1. Marketing environment
Chapter 2
Marketing environment

2. Objectives Identify the six components of the marketing environment.
Explain the types of competition marketers face and the steps necessary for developing a competitive strategy.
Describe how government and other groups regulate marketing activities and how marketers can influence the political-legal environment.

3. Objectives
Outline the economic factors that affect marketing decisions and consumer buying power.
Discuss the impact of the technological environment on a firm’s marketing activities.
Explain how the social-cultural environment influences marketing.

4. Objectives
Describe the role of marketing in society and identify the two major social issues in marketing.
Identify the four levels of the social responsibility pyramid.

5. 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
External environment
Internal environment

6. Marketing intermediaries
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.
Marketing
suppliers
Marketing intermediaries
customers
competitors
publics

7. Microenvironment Actors
Marketers must watch supply availability and pricing
Effective partnership relationship management with suppliers is essential
The company 1
Suppliers 2
Marketing intermediaries 3
Customers 4
Competitors 5
Publics

8. Microenvironment Actors
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
The company 1
Suppliers 2
Marketing intermediaries 3
Customers 5
Competitors 6
Publics

9. Microenvironment Actors The five types of customer markets Consumer
Business
Reseller
Government
International 1
The company 2
Suppliers 3
Marketing intermediaries 4
Customers 5
Competitors 6
Publics

10. Microenvironment Actors
Conducting competitor analysis is critical for success of the firm
A marketer must monitor its competitors’ offerings to create strategic advantage 1
The company 2
Suppliers 3
Marketing intermediaries 4
Customers 5
Competitors 6
Publics

11. Competitor analysis
P&G’s Current and Kao’s Strengths (+) Uni-Charm’s Strengths (+)
Planned Strategy and Weaknesses (-) and Weaknesses (-)
Target Upscale, modern parents who Same as for P&G Same as for P&G, but also
Market(s) can afford disposable diapers budget-conscious segment that includes cloth diaper users (+)
Product Improved fit and absorbency (+); Brand familiarity (+), but no Two brands—for different
brand name imagery weak in longer the best performance (-) market segments and more
Japan () convenient package with handles (+)
Place Distribution through independent Close relations with and control Distribution through 80% of
wholesalers to both food stores over wholesalers who carry only food stores in best
and drugstores (+), but handled Kao products (+); computerized locations (-); shelf space
by fewer retailers () inventory reorder system () for two brands ()
Promotion …………………………………. ………………………………… …………………………..
Price …………………………………. ………………………………… …………………………..

12. Microenvironment Actors
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 1
The company 2
Suppliers 3
Marketing intermediaries 4
Customers 5
Competitors 6
Publics

13. Macro-environment
The larger social forces that affect the micro-environment – demographic, economic, natural, technological, political, and culture forces.
Marketing
Demographic forces
Economic forces
Natural forces
Technological forces
Political forces
Cultural forces

14. 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: 32.6% (male 13,172,641; female 12,548,346)
15-64 years: 62.9% (male 25,102,754; female 24,519,698)
65 years and over: 4.5% (male 1,510,280; female 2,033,288)
(2006 est.)
Geographic shifts in population
people move to the cities in search of employment and a higher standard of living
Education (a better-educated, more whit-collar, more professional population)
Changing in marital states (more single people)
The changing Egyptian family
Sub-cultures
Egyptians 94%, Nubians, Berbers, Bedouin Arabs 4%, Other 2%

15. Veterans Baby Boomer Generation X Generation Y 1920 -1945 2463 - 2488
65+
Baby Boomer
64-45
Generation X
44-30
Generation Y
29-10

16. 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.

17. The Macro-environment
The Economic Environment
Two types of national economies:
subsistence
industrial

18. 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.

19. The Macroenvironment
Many companies use recycling to help protect natural resources
“Environmental Sustainable Strategies”

20. 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.

21. Web sites like iTunes and Amazon
Web sites like iTunes and Amazon.com are now offering customers the option of downloading movies right to their iPods and computers. Do you think DVDs will suffer the same fate as videocassettes?

22. Macro-environment Political and Legal 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

23. Macro-environment Social and Cultural Environment
Made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviors.

24. Internal environment - Owners and Shareholders - Product
Company
4 P’s
- Owners and Shareholders
- Product
- Board of Directors
- Price
- Employees
- Place
- Promotion
- Organizational Culture

25. Social responsibility in the Marketing
Many companies view the marketing environment as an uncontrollable element in which they must react and adapt. They passively accept the marketing environment and do not try to change it.
Other companies take a proactive stance toward the marketing environment. (Example: Cathay Pacific Airlines)