Because learning changes everything.

Topic 2
The Marketing Environment

Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
 Learning Objectives

Learning Objective 2.1 Outline how customers, the

company, competitors, corporate partners, and the
physical environment affect marketing strategy.
Learning Objective 2.2 Explain why marketers must
consider their macroenvironment when they make
decisions.
Learning Objective 2.3 Identify various social trends that
impact marketing.
Learning Objective 2.4 Examine the technological
advances that are influencing marketers.

© McGraw Hill LLC 2

 Exhibit 5.2: Understanding the Marketing
Environment

Access the text alternative for slide images.

© McGraw Hill LLC 3

 Exhibit 5.2: The Immediate Environment

© McGraw Hill LLC 4

 Company Capabilities

Successful marketing
firms focus on
satisfying customer
needs that match their
core competencies. 

Corning initially made its name by producing the glass enclosure to encase
Thomas Edison’s lightbulb. But by successfully leveraging its core
competency in glass manufacturing while also recognizing marketplace
trends toward mobile devices, Corning shifted its focus.

© McGraw Hill LLC Somchai Som/Shutterstock 5

 Competitors

Know their strengths,

weaknesses, and likely
reactions to firm’s
marketing activities.

© McGraw Hill LLC 10'000 Hours/Getty Images 6

 Corporate Partners

Parties that work

with the focal firm.

Nau works with

manufacturers to
develop clothing
from sustainable
materials.
Nau works with its corporate partners to develop socially
responsible outdoor (left) and urban (right) apparel.

© McGraw Hill LLC (Left): Philipp Nemenz/Getty Images; (right): PeopleImages/Getty Images 7
 Physical Environment

Sustainable development:
Includes land, water, air, and
living organisms.
Products and services are
influenced by how they are
used in the physical
environment, and in turn they
can also influence the physical
environment.
Examples:
• Energy Trends.
• Greener Practices and
Green Marketing.
• Greenwashing.

© McGraw Hill LLC Caia Image / Image Source 8

 17 Global Goals of Sustainable Development

EXHIBIT 5.3 Global Goals of Sustainable Development

From the United Nations, “Sustainable Development Goals: 17 Goals to Transform Our World,” Last Modified March 18, 2019. The content of this
publication has not been approved by the United Nations and does not reflect the views of the United Nations or its officials or Member States.
https://www.un.org/sustainabledevelopment/news/communications-material/.

Access the text alternative for slide images.

© McGraw Hill LLC 9

 Macroenvironmental Factors
EXHIBIT 5.4 The Macroenvironment

© McGraw Hill LLC 10

 Culture
Shared meanings, beliefs, morals, values, and customs of a group of
people transmitted by words, literature, and institutions.
Country Culture
• Subtler aspects can be difficult to navigate.
• Sometimes best answer is to establish universal appeal within specific
identities of country culture.
Regional Culture
• For national and global chains, particularly important to cater to
regional preferences.
• McDonald’s – slightly different variations of staple menu.

© McGraw Hill LLC 11

 Demographics

Characteristics of the human

population and segments,
especially those used to
identify consumer markets.

Provides an easily
understood snapshot of the
typical consumer in a specific
target market.

Marketers use data about

consumers to target offers.
census.gov

© McGraw Hill LLC Shutterstock / astel design 12

 Exhibit 5.5: Generational Cohorts

Generational Baby
cohort Gen α Gen Z Gen Y Gen X Boomers
Table divided into six columns summarizes generational cohorts. The
2010– 1997– 1981– 1965– 1946–
Range of birth years
column headers are marked from2009
left to right1996
as: Generational
2025 1980 cohort,
1964
generation alpha, generation Z, generation Y, generation X, and baby
boomers.
Age in 2020 0–10 11–23 24–39 40–55 56–74

Millennials and the Rise of the 'Experience Economy'

Access the text alternative for slide images.

© McGraw Hill LLC 13

 Income

Purchasing power is tied

to income.

Marketing opportunities
exist across the broad
range of income
distribution.
SC Johnson targets the bottom of the
income pyramid by selling pest control
products in Ghana.

© McGraw Hill LLC NNehring/iStock/Getty Images 14

 Education

Education is related to income, which determines

spending power.

© McGraw Hill LLC Monkey Business Images/Shutterstock 15

 Gender

Male/female roles have

been shifting.

Marketing has changed

to reflect these shifts.
• Firms may need to be
careful about gender
neutrality in
positioning their
products.

© McGraw Hill LLC Gorodenkoff/Shutterstock 16

 Ethnicity

Approximately 80% of
all population growth in
the next 20 years is
expected to come from
minority communities

By 2030 the Hispanic

population in the U.S. is
expected to reach more
than 72 million.

© McGraw Hill LLC Image Source/Getty Images 17

 Social Trends

Sustainability

Health and Wellness

Efficient Utilization and

Distribution of Food

© McGraw Hill LLC 18

 Sustainability

UN Sustainable
Development Goals
focus on social issues
for basic needs.

Certifications from
various agencies may
be important.

© McGraw Hill LLC pixelliebe/Shutterstock 19

 Health and Wellness

Child and adult obesity

New markets focused

on healthy living

Mobile apps that

support health and
wellness

© McGraw Hill LLC Shutterstock/Rawpixel.com 20

 Efficient Utilization and Distribution of Food

Diet-related Products

Reducing Hunger

Reducing Food Waste

© McGraw Hill LLC Steve Cukrov / Alamy 21

 Technological Advances

Technology impacts every aspect of marketing:

• New products and services.
• New forms of communication.
• New retail channels.

Growing importance of mobile devices

New cutting-edge technology:

• Artificial Intelligence.
• Robotics.
• Internet of Things (IoT).
• Privacy Concerns.
Pepper the robot is used in restaurants, hotels, and coffee shops.

© McGraw Hill LLC Dani Metaz/Shutterstock 22

 Economic Situation

Affects the way consumers buy products and services and

spend money.

Monitor the economic situation in home country and abroad.

Major factors to monitor:

• Inflation.
• Foreign currency fluctuations.
• Interest rates.

Customers formed in line to bank counter

Consumer Confidence Index
© McGraw Hill LLC Hiya Images/Corbis/Getty Images 23
 Political/Legal Environment 1

Comprises political parties,

government organizations,
and legislation and laws.

Firms must understand and

comply with
legislation regarding:
• Fair competition.
• Consumer protection.
• Industry-specific regulation.

© McGraw Hill LLC olegdudko © 123RF.com 24

 Responding to the Environment

Implement strategies
that respond to multiple
environmental forces.

Marketers that succeed

are the ones that
respond quickly,
accurately, and
sensitively to
consumers.

© McGraw Hill LLC t_kimura/Getty Images 25

 End of Main Content

Because learning changes everything. ®

www.mheducation.com

Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.