The Marketing

Environment

Chapter 4
 Objectives
• Know the environmental forces that
affect the company’s ability
to serve its customers.
• Realize how changes in the
demographic and economic
environments affect marketing
decisions.
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 Objectives
• Identify the major trends in the firm’s
natural and technological
environments.
• Know the key changes in the political
and cultural environments.
• Understand how companies can react
to the marketing environment.
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 Case Study
Volkswagen
• “Millennial fever” set • The new VW beetle
the stage to bring back enjoyed cross-
the Beetle generational appeal
• VW’s investment: • Earned many awards
$ 560 million • Beetle now accounts
• Demand quickly for over 25% of
outstripped supply company sales

Discussion: Will the flower-power Microbus succeed next?

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 Key Environments
• Marketing Environment
 The actors and forces that affect a firm’s
ability to build and maintain successful
relationships with customers.
 Aspects of the marketing environment:
 Microenvironment
 Macroenvironment

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 Key Environments
• Marketing Environment
 Microenvironment
The actors close to the company
that affect its ability to serve its
customers

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 Key Environments
• Marketing Environment
 Macroenvironment
The larger social force that affect
the microenvironment

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 The Microenvironment

Actors Affecting a Firm’s Ability

to Serve Customers
• Company • Competitors
• Suppliers • Publics
• Customer • Marketing
Markets Intermediaries
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 The Microenvironment
• The company
 Group such as top management, finance,
research and development (R&D), purchase,
operation and accounting, marketing
 Marketing manager must also work closely with
other company department

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 The Microenvironment
• Suppliers
 They provide the resources needed by the
company to produce its goods and services
 Supply availability
 Supply shortages or delay
 Labor strike
 Cost sales in the short run and damage customer
satisfaction in the long run
 Monitor the price trends

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 The Microenvironment
• Marketing Intermediaries
 Firms that help the company to promote, sell
and distribute its goods to final buyers; they
include
 Resellers
 Physical distribution firm
 Marketing service agency
 Financial intermediaries

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 The Microenvironment
• Customers
 Customer market
 Business market
 Government market
 International market

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 The Microenvironment
• Competitor
 Must provide greater customer value and
satisfaction than its competitors
 Strategic advantage by positioning their offering
strongly against competitor’ offering in the
minds of customers

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 The Microenvironment
• Public
 Any group that has actual or potential interest in
or impact on an organization’s ability to achieve
their objective
 Types of public
 Financial
 Media
 Government
 Citizen-action
 Local
 General
 Internal

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 The Macroenvironment

Macroenvironmental Forces

• Demographic • Technological
• Economic • Political
• Natural • Cultural

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 The Macroenvironment
• Demography
 The study of human population in terms of
size, density, location, age, gender, race,
occupation and other statistics
• Key Demographic Trends
 World population growth
 Changing age structure

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 The Macroenvironment
• Born between 1946 and
Key Generations 1964
• Represent 28% of the
population; earn 50% of
• Baby Boomers personal income
• Many mini-segments exist
• Generation X within the boomer group
• Entering peak earning years
• Generation Y as they mature
• Lucrative market for travel,
entertainment, housing, and
more
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 The Macroenvironment
Key Generations • Born between 1965 and
1976
• First latchkey children
• Baby Boomers • Maintain a cautious
economic outlook
• Generation X • Share new cultural
concerns
• Generation Y • Represent $125 billion in
annual purchasing power
• Will be primary buyers of
most goods by 2010
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 The Macroenvironment
Key Generations • Born between 1977 and
1994
• 72 million strong; almost as
• Baby Boomers large a group as their baby
boomer parents
• Generation X • New products, services, and
media cater to GenY
• Generation Y • Computer, Internet and
digitally saavy
• Challenging target for
marketers
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 The Macroenvironment
• Key Demographic Trends
 Changing household type
 Geographic population shifts
 Better-educated, more white-collar
workforce
 Increasing Diversity

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 The Macroenvironment
• The Economic Environment
 Factor that affects consumer purchasing
power and spending patterns.
 Two types of national economies:
subsistence vs. industrial.
 Consumers now spend carefully and
desire greater value.

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 The Macroenvironment
• Key Economic Trends
 Income distribution is skewed.
 Upper class, middle class, working class and
the underclass.
 Rich are getting richer, the middle class is
shrinking, and the underclass remains poor.
 Consumer spending patterns are changing.

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 The Macroenvironment
• The Natural Environment
 Natural resources that are needed as
inputs by marketers or that are affected
by marketing activities
 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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 The Macroenvironment
• Technological environment
 Forces that create new technologies, creating new
product and market opportunities
• Key Technological Trends
 The technological environment is characterized by
rapid change.
 New technologies create new opportunities and
markets but make old technologies obsolete.
 Leads the world in research and development
spending.

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 The Macroenvironment
• The Political Environment
 Includes laws, governmental agencies, and
pressure groups that impact organizations and
individuals and limit various organizations and
individual in a given society. 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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 The Macroenvironment
• The Cultural Environment
 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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 The Macroenvironment

Cultural values are expressed

via how people view:
• Themselves • Society
• Others • Nature
• Organizations • The Universe

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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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