A woman who drives a hybrid car, consistently recycles, and buys “earth-friendly” products is acting out her view of ________. cost non-profit organizations others nature

A woman who drives a hybrid car, consistently recycles, and buys “earth-friendly” products is acting out her view of ________. cost non-profit organizations others nature

Which of the following are included in the major forces affecting a company’s macroenvironment? Marketing mix, positioning, price cultural, political/legal, economic Marketing concept, goal setting, cultural Baby boomers, minimum wage rates, product/service

Which of the following are included in the major forces affecting a company’s macroenvironment? Marketing mix, positioning, price Cultural, political/legal, economic Marketing concept, goal setting, cultural Baby boomers, minimum wage rates, product/service

Responding to the Marketing Environment Views on Responding Uncontrollable React and adapt to forces in the environment and don’t try to change it Proactive Aggressive actions to affect forces in the environment Reactive Watching and reacting to forces in the environment

A company has several options with regard to its marketing environment A company has several options with regard to its marketing environment. A strong company takes a(n) ________ approach. proactive reactive ingenuous peaceful

A company has several options with regard to its marketing environment A company has several options with regard to its marketing environment. A strong company takes a(n) ________ approach. proactive reactive ingenuous peaceful

A company’s macroenvironment consists of all of the following except ________. demographic forces economic forces competitive forces technological forces

A company’s macroenvironment consists of all of the following except ________. demographic forces economic forces competitive forces technological forces