Chapter outline

• 2.1. Definition and classification of marketing environment

• 2.1.1. Definition
• 2.1.2. Classification of marketing environment
• 2.1.3. Relationships among environmental factors
• 2.2. Microenvironment

Chapter 2 •
•
2.2.1. The Company
2.2.2. Suppliers
• 2.2.3. Marketing intermediaries
• 2.2.4. Competitors
• 2.2.5. Publics
Marketing Environment • 2.2.6. Customers
• 2.3. Macroenvironment
• 2.3.1. Political and Legal environment
• 2.3.2. Economic environment
• 2.3.3. Socio-cultural environment
• 2.3.4. Natural environment
• 2.3.5. Demographic environment
• 2.3.6. Technological environment

2.1.1. Definition of marketing 2.1.2. Classification of 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.
environment
• The 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.

2.1.2. Classification of marketing 2.2. Microenvironment

environment
• The macroenvironment consists of the larger
societal forces that affect the
microenvironment.
– Demographic
– Economic
– Natural
– Technological
• 2.2.1. The company • 2.2.4. Competitors
– Political
• 2.2.2. Suppliers • 2.2.5. Publics
– Cultural • 2.2.3. Marketing intermediaries • 2.2.6. Customers

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 2.2.1. The Company 2.2.2. Suppliers
Internal environment • Provide the resources to produce goods and
includes: services
• Top management • Treated as partners to provide customer value
• Finance
• R&D
• Purchasing
• Operations
• Accounting

2.2.3. Marketing Intermediaries
• Help the company to promote, sell, and
distribute its products to final buyers
• Include:
– Resellers
– Physical distribution firms
– Marketing services agencies
– Financial intermediaries
2.2.4. Competitors
• Firms must gain strategic advantage by
positioning their offerings against competitors’
offerings.
• Each firm should consider its own size and
industry position compared to those of its
competitors.

2.2.5. Publics 2.2.6. Customers

• Consumer markets consist of individuals and
• Any group that has an actual or
households that buy goods and services for
potential interest in or impact on an personal consumption.
organization’s ability to achieve its
• Business markets buy goods and services for
objectives:
further processing or for use in their production
process.
– Financial publics – Local publics
– Media publics – General public
– Government publics
– Internal publics
– Citizen-action publics

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 2.2.6. Customers
• Reseller markets buy goods and services
to resell at a profit.
• Government markets buy goods and
services to produce public services or
transfer goods and services to others who
need them.
• International markets consist of buyers in
other countries including consumers,
producers, resellers, and governments.
2.3.1. Political Environment
• Political environment consists of laws,
government agencies, and pressure groups
that influence or limit various organizations
and individuals in a given society.
2.3.2. Economic Environment
• Economic environment consists of
factors that affect consumer purchasing
power and spending patterns.
– Subsistence economies consume most of
their own agriculture and industrial output.
– Industrial economies are richer markets.
2.3. Macroenvironment
• 2.3.1. Political and Legal environment
• 2.3.2. Economic environment
• 2.3.3. Socio-Cultural environment
• 2.3.4. Natural environment
• 2.3.5. Demographic environment
• 2.3.6. Technological environment
2.3.1. Political Environment
• Legislation regulating business
– Public policy to guide commerce—sets of
laws and regulations that limit business for
the good of society at large
• Increasing legislation to:
– Protect companies
– Protect consumers
– Protect the interests of society
2.3.2. Economic Environment
Changes in Income
• Income distribution
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 2.3.2. Economic Environment
Changes in Consumer Spending Patterns
Ernst Engel—Engel’s Law
2.3.3. Cultural Environment
Persistence of Cultural Values
• Core beliefs and values have a high
degree of persistence
• Secondary beliefs and values are more
open to change.
2.3.5. 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.
2.3.3. Cultural Environment
• The cultural environment consists of
institutions and other forces that affect a
society’s basic values, perceptions, and
behaviors.
2.3.4. 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
• Increased government intervention
• Environmentally sustainable strategies
• Green marketing
2.3.5. Demographic Environment
Changing Age Structure of the Population
• Baby boomers include people born
between
1946 and 1964
– Includes most affluent Asians
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2.3.5. Demographic Environment 2.3.5. Demographic Environment
Changing Age Structure of the Population
Changing Age Structure of the Population
• Generation X includes people born between • Generation Y includes people born
1965 and 1976. They tend to: between 1977 and 1994.
– Have high divorce rates – The Internet generation
– Are concerned about the environment
– Respond to socially responsible companies
– Are less materialistic
– Emphasize quality of life
– Consumer organizations, environment groups,
and minority groups

2.3.5. Demographic Environment 2.3.5. Demographic Environment

The Changing Asian Family
Geographic Shifts in Population
More people are: • Trends include:
• Divorcing or separating – Migratory movements between
• Choosing not to marry and within countries
• Choosing to marry later – Moving from rural to metropolitan
• Marrying without intending to have children areas
• Higher divorce rates – Changes in where people work
• Increased number of working women • Telecommuting
• More stay-at-home dads • Home office

2.3.5. Demographic Environment 2.3.5. Demographic Environment

Changes in the Workforce Increasing Diversity
Trends include: • Markets are becoming more diverse
• More educated – International
• More white collar – National
• More professional • Trends include:
– Ethnicity
– Gay and lesbian
– Disabled

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2.3.6. Technological Environment Responding to the Marketing
Environment
• Most dramatic force in changing the marketplace
with many positive and negative effects Views on Responding
• Rapid change • Uncontrollable
• Provides new markets and new opportunities – Reacting and adapting to forces in the
– Internet environment
– Medicine
• Proactive
– Miniaturization
– Taking aggressive actions to affect forces
– Weapons
in the environment
– Credit cards
– Communication • Reactive
– Watching and reacting to forces in the
environment