Chapter 2

Tunis Business School
2022 - 2023
Fundamentals of Marketing
BCOR 210
Chapter 2
The Marketing Environment
Copyright © 2008 Pearson Education Canada 1-1 Principles of Marketing, Seventh Canadian Edition
Learning Goals
1. Describe the environmental forces that affect the
company’s ability to serve its customers
2. Explain how changes in the demographic and
economic environments affect marketing decisions
3. Identify the major trends in the firm’s natural and
technological environments
4. Explain the key changes in the political and cultural
environments
5. Discuss how companies can react to the 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
• Microenvironment
– Includes the actors close to the company ( that conduct
transactions with the company)
• Macroenvironment
– Involves larger societal forces that affect the
microenvironment
Demographic
Company
Cultural Economic
Publics Suppliers
MRK
dept
Competitors Customers
Political Natural
Intermediaries
Technological
Figure 3.1
The Microenvironment
The Company’s Microenvironment
• Company’s Internal Environment- functional areas

such as top management, finance, and manufacturing,
HR, etc.
• Suppliers - provide the resources needed to produce

goods and services and are an important link in the
“value delivery system”.
• Marketing Intermediaries - help the company to

promote, sell, and distribute its goods to final buyers.
The Company’s Microenvironment
• Customers - five types of markets that purchase a

company’s goods and services.
• Competitors - those who serve a target market

with similar products and services against whom a
company must gain strategic advantage.
• Publics - any group that perceives itself having an

interest in a company’s ability to achieve its
objectives.
Types of Customer Markets
Internationa Consumer
l Markets
Markets
Company
Governmen Business
t Markets
Markets
Reseller
Markets
Principles of Marketing, Seventh Canadian Edition 3-9 Copyright © 2008 Pearson Education Canada
Internal i.e. Employees
General Public
Local i.e. Neighborhood Residents
Citizen-Action i.e. Consumer Groups
Government i.e. Regulations
Media i.e. Newspapers
Financial i.e. Banks
Types of Publics
Figure 3.2
The Macroenvironment
Demographic Environment
– The study of human populations in terms of size,
density, location, age, gender, race, occupation,
education, family structure, income, and other
statistics
– World population will exceed 8.1 billion by 2030
• Key Generations • Born between 1946 and 1964
– Baby Boomers
• As more boomers stay in the
– Generation X workforce longer, their
– Generation Y economic impact continues to
influence the economic activity.
– Generation Z Boomers make up the only
population group experiencing
growth in the workforce
• Entering peak earning years as

they mature
Many products are
targeted to Baby
boomers’ growing
health issues and
concerns
• Key Generations • Born between 1965 and 1976
• First generation of latchkey
– Baby Boomers
children
– Generation X • Maintain a cautious economic
– Generation Y outlook
– Generation Z • Skeptical, use internet to
search; they are financially
stable; they care about
security and family
A great example of this was the sprite ads, they played on the fact
that your parents still 'do it', something that no teen really wants to
hear or believe
• Key Generations • Born between 1977 and
1994
– Baby Boomers • Children of the baby
– Generation X boomers represent 20% of
the population
– Generation Y or • Interested in New products,
Millennials. services and feel
– Generation Z comfortable with digital
technology
• Attractive and challenging
target for marketers
New ways of consuming
• Key Generations • Born after 2000
• Utter fluency and comfort
– Baby Boomers with digital technologies
– Generation X • Make up important kids,
– Generation Y or tweens, and teens markets
Millennials. • Hard to pin down, and they
have short attention spans.
– Generation Z
Netflix has created a “Just for Kids” portal

and app, by which children can experience
Netflix on any or all of their screens—TVs,
computers, and tablets or other mobile
devices.
• Geographic Shifts in Population
– Growth in population is not uniform
– Continued movement from rural to urban areas
– Interprovincial moves
– Growth of suburban areas
– People who “telecommute” has increased creating a
booming SOHO (Small Office/Home Office) market.
Economic Environment
• Factors that affect consumer buying power and
spending patterns (i.e : shows what consumers
are purchasing and how much they are likely
to spend)
• Changes in consumer spending
• Changes in Income :Marketers should pay
attention to income distribution as well as
average income (Upper class, middle class,
working class, and underclass)
Economic Environment
• Changing Consumer
Spending Patterns
• Engel’s laws: amount
spent on various
categories changes as
income rises
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
– Green movement
– Focus on environmental sustainability strategies
Car manufacturers
are designing cars
that are more
environmentally
friendly
Technological Environment
• The most dramatic force shaping our destiny
• Rapidly changing force which creates many new
marketing opportunities but also turns many existing
products extinct
• Research and development is a key element
• Governments agencies investigate and ban potentially
unsafe products
Principles of Marketing, Seventh Canadian Edition 3-26 Copyright © 2008 Pearson Education Canada
Practical, Affordable Increased
Products Regulation
Issues in the Technological
Environment
Unlimited Rapid Pace of
Opportunities Change
Technological Environment
As technology
changes, the
consumers have new
needs. This product
helps the consumer
with the problem of
multiple chargers
Political 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
Cultural Environment
• Made up of institutions and other forces that
affect a society’s basic values, perceptions,
preferences and behaviors.
• Persistence of Cultural Values
• Secondary Cultural Values are more open to
change
– People’s views of themselves, others,
organizations, society, nature, and the universe
Cultural Environment
Oneself
Of
Of Of
the Universe Cultural Others
Values s
Nature of a Organization
Of Society Of
Of
Society
Responding to the
Marketing Environment
“There are three kinds of companies: those who
make things happen, those who watch things
happen, and those who wonder what’s
happened.”

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Tunis Business School

The Marketing Environment

• Company’s Internal Environment- functional areas

• Suppliers - provide the resources needed to produce

• Marketing Intermediaries - help the company to

• Customers - five types of markets that purchase a

• Competitors - those who serve a target market

• Publics - any group that perceives itself having an

• Entering peak earning years as

Netflix has created a “Just for Kids” portal

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