Principles of Marketing

Philip Kotler & Gary Armstrong

 Part 1 Defining Marketing and the Marketing Process(Chapter1,2)
Part 2 Understanding the Marketplace and Consumers(Chapter3,4,5,6)
Chapter 3 Part 3 Designing a Customer-Driven Marketing Strategy and Mix(Chapter7,8,9,10,11,12,13,14,15,16,17)
Part 4 Extending Marketing(Chapter18,19,20)

Analyzing the Marketing

Environment
Microsoft: Adapting to the Fast-Changing
Digital Marketing Environment
But as the 21st century continued, technology
changes forced Microsoft to change and adapt
to the move by consumers to digital devices.
Microsoft is moving from being known as a
software company. It developed the Surface
tablet, purchased Nokia to gain access to
smartphone technology, and now offers
numerous digital and cloud services.
Microsoft: Adapting to the Fast-Changing
Digital Marketing Environment
Even by 2000, personal computers were the
engine driving the tech industry. Microsoft was the
dominant company, as its Windows operating
system and Office productivity suite were installed
on nearly all computers sold.
Then, the new digital devices and technologies
drastically changed the high-tech marketing
environment.
Microsoft: Adapting to the Fast-Changing
Digital Marketing Environment
• iPods and smartphones led to e-readers, tablets, and Internet-
connected TVs and game consoles. The problem for Microsoft is
that most of these devices don’t use its old products.
• Microsoft lagged in the digital environment, a position with
which it was not familiar. To recover its leadership position,
Microsoft is working to become a full-line digital devices and
services company that connects people to communication,
productivity, entertainment, and each other.
Chapter 3 Chapter Overview
This chapter shows that marketing does not operate in a vacuum but
rather in a complex and changing environment. Other actors in this
environment—suppliers, intermediaries, customers, competitors,
publics, and others—may work with or against the company. Major
environmental forces—demographic, economic, natural, technological,
political, and cultural—shape marketing opportunities, pose threats,
and affect the company’s ability to build customer relationships. To
develop effective marketing strategies, you must first understand the
environment in which marketing operates.
Chapter 3 Learning Contents

Section 1 The Company’s Micro-environment

Section 2 The Company’s Macro-environment

Section 3 Responding to the Marketing Environment

Chapter 3 Chapter Overview

The actors and forces outside marketing

Marketing
environment that affect marketing management’s
ability to build and maintain successful
relationships with customers
Chapter 3 Chapter Overview
This is an intense chapter, and it presents a lot of
information that might make some students’ heads
swim.
• If it hasn’t happened before, this is where students
really begin to get the picture that marketing
managers need to be highly analytical people.
• It helps to present the in-depth discussion of
current macro trends as something that needs to be
understood, but not memorized.
Chapter 3 Chapter Objectives
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. Identify the key changes in the political and cultural
environments.
5. Discuss how companies can react to the marketing environment.
Section 1 The Company’s Micro-environment

Micro-environment

The actors close to the company that affect its ability to serve
its customers, including the company, suppliers, marketing
intermediaries, customer markets, competitors, and publics

Marketing management’s job is to build relationships with

customers by creating customer value and satisfaction.
Section 1 The Company’s Micro-environment
3.1.1 The Company
3.1.2 Suppliers
3.1.3 Marketing Intermediaries
3.1.4 Competitors
3.1.5 Publics
3.1.6 Customers
3.1.1 The Company
3.1.2 Suppliers
3.1.3 Marketing Intermediaries
3.1.4 Competitors
3.1.5 Publics
3.1.6 Customers
Chapter 3 3.1.1 The Company

• Top management
• Finance All the interrelated groups form
• R&D the internal environment. All
groups must work in harmony
• Purchasing
to provide superior customer
• Operations value and relationships.
• Accounting
Chapter 3 3.1.1 The Company

• Top management
• Finance
Top management sets the
• R&D
• Purchasing company’s mission, objectives,
• Operations broad strategies and policies.
• Accounting
Chapter 3 3.1.1 The Company

• Top management Marketing managers make

• Finance decisions within the strategies and
• R&D plans made by top management.
• Purchasing Marketing managers must work
• Operations closely with the other company
• Accounting departments.
3.1.1 The Company
3.1.2 Suppliers
3.1.3 Marketing Intermediaries
3.1.4 Competitors
3.1.5 Publics
3.1.6 Customers
Chapter 3 3.1.2 Suppliers

Suppliers form an important The company must treat

link in the company’s overall suppliers as partners to
customer value delivery system. provide customer value.

Suppliers provide the supply shortages or delays, labor

resources needed by the strikes, and other events can cost
company to produce its sales in the short run and damage
goods and services. customer satisfaction in the long run.
3.1.1 The Company
3.1.2 Suppliers
3.1.3 Marketing Intermediaries
3.1.4 Competitors
3.1.5 Publics
3.1.6 Customers
Chapter 2 3.1.3 Marketing Intermediaries

Marketing
intermediaries

Firms that help the company to

promote, sell, and distribute its
products to final buyers.
Chapter 2 3.1.3 Marketing Intermediaries

Physical
Resellers distributi
Marketing
on intermediaries
firms
Marketing Firms that help the company to
Financial
services
intermediar promote, sell, and distribute its
agencies products to final buyers.
ies
Chapter 2 3.1.3 Marketing Intermediaries

Physical
Resellers distributi Resellers are distribution channel
on
firms firms that help the company find
customers or make sales to them.
Marketing These include wholesalers and
Financial
services
intermediar retailers.
agencies
ies
Chapter 2 3.1.3 Marketing Intermediaries

Physical
Resellers distributi Physical distribution firms help
on
firms the company to stock and move
goods from their points of origin
Marketing to their destinations.
Financial
services
intermediar
agencies
ies
Chapter 2 3.1.3 Marketing Intermediaries

Physical Marketing services agencies are

Resellers distributi the marketing research firms,
on advertising agencies, media firms,
firms and marketing consulting firms
Marketing that help the company target and
Financial
services promote its products to the right
intermediar
agencies markets.
ies
Chapter 2 3.1.3 Marketing Intermediaries

Physical Financial intermediaries include

Resellers distributi banks, credit companies,
on insurance companies, and other
firms businesses that help finance
Marketing transactions or insure against the
Financial
services risks associated with the buying
intermediar
agencies and selling of goods.
ies
Chapter 2 3.1.3 Marketing Intermediaries

Physical
Resellers distributi Today’s marketers recognize the
on importance of working with their
firms intermediaries as partners rather
Marketing than simply as channels through
Financial which they sell their products.
services
intermediar
agencies
ies
3.1.1 The Company
3.1.2 Suppliers
3.1.3 Marketing Intermediaries
3.1.4 Competitors
3.1.5 Publics
3.1.6 Customers
Chapter 2 3.1.4 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.
3.1.1 The Company
3.1.2 Suppliers
3.1.3 Marketing Intermediaries
3.1.4 Competitors
3.1.5 Publics
3.1.6 Customers
Chapter 3 3.1.5 Publics

- Financial publics
A public is any group that has an
- Media publics
actual or potential interest in or
- Government publics
impact on an organization’s ability to
achieve its objectives. - Citizen-action publics
- Local publics
- General public
- Internal publics
Chapter 3 3.1.5 Publics

• Financial publics influence the company’s ability to obtain funds.

• Media publics carry news, features, and editorial opinion.
• Government publics. Management must take government
developments into account.
• Citizen-action publics. A company’s marketing decisions may be
questioned by consumer organizations, environmental groups,
and others.
Chapter 3 3.1.5 Publics

• Local publics include neighborhood residents and community

organizations.
• General public The general public’s image of the company that
affects its buying.
• Internal publics include workers, managers, volunteers, and the
board of directors.
3.1.1 The Company
3.1.2 Suppliers
3.1.3 Marketing Intermediaries
3.1.4 Competitors
3.1.5 Publics
3.1.6 Customers
Chapter 3 3.1.6 Customers

Consumer markets Business markets Reseller markets

individuals and households buy goods and services for buy goods and services
that buy goods and services further processing or for use to resell at a profit.
for personal consumption. in their production process.

Government markets International markets

composed of government agencies buyers in other countries, including
that buy goods and services to consumers, producers, resellers,
produce public services. and governments.
Review Learning Objective 1:
Describe the environmental for ces that
affect the company’s ability to serve its
customers.
Section 2 The Company’s Macro-environment
Section 2 The Company’s Macro-environment

Macro-environment

The larger societal forces that affect the micro-

environment: demographic, economic, natural,
technological, political, and cultural forces.
3.2.1 Demographic Environment
3.2.2 Economic Environment
3.2.3 Natural Environment
3.2.4 Technological Environment
3.2.5 The Political and Social
3.2.6 Environment
The Cultural Environment
3.2.1 Demographic Environment
3.2.2 Economic Environment
3.2.3 Natural Environment
3.2.4 Technological Environment
3.2.5 The Political and Social
3.2.6 Environment
The Cultural Environment
Chapter 3 3.2.1 Demographic Environment

Demography is the study of human populations in

terms of size, density kepadatan, 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 pergeseran, educational
characteristics, and population diversity.
Chapter 3 3.2.1 Demographic Environment

01 Changing Age Structure of the Population

02 The changing American Family and Changes

in the Workforce

03 Geographic Shifts in Population

05 Increasing Diversity
Chapter 3 3.2.1 Demographic Environment
Changing Age Structure of the Population

• Generation X includes people born

between 1965 and 1976
- High parental divorce rates
- Cautious economic outlook
- Less materialistic
- Family comes first
- Lag behind on retirement savings
Chapter 3 3.2.1 Demographic Environment
The changing American Family
and Changes in the Workforce

The “traditional household” consists of a husband,

wife, and children (and sometimes grandparents).

• Married couples with children make up only

19 percent of the households;
In the United States: • Married couples without children make up 28
percent;
• Single parents comprise 18 percent.
• Nonfamily households make up 34 percent.
Chapter 3 3.2.1 Demographic Environment
The changing American Family
and Changes in the Workforce
More people are:
• Divorcing or separating
Four Generations Living Together
• Choosing not to marry
A nuclear family
• Choosing to marry later DINK
• Marrying without intending to have children Non-marriage cohabitation
• Increased number of working women Indoorsman
• Stay-at-home dads
Chapter 3 3.2.1 Demographic Environment
The changing American Family
and Changes in the Workforce

A Better-Educated, More White-Collar,

More Professional Population

Changes in the Workforce

- More educated
- More white collar
Chapter 3 3.2.1 Demographic Environment
Geographic Shifts in Population

• Growth in U.S. West and South and

decline in Midwest and Northeast
• Moving from rural to metropolitan areas
• Changes in where people work
• Telecommuting
• Home office
• Divorcing or separating
Chapter 3 3.2.1 Demographic Environment
Geographic Shifts in Population

About 12 percent of all U.S. residents

move each year. The U.S. population
has shifted toward the Sunbelt states.
Americans have been moving from
rural to metropolitan areas.

Such population shifts interest marketers

because people in different regions buy
differently.
Chapter 3 3.2.1 Demographic Environment
The Increasing Diversity

• International
• National
• Ethnicity
• Gay and lesbian
• Disabled
Chapter 3 3.2.1 Demographic Environment
The Increasing Diversity

• International
• National
• Ethnicity
• Gay and lesbian
• Disabled
Chapter 3 3.2.1 Demographic Environment
The Increasing Diversity

• International
• National
• Ethnicity
• Gay and lesbian
• Disabled
Chapter 3 3.2.1 Demographic Environment
The Increasing Diversity

• International
• National Pink Economy
• Ethnicity FMCG
Social Networking App
• Gay and lesbian Tourism product
Financing product
• Disabled Film and video
Chapter 3 3.2.1 Demographic Environment
The Increasing Diversity

• International
• National
• Ethnicity
• Gay and lesbian
• Disabled
Chapter 3 3.2.1 Demographic Environment
The Increasing Diversity

• International
Hearing aids
• National
• Ethnicity
• Gay and lesbian
• Disabled
3.2.1 Demographic Environment
3.2.2 Economic Environment
3.2.3 Natural Environment
3.2.4 Technological Environment
3.2.5 The Political and Social
3.2.6 Environment
The Cultural Environment
Chapter 3 3.2.2 Economic Environment

Economic environment consists of factors that affect

consumer purchasing power and spending patterns

consumer
purchasing power • Industrial economies are richer markets
• Subsistence economies consume most of
their own agriculture and industrial output
consumer
In between are developing countries, which can offer
spending patterns outstanding marketing opportunities.
Chapter 3 3.2.2 Economic Environment

01
Changes in income

02
Changes in Consumer Spending Patterns
Chapter 3 3.2.2 Economic Environment
Changes in income

Value marketing means just the right

combination of product quality and
service at a fair price.

Income distribution in the United States is highly Skewed miring. The

rich have grown richer, the middle class has shrunk, and the poor
have remained poor.
This uneven tidak merata distribution of income has created a tiered
berjenjang market.
Chapter 3 3.2.2 Economic Environment
Changes in Consumer Spending Patterns

Ernst Engel—Engel’s Law

Engel Index

As income rises:
The percentage spent on food declines
The percentage spent on housing remains constant
The percentage spent on savings increases
Review Learning Objective 2:
Explain how changes in the demographic
and economic environments aff ect
marketing decisions.
3.2.1 Demographic Environment
3.2.2 Economic Environment
3.2.3 Natural Environment
3.2.4 Technological Environment
3.2.5 The Political and Social
3.2.6 Environment
The Cultural Environment
Chapter 3 3.2.3 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
- Increase government intervention
- Environmentally sustainable berkelanjutan
strategies
3.2.1 Demographic Environment
3.2.2 Economic Environment
3.2.3 Natural Environment
3.2.4 Technological Environment
3.2.5 The Political and Social
3.2.6 Environment
The Cultural Environment
Chapter 3 3.2.4 Technological Environment

The technological environment is perhaps the most

dramatic force now shaping our destiny. These new
technologies can offer exciting opportunities for marketers.

Technology has released such

wonders as antibiotics, robotic
surgery, miniaturized electronics,
smartphones, and the Internet.
Chapter 3 3.2.4 Technological Environment
Review Learning Objective 3:
Identify the major trends in the firm’s
natural and technological envir onments.
3.2.1 Demographic Environment
3.2.2 Economic Environment
3.2.3 Natural Environment
3.2.4 Technological Environment
3.2.5 The Political and Social
3.2.6 Environment
The Cultural Environment
Chapter 3 3.2.5 The Political and Social Environment

Marketing decisions are strongly affected by developments

in the political environment. This consists of laws,
government agencies, and various pressure groups.

Legislation Regulating Business

Increased Emphasis on Ethics and

Socially Responsible Actions
Chapter 3 3.2.5 The Political and Social Environment
Legislation Regulating Business

• Governments develop public • Increasing Legislation. Legislation

policy to guide commerce. affecting business around the world
has increased steadily terus over the years.

Business legislation has been enacted Diberlakukan for a number of reasons:

a. To protect companies from each other.
b. To protect consumers from unfair business practices.
c. To protect the interests of society against unrestrained Tak terkendali business
behavior.
Chapter 3 3.2.5 The Political and Social Environment
Increased Emphasis on Ethics and
Socially Responsible Actions

• Socially Responsible Behavior. Enlightened Tercerahkan companies

encourage their managers to “do the right thing.” The boom in Internet
marketing has created a new set of social and ethical issues.

• Cause-Related Marketing. To exercise their social responsibility and build

more positive images, many companies are now linking themselves to
worthwhile causes.
3.2.1 Demographic Environment
3.2.2 Economic Environment
3.2.3 Natural Environment
3.2.4 Technological Environment
3.2.5 The Political and Social
3.2.6 Environment
The Cultural Environment
Chapter 3 3.2.6 The Cultural Environment

The cultural environment consists of institutions and

other forces that affect a society’s basic values,
perceptions, preferences, and behaviors.

01
Persistence of Cultural Values

02
Shifts in Secondary Cultural Values
Chapter 3 3.2.6 The Cultural Environment
Persistence of Cultural Values

Core beliefs and values are passed on from parents to

children and are reinforced by schools, churches,
business, and government.

Secondary beliefs and values are more open to change.

Chapter 3 3.2.6 The Cultural Environment
Shifts in Secondary Cultural Values

People’s Views People vary in their emphasis on serving themselves versus serving
of Themselves others.
People’s Views In past decades, observers have noted several shifts in people’s
of Others attitudes toward others. Trend trackers see a new wave of “cocooning.”
People’s Views By and large, there has been a decline of loyalty toward companies.
of Organizations
People’s Views People vary in their attitudes toward society. This influences their
of Society consumption patterns and marketplace attitudes.
People’s Views Recently, people have recognized that nature is finite and fragile,
of Nature and that it can be destroyed by human activities.
Review Learning Objective 4:
Identify the key changes in the
political and cultural environments.
Section 3 Responding to the Marketing Environment

Marketing strategy is the marketing logic

by which the company hopes to achieve
these profitable relationships.
Chapter 3 3.3 Responding to the Marketing Environment

Many companies think the marketing environment is an

uncontrollable element to which they must react and adapt.

Other companies take a proactive Stance toward the

marketing environment. sikap

Rather than assuming that strategic options are bounded by the current
environment, these firms develop strategies to change the environment.
By taking action, companies can often overcome seemingly Tampaknya
uncontrollable environmental events.
3.3.1 Reviewing Objectives and Key Terms
3.3.2 Key Terms
3.3.3 Discussing & Applying the Concepts
3.3.4 Focus on Technology
3.3.5 Focus on Ethics
3.3.6 Marketing by the Numbers
Review Learning Objective 5:
Discuss how companies can react to
the marketing environment.
Company Case Notes
Sony: Battling the Marketing Environment’s “Perfect Storm”

Not so long ago, Sony was the market leader in consumer

electronics. Everyone owned at least one and probably
multiple Sony devices.

But the market changed, and Sony didn’t. Clinging to its rigid
engineering culture, Sony was passed by more nimble and
dynamic competitors.
Company Case Notes
Sony: Battling the Marketing Environment’s “Perfect Storm”

Various factors in the microenvironment and macro-

environment changed and caused changes. This even included
a string of natural disasters that set Sony back even more.

This case examines Sony’s struggles over the past decade and
leaves its future in question.
Company Case Notes
Sony: Battling the Marketing Environment’s “Perfect Storm”

What micro-environmental factors have affected

Sony’s performance since 2000?
• The Company – Sony didn’t lose the capabilities that made it great. But its
rigid engineering culture did not adjust to changing times. Internal conflict
from the different divisions.
• Competitors – Sony was hit by many new competitors that were younger,
more nimble and flexible, and better in tune with current trends. These
competitors unveiled a new generation of devices that Sony initially could
not match (iPod, iPhone, iPad, Kindle, etc.).
• Customers – Bottom line is, because of many things that were changing in
the macro-environment, Sony’s customers were wanting different things
than Sony was providing. They didn’t want physical media anymore. They
wanted digital and connected media.
Company Case Notes
Sony: Battling the Marketing Environment’s “Perfect Storm”

What macro-environmental factors have affected

Sony’s performance during that period?
• Economic – The Great Recession.
• Natural – Tsunami in Japan, floods in Thailand, riots and fires in Europe,
shuttering Sony plants as well as supplier plants.
• Technological – Major technological developments came forward from
competitors. Sony was far too slow to react. Also, the hacking attack on the
Sony Playstation network was a setback.
• Political – This include regulation and legal issues. Although not mentioned
much in this case, Sony spent more time in the early 2000s trying to regulate
and litigate its way into protecting its music production business than it did
trying to figure out how to give customers what they wanted.
• Cultural – cultural values of convenience, virtual experiences, constant
connectedness, and others replaced values on high-fidelity. Also, music-
buying, listening, and sharing patterns changed dramatically.
Company Case Notes
Sony: Battling the Marketing Environment’s “Perfect Storm”

The teaching objectives for this case:

1. Identify how micro-environmental factors can affect a strong,

established business.
2. Identify how macron-environmental factors can affect a strong,
established business.
3. Identify strategic issues in responding to environmental factors.
4. Formulate recommendations for a company in crisis.
Marketing Ethics: Television Isn’t What It Used to Be
Does a company “publicly perform” a copyrighted television
program if it is distributed to paid subscribers over the
Internet? That is the issue behind the American Broadcasting
Companies, Inc. v. Aereo, Inc.

lawsuit before the Supreme Court. It is illegal to

retransmit copyrighted television programs in a
“public performance” without paying
retransmission fees to the copyright holder.
Marketing Ethics: Television Isn’t What It Used to Be
With the help of technology, however, Aereo seems to have found a way to
circumvent federal copyright laws and not pay retransmission fees to
broadcasters. Each customer has a dime-sized antenna that provides a
“private performance,” thus allowing Aereo to avoid having to pay
retransmission fees to deliver the programming to customers.

Viewers in New York, Denver, Boston, Atlanta, Miami, and other major
markets can ditch their high-cost cable and satellite television service and
receive twenty-four channels and DVR space to record shows for as little as
$8–$12 per month.
Marketing Ethics: Television Isn’t What It Used to Be
Moreover, Aereo may pick up low-power stations not carried by cable and
satellite providers, letting advertisers expose their ads to “eyeballs” they
wouldn’t normally get. This also helps the smaller broadcasters because cable
and satellite providers do not usually carry these stations. A Utah judge didn’t
see it that way, however, and ruled that Aereo’s business model is
“indistinguishable from that of a cable company.”

The case has gone all the way to the Supreme Court. One expert says the case
is really about old versus new technology, about “rabbit ears meets the cloud.”
Rabbit ears refers to the old television antennas that received broadcast signals
over the air for free (once the only way to receive TV programming).