Principles of Marketing: An Asian

Perspective

Instructor Supplements
Created by Geoffrey da Silva
 The Marketing Environment

3 © 2012 Principles of Marketing: An Asian Perspective

 Chapter 3 Outline

3.1 The Company’s Microenvironment

3.2 The Company’s Macroenvironment
3.3 Responding to the Marketing Environment

4 © 2012 Principles of Marketing: An Asian Perspective

 3.1
The Company’s Microenvironment

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 3.1 The Company’s Microenvironment

Marketing Environment

•A company’s marketing environment consists of the actors and

forces outside marketing that affect marketing management’s ability
to build and maintain successful relationships with target customers.
•The microenvironment consists of the actors close to the company
that affect its ability to service its customers.
•The macroenvironment consists of larger societal forces that affect
the microenvironment.

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 3.1 The Company’s Microenvironment

Actors in the Microenvironment

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 3.1 The Company’s Microenvironment

The Company

Top management

Finance All the interrelated

groups form the
internal environment.
R&D All groups should work
in harmony to provide
Purchasing superior customer
value and relationships
Operations

Accounting

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 3.1 The Company’s Microenvironment

Suppliers
Suppliers provide the
resources needed by the
company to produce its goods
and services.
Marketing managers must
watch supply availability—
supply shortages or delays,
labor strikes, and other events
that can cost sales in the short
run and damage customer
satisfaction in the long run.
Marketing managers also
monitor the price trends of their
key inputs.
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 3.1 The Company’s Microenvironment

Marketing Intermediaries

Marketing intermediaries
help the company to
promote, sell, and distribute
its products to final buyers.

Marketers recognize the

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

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 3.1 The Company’s Microenvironment

Types of Marketing Intermediaries

Physical distribution
Resellers
firms

Marketing services Financial

agencies intermediaries

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 3.1 The Company’s Microenvironment

Marketing Intermediaries

Resellers are distribution channel firms that help the company find
customers or make sales to them. These include wholesalers and
retailers.

Physical distribution firms help the company to stock and move

goods from their points of origin to their destinations.

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 3.1 The Company’s Microenvironment

Carrefour opened its first

hypermarket in Tokyo, Japan,
in 2000. It is a key reseller in
Asia.

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 3.1 The Company’s Microenvironment

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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 3.1 The Company’s Microenvironment

Partnering with marketing intermediaries –

Coca-Cola provides Subway with much more than just
soft drinks. It also pledges powerful marketing
support.

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 3.1 The Company’s Microenvironment

Customers

Consumer markets

Business markets

Reseller markets

Government markets

International markets

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 3.1 The Company’s Microenvironment

Customers

The company may target any or all of these five customer markets.
•Consumer markets: individuals and households that buy goods and
services for personal consumption.

•Business markets: buy goods and services for further processing or

for use in their production process.

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 3.1 The Company’s Microenvironment

Customers

•Reseller markets: buy goods and services to resell at a profit.

•Government markets: made up of government agencies that buy

goods and services to produce public services.

•International markets: buyers in other countries, including

consumers, producers, resellers, and governments.

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 3.1 The Company’s Microenvironment

Competitors

Marketers 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.

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 3.1 The Company’s Microenvironment

Publics = A group that has an actual or

potential interest in or impact on an
organization

Financial publics General public

Media publics Internal publics

Government publics

Citizen-action publics

Local publics
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 3.2
The Company’s Macroenvironment

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 3.2 The Company’s Macroenvironment

Major Forces in the Company’s Macroenvironment

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 3.2 The Company’s Macroenvironment

Demographics

•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.

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 3.2 The Company’s Macroenvironment

The Demographic Environment

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 3.2 The Company’s Macroenvironment

Changing Age Structure of the Population

In general, the three largest age groups are the baby boomers,
Generation X, and Millennials.

The Baby Boomers

Baby boomers are people born post–World War II between 1946 and
1964.
Generation X
This is the generation of people born between 1965 and 1976. They are
called Generation X because they lie in the shadow of the boomers.

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 3.2 The Company’s Macroenvironment

Generation X

Generation Xers like the young

parents shown here tend to value
a better quality of life and family more.

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 3.2 The Company’s Macroenvironment

Generation Y

The Millennials (or Generation Y)

are born between 1977 and 2000.
These are children of the baby boomers.
The echo boom has created a large
teen and young adult market.

The keitai, or mobile phone, is the most common

technological object in modern Japan, used by
many Japanese youths as a daily communicating
device in their lives.

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 3.2 The Company’s Macroenvironment

The Economic Environment

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 3.2 The Company’s Macroenvironment

Changes in Income

•Marketers should pay attention to income distribution as well as

average income.

•At the top are upper-class consumers whose spending patterns are
not affected by current economic events and who are a major market
for luxury goods.

•There is a comfortable middle class that is somewhat careful about

its spending but can still afford the good life some of the time.

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 3.2 The Company’s Macroenvironment

Changes in Income

• The working class must stick close to the basics of food, clothing, and
shelter and must try hard to save.

• Finally, the underclass (persons on welfare and many retirees) must

count their pennies when making even the most basic purchases.

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 3.2 The Company’s Macroenvironment

Targeting at Different Income Segments

Different companies appeal to different income segments. While Daiso targets at the
value-for-money mass market, Levi’s offerings cover a range to target at various
segments.
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 3.2 The Company’s Macroenvironment
Natural environment

Involves the natural resources that are needed as inputs by marketers or

that are affected by marketing activities.

Trends include shortages of raw materials, increased pollution, increased

government intervention and a greater attention to environmentally
sustainable strategies.

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 3.2 The Company’s Macroenvironment

The Natural environment

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 3.2 The Company’s Macroenvironment

The Natural environment

In response to ecological concerns, Levi

Strauss and Co. designed the Levi’s©
Eco jeans made of 100 percent organic
cotton. The product tag is made of 100
percent recycled paper.

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 3.2 The Company’s Macroenvironment

Technological Environment
Technology is the
most dramatic force
in changing the
marketplace. It
creates new
products and
opportunities, and
kills off older
products.

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 3.2 The Company’s Macroenvironment

The Technological Environment

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 3.2 The Company’s Macroenvironment

Political/Legal Environment
Political environment
laws, government
agencies, and pressure
groups that influence or
limit various organizations
and individuals in a given
society

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 3.2 The Company’s Macroenvironment

The Political Environment

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 3.2 The Company’s Macroenvironment

Legislation Regulating Businesses

Business legislation has three main purposes:

a)to protect companies from unfair competition

b)to protect consumers from unfair business practices, and
c)to protect the interests of society from unbridled business behaviour

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 3.2 The Company’s Macroenvironment

Counterfeit Products

The popularity of counterfeit

brands in Asia has proven to be a
growing problem for companies.
Purses and bags like these are
easily available in markets in Asia.

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 3.2 The Company’s Macroenvironment

Legislation Regulating Businesses

Besides counterfeit products, some shops in Asia

also take on international names or similar versions
of them as seen in a Hard Rock Café in India above
and a Giormani store in Hong Kong below.

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 3.2 The Company’s Macroenvironment

Cultural Environment

• Cultural environment consists of institutions and other forces that

affect a society’s basic values, perceptions, and behaviors
• People grow up in a particular society that shapes their basic beliefs and
values.
• They absorb a world view that defines their relationships with others

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 3.2 The Company’s Macroenvironment

The Cultural Environment

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 3.2 The Company’s Macroenvironment

People’s view of nature

Organically grown products

including rice cakes, tea, chilli,
fruit, vegetables, and meat are
slowly becoming popular in Asia

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 3.3
Responding to the Marketing Environment

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 3.3 Responding to the Marketing Environment

Many companies think the marketing environment is an uncontrollable

element to which they have to adapt.

Other companies take an environmental management perspective

to affect the publics and forces in their environment.

Marketing managers should take a proactive rather than reactive

approach to the marketing environment.

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 3.3 Responding to the Marketing Environment

UNCONTROLLABLE PROACTIVE REACTIVE

React and adapt Aggressive Watching and

to forces in the actions to affect reacting to
environment forces in the forces in the
environment environment

47 © 2012 Principles of Marketing: An Asian Perspective

Thank
you