two Markets PART Chapter 4: The marketing environment Chapter 5: Consumer markets Chapter 6: Business-to-business marketing Chapter 7: Marketing research two PART

Video Case: Marketing Birmingham (1) Does the marketing of cities, such as Birmingham, Lyon, or Munich, differ to that of goods and services? Why is market research important? How does it help marketing decision-makers in their efforts to (a) build and sustain a brand’s image and positioning; (b) develop effective marketing and communications campaigns; and (c) to determine marketing effectiveness? Principles of Marketing 5e, © Pearson Education 2008

Video Case: Marketing Birmingham (2) Why must an organisation measure the economic and non-economic impacts of its marketing activities and identify ways in which new web-based technologies enable marketers to evaluate the returns on their firm’s marketing spend? Principles of Marketing 5e, © Pearson Education 2008

Video Case: Marketing Birmingham (2) Principles of Marketing 5e, © Pearson Education 2008

The marketing environment CHAPTER four The marketing environment

Previewing concepts (1) Describe the environmental forces that affect a company’s ability to serve its customers Explain how changes in the demographic and economic environments affect marketing decisions Principles of Marketing 5e, © Pearson Education 2008

Previewing concepts (2) 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 Principles of Marketing 5e, © Pearson Education 2008

Prelude case: Big food has a lot on its plate Principles of Marketing 5e, © Pearson Education 2008

What is the marketing environment? The marketing environment is made the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers. Principles of Marketing 5e, © Pearson Education 2008

Figure 4.1 The microenvironment Principles of Marketing 5e, © Pearson Education 2008

The company’s internal environment Top management Finance Research and development Purchasing Manufacturing Accounting Principles of Marketing 5e, © Pearson Education 2008

What are suppliers? Suppliers are firms and individuals that provide the resources needed by the company and its competitors to produce goods and services. Principles of Marketing 5e, © Pearson Education 2008

Marketing intermediaries Resellers Physical distribution firms Marketing services agencies Financial intermediaries Principles of Marketing 5e, © Pearson Education 2008

What are resellers? Resellers are individuals and organisations that buy goods and resell at a profit. Principles of Marketing 5e, © Pearson Education 2008

What are physical distribution firms? Physical distribution firms are warehouse, transportation, and other firms that help a company to stock and move goods from their points of origin to their destinations. Principles of Marketing 5e, © Pearson Education 2008

What are marketing services agencies? Marketing services agencies are marketing research firms, advertising agencies, media firms, marketing consulting firms, and other service providers that help a company to target and promote its products to the right markets. Principles of Marketing 5e, © Pearson Education 2008

What are financial intermediaries? Financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against risks associated with buying and selling goods. Principles of Marketing 5e, © Pearson Education 2008

Customers Principles of Marketing 5e, © Pearson Education 2008

Publics Financial publics Media publics Government publics Citizen action publics Local publics General public Internal publics Principles of Marketing 5e, © Pearson Education 2008

The company’s macroenvironment Principles of Marketing 5e, © Pearson Education 2008

Demographic environment Demography is the study of human populations in terms of size, density, location, age, gender, and race occupation Demographic trends include population growth, changing age and household structure, pressures for migration and population diversity Principles of Marketing 5e, © Pearson Education 2008

Should marketers create separate products and marketing programmes generational groups? Baby boomers GenXers Generation Y Echo boomers Principles of Marketing 5e, © Pearson Education 2008

Figure 4.6 Europe’s ageing population Principles of Marketing 5e, © Pearson Education 2008

Older people living alone: a growing trend Principles of Marketing 5e, © Pearson Education 2008

The changing household Principles of Marketing 5e, © Pearson Education 2008

Common EU migration patterns Older people from former industrialised regions in the Benelux countries, Germany, and Britain to the ‘sun belts’ Younger people from the less economically advanced eastern European states of the EU to the richer western EU states Principles of Marketing 5e, © Pearson Education 2008

The economic environment The factors that affect consumer buying power and spending patterns Nations very in their levels and distribution of income Subsistence economies Industrial economies Principles of Marketing 5e, © Pearson Education 2008

European Union enlargement and integration Goal to achiever economic integration among member states Established in 1993 by the Treaty on European Union (The Maastricht Treaty) Largest economy in the world GDP of 11.6 million 35% of world’s GDP World’s largest exporter World’s second largest importer Principles of Marketing 5e, © Pearson Education 2008

Income distribution Upper income Middle income Lower income Underclass Principles of Marketing 5e, © Pearson Education 2008

WIDER measures world wealth distributions Principles of Marketing 5e, © Pearson Education 2008

What are Engel’s Laws? Ernst Engel found that as family income rises, the percentage spent on food declines, the percentage spent on housing remains constant, and the percentage spent on other categories and savings increases. Principles of Marketing 5e, © Pearson Education 2008

How should we market to the very wealthy? Remember the wealthy are just like us Recognize that the super-rich are not one culture Know that the very wealthy can indulge their tastes To sell to the rich, you must know how and where they live, where they go, what they do Principles of Marketing 5e, © Pearson Education 2008

Natural environment trends Growing shortage of raw materials Increased cost of energy Increased pollution and climate change Government intervention in natural resource management Principles of Marketing 5e, © Pearson Education 2008

GE focuses on environmentally sustainable marketing strategies Principles of Marketing 5e, © Pearson Education 2008

Trends in the technological environment Fast pace of technological change Increased regulation Principles of Marketing 5e, © Pearson Education 2008

What factors are part of the political environment? The political environment includes laws, government agencies, and pressure groups that influence and limit various organisations and individuals in a given society. Principles of Marketing 5e, © Pearson Education 2008

Public policy implications Laws are created at different levels Member states vary in the extent to which they comply with EU legislation Regulations are constantly changing Principles of Marketing 5e, © Pearson Education 2008

Marks & Spencer participates in cause-related marketing Principles of Marketing 5e, © Pearson Education 2008

Cultural characteristics affecting marketing decision making Persistence of cultural values Shifts in secondary cultural values People’s views of themselves People’s views of others People’s views of organisations People’s views of society People’s views of nature People’s views of the universe Principles of Marketing 5e, © Pearson Education 2008

Consumer segments related to views of self I am expressive I am driven I am at capacity I am rock steady I am down to earth I am sophisticated I measure twice I am devoted Principles of Marketing 5e, © Pearson Education 2008

Cathay Pacific responded to environmental issues with its Hong Kong hub Principles of Marketing 5e, © Pearson Education 2008

Discussing the concepts What can mobile phones marketers do to take a more proactive approach to the changes in the company’s marketing environment? What leading demographic factors must Internet service providers consider when marketing their products? How could SUVs be repositioned to address concerns about the natural environment? Principles of Marketing 5e, © Pearson Education 2008