Lecture 4 : Analyzing the Marketing

Environment
Chapter 3

Marketing fundamentals 1
 In this chapter,
• you’ll see that marketing operates in a complex and changing
environment.

• To develop effective marketing strategies, a company must

first understand the environment in which marketing
operates.

Marketing fundamentals 2
 Marketing environment

• Marketing environment
The actors and forces outside marketing that affect marketing
management’s ability to build and maintain successful
relationships with target customers.

• By carefully studying the environment, marketers can adapt

their strategies to meet new marketplace challenges and
opportunities

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 Marketing environment

The marketing environment consists of:

• Microenvironment
The actors close to the company that affect its ability to serve
its customers— the company, suppliers, marketing
intermediaries, customer markets, competitors, and publics.
• Macroenvironment
The larger societal forces that affect the microenvironment—
demographic, economic, natural, technological, political,
and cultural forces.

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Actors in the Microenvironment

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 The Company
• In designing marketing plans, marketing management takes
other company groups into account—groups such as
– top management
– Finance
– Research and development (R&D),
– Purchasing
– Operations
– Accounting.

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 Suppliers

• Suppliers form an important link in the company’s overall

customer value delivery network

• Provide the resources to produce goods and services

• Supply shortages or delays, labor strikes, natural disasters,

and other events can cost sales in the short run and damage
customer satisfaction in the long run.

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 Suppliers

• Honda knows the

importance of building
close relationships
with its extensive
network of suppliers

• “Almost 100 percent of

the original suppliers
selected in the late
1980s are still Honda
suppliers today,” says the
insider

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 Marketing intermediaries

Marketing intermediaries
Firms that help the company to promote, sell, and distribute its
goods to final buyers. They include:

• Physical distribution firms: help the company stock and move

goods from their points of origin to their destinations.

• Resellers: are distribution channel firms that help the

company find customers or make sales to them.

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 Marketing intermediaries

• 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.

• Financial intermediaries: include 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.

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 Marketing intermediaries

• today’s marketers recognize

the importance of working
with their intermediaries as
partners rather than simply
as channels through which
they sell their products .

• Example : Coca-Cola

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 Competitors

• Firms must gain strategic advantage by positioning their

offerings strongly against competitors’ offerings in the minds
of consumers.

• No single competitive marketing strategy is best for all

companies. Each firm should consider its own size and
industry position compared to those of its competitors

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 Public

• Public
Any group that has an actual or potential interest in or impact
on an organization’s ability to achieve its objectives.

Seven types of publics:

• Financial publics: This group influences the company’s ability
to obtain funds. Banks, investment analysts
• Media publics: This group carries news, features, and editorial
opinion.
• Government publics: Management must take government
developments into account. Example: issues of product safety

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 Public

• Citizen-action publics: A company’s marketing decisions may be

questioned by consumer organizations, environmental groups, minority
groups, and others

• Internal publics: This group includes workers, managers, volunteers, and

the board of directors. Large companies use newsletters and other means
to inform and motivate their internal publics. When employees feel good
about the companies they work for, this positive attitude spills over to the
external publics.

• Local publics: companies usually create departments and programs that

deal with local community issues and provide community support

• General public: A company needs to be concerned about the general

public’s attitude toward its products and activities.

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 Customers

Customers are the most important actors in the

company’s microenvironment.

The company might target any or all five types of

customer markets:

• Consumer markets
• Business markets
• Reseller markets
• Government markets
• International markets

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 The Macroenvironment

• The company and all of the other actors operate in a larger

macroenvironment of forces that shape opportunities and
pose threats to the company.

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 The Demographic Environment

• Demography
The study of human populations in terms of size, density,
location, age, gender, race, occupation, and other statistics.

• The demographic environment is of major interest to

marketers because it involves people, and people make up
markets.

• Changes in the world demographic environment have

major implications for business

• Marketers keep a close eye on demographic trends and

developments in their markets:

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 Examples of demographic changes and trends

• The Changing Age Structure of the Population

– Baby Boomers - born 1946 to 1964
– Generation X - born between 1965 and 1976
– Millennials- born between 1977 and 2000
– Generation Z – born after 2000
• Generational Marketing
Marketers need to form more precise age-specific segments within
each group.
• Important in segmenting people by lifestyle or life stage instead of
age.
Such as: They split Generation Z into kids, tweens, and teens

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 Examples of demographic changes and trends

• The Changing American Family

• Geographic population shifts

• Educational characteristics: A Better-Educated, More White-

Collar, More Professional Population

• Population diversity.

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 The Economic Environment

The economic environment consists of economic factors that

affect consumer purchasing power and spending patterns.

• Changes in Consumer Spending

Great Recession of 2008–2009

Value marketing Marketers in all industries are looking for ways

to offer today’s more financially frugal buyers greater value—just
the right combination of product quality and good service at a
fair price

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 The Economic Environment

Income Distribution

Changes in major economic variables, such as income, cost

of living, interest rates, and savings and borrowing
patterns, have a large impact on the marketplace.

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 The Natural Environment

• The physical environment and the natural resources that are

needed as inputs by marketers or that are affected by
marketing activities.

• Although companies can’t prevent such natural occurrences,

they should prepare for dealing with them.

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 The Natural Environment

• Marketers should be aware of several trends in the natural

environment :
– Growing shortages of raw materials
– Increased pollution
– Increased government intervention in natural resource
management
– Environmental sustainability

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 The Natural Environment

Environmental sustainability:
Developing strategies and practices that
create a world economy that the planet can
support indefinitely.
Many companies are responding to
consumer demands with more
environmentally responsible products:
• Developing recyclable or biodegradable
packaging
• Recycled materials and components
• Better pollution controls
• More energy-efficient operations

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 Technological environment

• Technological environment Forces that create new

technologies, creating new product and market opportunities.

• The technological environment changes rapidly, creating new

markets and opportunities. However, every new technology
replaces an older technology (Digital photography hurt the
film business)

• When old industries fight or ignore new technologies, their

businesses decline.

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 Technological environment

• The challenge in each case is not only technical but also

commercial—to make practical, affordable versions of these
products.

• As products and technologies become more complex, the

public needs to know that these items are safe. Thus,
government agencies investigate and ban potentially unsafe
products

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 The Political and Social Environment

Political environment consists of laws, government agencies,

and pressure groups, that influence or limit various organizations
and individuals in a given society.

• Legislation Regulating Business

• Increased Emphasis on Ethics and Socially Responsible
Actions
– Socially Responsible Behavior
– Cause-Related Marketing

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 The Political and Social Environment

• Increasing Legislation. Legislation affecting business around

the world has increased steadily over the years.

• For example: The United States has many laws covering issues
such as competition, environmental protection, product
safety, truth in advertising, packaging and labeling, pricing,
and other important areas

• Marketers must work hard to keep up with changes in

regulations and their interpretations.

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 The Political and Social Environment

• Business legislation has been enacted for a number of

reasons:

 Protect companies from each other laws are passed to

define and prevent unfair competition
 To protect consumers from unfair business practices
 To protect the interests of society against unrestrained
business behavior

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 The Political and Social Environment

Increased Emphasis on Ethics and Socially Responsible Actions

beyond written laws and regulations, business is also
governed by social codes and rules of professional ethics.

• Socially Responsible Behavior.

Enlightened companies encourage their managers to
look beyond what the regulatory system allows and simply
“do the right thing.”

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 The Political and Social Environment

Cause-Related Marketing
To exercise their social responsibility and build more positive
images, many companies are now linking themselves to
worthwhile causes.

• It lets companies “do well by doing good”

• Cause-related marketing has stirred some controversy. Critics

worry that cause-related marketing is more a strategy for
selling than a strategy for giving—that “cause-related”
marketing is really “cause-exploitative” marketing.

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 The Cultural Environment

• The Cultural Environment

Institutions and other forces that affect society’s basic values,
perceptions, preferences, and behaviors.

• People grow up in a particular society that shapes their basic

beliefs and values.

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 The Cultural Environment

• The Persistence of Cultural Values

People in a given society hold many beliefs and values

– Core beliefs and values are passed on from parents to

children and are reinforced by schools, business, and
government.

– Secondary beliefs and values are more open to change.

Believing in marriage is a core belief; believing that people
should get married early in life is a secondary belief.

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 The Cultural Environment

• Shifts in Secondary Cultural Values

People’s Views of Themselves
People vary in their emphasis on serving themselves
versus serving others.
People’s Views of Others
In past decades, observers have noted several shifts in
people’s attitudes toward others
People’s Views of Organizations
People’s Views of Society
People’s Views of Nature
People’s Views of the Universe.

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 Responding to the Marketing
Environment
Views on Responding:
Proactive stance: Rather than assuming that strategic options
are bounded by the current environment
• These firms develop strategies to change the environment.
Companies and their products often create and shape new
industries and their structures.

• Take aggressive actions to affect the publics and forces in their

marketing environment simply watching and reacting to the
environment

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 Responding to the Marketing
Environment
Reactive: Marketing management cannot always control
environmental forces. In many cases, it must settle for simply
watching and reacting to the environment

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 Reference
• Principles of Marketing (17th Edition)
by Philip Kotler; Gary Armstrong

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 The End

Marketing fundamentals 38
 Assignment 2
• What is RFID technology (In your own words)
• Give 3 examples of RFID usage on Marketing

Note: The file(PDF) not more than 1 page

Deadline : Monday 30 - 08 – 2021, 12:00 AM

Note: Your name and index at head of the paper

Marketing fundamentals 39