THE MARKETING ENVIRONMENT

Reported By: Hilario P. Boribor

MICROENVIRONMENT
I. THE COMPANY
II. THE SUPPLIERS
III. MARKETING INTERMEDIARIES
IV. THE CUSTOMERS
V. THE COMPETITORS
VI. THE PUBLICS

MACROENVIRONMENT
I. DEMOGRAPHIC
II. ECONOMIC
III. NATURE
IV. TECHNOLOGICAL
V. POLITICAL
VI. CULTURAL

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 MICROENVIRONMENT
I. THE COMPANY

1. Vision
2. Mission
3. Goals or Objectives
4. History
5. Organizational Structure
6. Organizational Structure Analysis
7. Functional Analysis
8. Organizational Culture
9. Financial Capacity
10. Production Capacity

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 MICROENVIRONMENT

II. THE SUPPLIERS

1. Provide resources needed to produce goods and

services.
2. Important link in the “value delivery system.”
3. Most marketers treat suppliers like partners.

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 MICROENVIRONMENT

III. MARKETING INTERMEDIARIES

Help the company to promote, sell, and distribute its

goods to final buyers
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries

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 MICROENVIRONMENT

IV. THE CUSTOMERS

• Customer markets must be studied.
1. Consumer
2. Business
3. Government
4. Reseller
5. And international markets
• Successful companies provide better
customer value than the competition.
• Size and industry position is important in
determining the appropriate competitive
strategy.
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 MICROENVIRONMENT

V. THE COMPETITORS
• Those who serve a target market with products
and services that are viewed by consumers as
being reasonable substitutes
• Company must gain strategic advantage against
these organizations

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 Five forces analysis
Potential Entrants

Threat of Entrants

Suppliers THE COMPANY: Buyers

COMPETITIVE
RIVALRY
Bargaining power Bargaining power

Threat of substitutes
Substitutes

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 MICROENVIRONMENT
VI. THE PUBLICS
• Groups that have interest in or impact on an
organization's ability to achieve its objectives

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MACROENVIRONMENT

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MACROENVIRONMENT
• Demographic:
– The study of human populations in terms of size,
density, location, age, gender, race, occupation,
and other statistics.
– Marketers track changing age and family
structures, geographic population shifts,
educational characteristics, and population
diversity.

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MACROENVIRONMENT
• The Economic Environment
– Affects consumer purchasing power and spending
patterns.
– Two types of national economies: subsistence vs.
industrial.
– U.S. consumers now spend carefully and desire
greater value.

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MACROENVIRONMENT
• The Natural Environment
– Concern for the natural environment has grown
steadily, increasing the importance of these
trends:
• Shortage of raw materials
• Increased pollution
• Increased governmental intervention

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MACROENVIRONMENT
• Key Technological Trends
§ The technological environment is characterized
by rapid change.
§ New technologies create new opportunities and
markets but make old technologies obsolete.
§ The U.S. leads the world in research and
development spending.

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MACROENVIRONMENT
• The Political Environment
§ Includes laws, governmental agencies, and
pressure groups that impact organizations and
individuals. Key trends include:
• Increased legislation to protect businesses
as well as consumers.
• Changes in governmental agency
enforcement.
• Increased emphasis on ethical behavior and
social responsibility.

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MACROENVIRONMENT
• The Cultural Environment
§ Is composed of institutions and other
forces that affect a society’s basic values,
perceptions, preferences, and behaviors.
§ Culture can influence decision making.
§ Core beliefs are persistent; secondary cultural
values change and shift more easily.
§ The cultural values of a society are expressed
through people’s views.

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Responding to the Marketing Environment

• Reactive: Passive Acceptance and Adaptation

§ Companies design strategies that avoid threats
and capitalize upon opportunities.
• Proactive: Environmental Management
§ Use of lobbyists, PR, advertorials, lawsuits,
complaints, and contractual agreements to
influence environmental forces.

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 19-1
19-1

PRINCIPLES OF MARKETING
Eighth Edition
Philip Kotler and Gary Armstrong

Chapter
Chapter 19
19

The Global Marketplace

Reporter: Hilario P. Boribor

 Copyright 1999 Prentice Hall

Global
Global Marketing
Marketing Into
Into the
the Twenty-
Twenty-
19-2
19-2

First
First Century
Century
• Global competition is intensifying and few
industries are now safe from foreign competition.

• To compete, companies should continuously

improve their products, expand into foreign markets
and becoming Global Firms.
Firms

• Global firms face several major problems:

– Variable exchange rates,
– Unstable governments,
– Protectionist tariffs and trade barriers,
– Corruption.
 Copyright 1999 Prentice Hall
Decisions
Decisions in
in International
International Marketing
Marketing
19-3
19-3

Looking
Lookingatatthe
theGlobal
Global
Marketing
MarketingEnvironment
Environment

Deciding
DecidingWhether
Whetherto to
Go
GoInternational
International

Deciding
DecidingWhich
WhichMarkets
Markets
to
toEnter
Enter

Deciding
DecidingHow
Howto
toEnter
Enter
the
theMarket
Market

Deciding
Decidingon
onthe
theGlobal
Global
Marketing
MarketingProgram
Program

Deciding
Decidingononthe
theGlobal
Global
Marketing
MarketingOrganization
Organization
 Copyright 1999 Prentice Hall
Looking
Looking at
at the
the Global
Global Marketing
Marketing
19-4
19-4

Environment
Environment

The
The International
International Trade
Trade System
System

The
The World
World Trade
Trade Organization
Organization and
and GATT
GATT

Regional
Regional Free
Free Trade
Trade Zones
Zones

 Copyright 1999 Prentice Hall

Economic
Economic Environmental
Environmental Factors
Factors
19-5
19-5

Subsistence
Subsistence
Economies
Economies

Industrial Country’s
Country’s Raw
Raw Material
Material
Industrial
Economies
Economies
Industrial
Industrial Exporting
Exporting
Structure
Structure Economies
Economies

Industrializing
Industrializing
Economies
Economies
Income Distribution
 Copyright 1999 Prentice Hall
Political-Legal
Political-Legal Environmental
Environmental Factors
Factors
19-6
19-6

Attitudes
Attitudes Toward
Toward Government
Government
International
International Bureaucracy
Bureaucracy
Buying
Buying

Monetary
Monetary Political
Political
Regulations
Regulations Stability
Stability

 Copyright 1999 Prentice Hall

Cultural
Cultural Environmental
Environmental Factors
Factors
19-7
19-7

How
How
Customers
Customers
Think About Business
Business
Think About
and Norms
Norms and
and
and
Use Behavior
Behavior
Use
Products
Products
Cultural
Cultural
Traditions,
Traditions,
Preferences,
Preferences,
and
and
Behaviors
Behaviors
 Copyright 1999 Prentice Hall
Deciding
Deciding Whether
Whether to
to Go
Go
19-8
19-8

International
International
• Reasons companies might consider International
expansion:
– Global competitors attacking the domestic market,
– Foreign markets might offer higher profit
opportunities,
– Domestic markets might be shrinking,
– Need an enlarged customer base to achieve
economies of scale,
– Reduce dependency on any one market,
– Customers might be expanding abroad.
• Most companies do not act until some situation or
event thrusts them into the international market.

 Copyright 1999 Prentice Hall

Deciding
Deciding Which
Which Markets
Markets to
to Enter
Enter
19-9
19-9

Marketer’s Checklist for Identifying

Potential Market

1. Demographic Characteristics.
2. Geographic Characteristics.
3. Economic Factors.
4. Technological Factors.
5. Socio-cultural Factors.
6. National Goals and Plans.

 Copyright 1999 Prentice Hall

Deciding
Deciding How
How to
to Enter
Enter the
the Market
19-10
Market
19-10

Greater
Greater Direct
Direct Investment
Investment

Amount of Commitment, Risk, Control, Joint

and Profit Potential
Joint Venturing
Venturing

Management
Management Contracting
Contracting

Contract
Contract Manufacturing
Manufacturing

Licensing
Licensing

Exporting
Exporting
Lesser
Lesser
 Copyright 1999 Prentice Hall
Deciding
Deciding on
on the
the Global
Global Marketing
19-11
Marketing
19-11

Program
Program
Five International Product and Promotion Strategies
Product
Don’t Change Adapt
Product Product

Don’t Straight Product

Promotion

Change Extension Adaptation

Promotion

Adapt
Communication Dual
Promotion Adaptation Adaptation

Product Invention
Develop New Product

 Copyright 1999 Prentice Hall

Whole-Channel
Whole-Channel Concept
Concept for
for Distribution
Distribution
19-12
19-12

Seller
Seller

Seller’s
Seller’s Headquarters
Headquarters

Channels
Channels Between
Between Nations
Nations

Channels
Channels Within
Within Nations
Nations

Final
Final User
User or
or Buyer
Buyer
 Copyright 1999 Prentice Hall
Deciding
Deciding on
on the
the Global
Global Marketing
Marketing 19-13
19-13

Organization
Organization

International Marketing Activities

Degree of Involvement in
Export
Export Department
Department

International
International Division
Division

Global
Global Organization
Organization

 Copyright 1999 Prentice Hall