The Marketing

Environment

Chapter 3

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 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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 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 - the actors close to the company
that affect its ability to serve its customers- the
company, suppliers, marketing intermediaries,
customers markets, competitors and publics.
 Macroenvironment - the larger societal forces that
affect the environment- demographic, economic,
natural, technological, political and cultural forces
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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
Five Types of Customer Markets
• Consumer Markets - individuals and household that buy
goods and services for personal consumption.
• Business Markets - buy goods and services for further
processing/ for use in their production process.
• 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 service.
• International Markets - buyers in other countries,
including consumers, producers, resellers and government.

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 The Microenvironment

Types of Publics
• Financial - influence the company’s ability
to obtain funds
• Media - carry news features, editorial
opinions.
• Government - management must take
government developments into account.
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 The Microenvironment

Types of Publics
• Local - include neighborhood residents
and community organizations.
• Internal - include workers, managers,
volunteers and board of directors.
• General
• Citizen Action
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 The Macroenvironment

Macroenvironmental Forces

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

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

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 The Macroenvironment
Key Generations • the 78 million
people born
• Baby Boomers during the baby
boom following
• Generation X
World War II and
• Generation Y lasting until the
early 1960s

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 The Macroenvironment
Key Generations • the 45 million
people between
• Baby Boomers 1965 and 1976
in the birth
• Generation X
death following
• Generation Y the baby boom.

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 The Macroenvironment
Key Generations • the 72 million
children of baby
• Baby Boomers boomers, born
between 1977
• Generation X
and 1994. (echo
• Generation Y boomers)

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 The Macroenvironment
• Key Demographic Trends
 The changing American Family - consist of a
husband, wife and children (sometimes grandparents)
 Geographic shifts in population - This is a period
of great migratory movements between and within countries.
 Better-educated, more white-collar
workforce - The rising number of educated people will
increase the demand for quality products, books, magazines,
travel, personal computers, and Internet services.

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The Macroenvironment
 Increasing Diversity - Countries vary in
their ethnic and racial makeup
Melting pot – diverse groups from many nations
and cultures have melted into a single, more
homogenous whole
“Salad bowl” - in which various groups have
mixed together but have maintained their diversity
by retaining and valuing important ethnic and
cultural differences.

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 The Macroenvironment
• The Economic Environment
 Two types of national economies:
Subsistence economies – they consume
most of their own agricultural and
industrial output.
Industrial economies – constitute rich
markets for much different kind of goods.

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 The Macroenvironment
• Economic Environment
 Changes in income
“Squeezed consumer” – rising incomes in
some segments have come increased
financial burdens.
Value Marketing – the right combination
of product quality and good service at a
fair price.

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 The Macroenvironment
• Economic Environment
 Marketers should pay attention to income distribution as
well as average income.
 a. Upper class consumers – whose spending patterns are
not affected by current economic events and who are a
major market for luxury goods.
 b. middle class – that is comfortable and careful about is
spending but can still afford the good life some of the
time.
 c. working class – must focus to the basics of food,
clothing and shelter and must try hard to save.
 d. under class( persons on welfare and many retirees) –
must count their pennies when making even the most
basic purchases
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 The Macroenvironment
• Economic Environment
 Changing Consumer Spending Patterns
Ernst Engel – who studied how people shifted
their spending as their income rose.
Engel’s Law – according to his law, differences
noted over a century ago by Ernst Engel in how
people shift their spending across food, housing,
transportation, health care and other goods and
services categories as family income rises.
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 The Macroenvironment
• The Natural Environment
 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.

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 The Macroenvironment
• The Political Environment
 Includes laws, governmental
agencies, and pressure groups that
impact organizations and
individuals.

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 The Macroenvironment
• Legislation Regulating Business
 PUBLIC POLICY – develop by government to
guide commerce – sets of laws and regulations that
limit business for the good of society as a whole.
• Reasons for enacting business legislation:
 to protect companies from each other
 to protect consumers from unfair business practices
 to protect interest of society against unrestrained
business behavior

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 The Macroenvironment
• The Cultural Environment
 Is composed of institutions and other

forces that affect a society’s basic

values, perceptions, preferences, and
behaviors.

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 The Macroenvironment
The major cultural values of a society
are expressed :
• People’s view of themselves – people vary in their
emphasis on serving themselves versus serving others.
• People’s view of others – people are going out less with
others and staying home more to enjoy the creature
comforts of home.
• People’s view of organization – people vary in their
attitudes toward corporations, government agencies,
trade unions, universities, and other organizations.

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 The Macroenvironment
The major cultural values of a society
are expressed :
• People’s view of society - people vary in their attitudes toward
their society; patriots defend it, reformers want to change it,
malcontents want to leave it.
• People’s view of nature - people vary in their attitudes toward the
natural world. Some feel ruled by it, others feel in harmony with
it and still others seek to master it.
• People’s view of the universe – finally people vary in their beliefs
about the origin of the universe and their place in it. People have
been moving away from materialism and dog-eat-dog ambition to
seek more permanent values – family, community, earth, faith –
and a more certain grasp of right and wrong.

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 PRESENTORS
• Rosell de Leon
• Jeanie de Ocampo
• Alelie de Torres

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