Markketing Environment

7/24/2019 Markketing Environment

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MarketingEnvironmentMicro environment


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Marketing environment

A companys marketing environmentconsists of all the actors and forcesoutside marketing that aect

marketings managements ability tobuild and maintain successfulrelationships with target customers

Environment oers both opportunities

and threats. Marketing intelligence and research is

used to collect information about theenvironment


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Marketing environment consists of:

Microenvironment: actors closeto the company that aect itsability to serve its customers,

Macro environment: largersocietal forces that aect themicroenvironment. onsidered to

be beyond the control of theorgani!ation.


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Microenvironment


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Actors in theMicroenvironment


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"he company

#n designing marketing plans, marketing managementtakes other company groups into account such as topmanagement, fnance, research and development(R&D), purchasing, manuacturing , andaccounting.

"op management set the company$s mission, ob%ectives,broad strategies and policies

Marketing managers make decisions within the broaderstrategies made by to management

Marketing has to work with the other departments to tryand understand customer needs and create customervalue

All these interrelated groups form the internalenvironment


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&uppliers

Are an important link in the companysoverall customer value delivery system

"hey provide the resources needed by thecompany to produce its goods and services.

&upplier problems can seriously aectmarketing.

Marketing managers must watch supply

availability and costsHow can supplier problems afectmarketing ?


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Marketing intermediaries

'elp the company to promote, sell anddistribute its goods to (nal buyers

"hey include resellers, physicaldistribution (rms, marketing servicesagencies, and (nancial intermediaries

)esellers are distribution channel (rmsthat help the company (nd customers

or make sales to them. "hese includewholesalers and retailers, who buy andresell merchandise.

*hysical distribution (rms help the

company stock and move goods from


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Marketing services (rms are themarketing research (rms , advertising

agencies, media (rms and marketingconsulting (rms that help the companytarget and promote its product to theright markets

+inancial intermediaries include banks,credit companies, insurance companies,and other businesses that help (nancetransactions or insure against the risk

associated with buying and selling goods

ike suppliers, marketing intermediariesform an important component of thecompanys overall value delivery system


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ustomers ustomers are the most important actors

in the companys micro environment. "heaim of the whole value delivery system isto serve target customers and createstrong relationships with them .

"here are (ve types of customer marketsand a company can choose to target one orall of these markets, these include:

onsumer markets -usiness markets

)eseller markets

overnment markets


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Customers

Customer marketsconsist ofindividuals and households that buygoods and services for personalconsumption

Business marketsbuy goods andservices for further processing or foruse in their production process

Reseller markets buy goods andservices to resell at a pro(t


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Customers

Government marketsbuy goods andservices to produce public services ortransfer goods and services to otherswho need them

International marketsconsist ofbuyers in other countries includingconsumers, producers, resellers, andgovernments


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ompetitors

"hose who serve a target market withproducts and services that are viewed byconsumers as being reasonablesubstitutes

"he marketing concept states that to besuccessful, a company must providegreater customer value and satisfactionthan its competitors do.

"hey must gain strategic advantage bypositioning their oerings stronglyagainst competitors oerings in theminds of consumers


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*ublics

A public is any group that has an actual orpotential interest in or impact on anorganizations ability to achieve itsobjectives


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Publics

Financial publicsin/uence thecompanys ability to obtain funds0banks, investment houses, andstockholders

Meia publicscarry news, features, andeditorial opinion0newspapers,maga!ines, and radio and television

stationsGovernment publicsin/uence product

safety and truth in advertising


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Publics

Citizen!action publicsincludeconsumer organi!ations, environmentgroups, and minority groups

"ocal publicsinclude neighborhood

residents and communityorgani!ations

General publicsin/uence thecompanys public image

Internal publicsinclude workers,managers, volunteers, and directors

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Macro environment


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Macro environment

"he company and all of the other actorsoperate in a larger macro environment offorces that shape opportunities and posethreats to the company

Even the most dominant companies can bevulnerable to the often turbulent andchanging forces in the macro environment

+or a company to thrive it must understand

and adapt itself to its macro environment


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Macro environmental

Forces


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"he demographicenvironment 5emography is the study of human populations in

terms of si!e, density, location, age, gender, raceoccupation and other statistics.

5emographic environment is of great importance

to marketers. hanges in the world demographic environment

have ma%or implications for businesses.

Marketers have to keep an eye on demographictrends and developments in their market byanalysing changes in age and family structures,geographic population shifts, educationalcharacteristics and population diversity


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"he Macroenvironment

6ey 5emographic "rends

hanging age structure

hanging households eographic population shifts

-etter2educated, more white2collar

workforce #ncreasing 5iversity

e c ang ng age


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e c ang ng agestructure of the

population *opulations contains several generationalgroups , with baby boomers, eneration 7and Millenials being the largest groups.

"hese groups have been found to have agreat in/uence on marketing


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-orn between 89; and89;

)epresent 3 earn ?4= ofpersonal income

Many mini2segmentse@ist within the boomergroup

Entering peak earningyears as they mature

ucrative market fortravel, entertainment,

housing, and more

BabyBoomers

GenerationX

Generation Y

#eyGenerations


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-orn between 89;?and 89;

+irst latchkey children

Maintain a cautiouseconomic outlook

&hare new culturalconcerns

)epresent B83? billionin annual purchasingpower

Cill be primary buyers

of most goods by 3484

BabyBoomers

GenerationX

Generation Y

#eyGenerations


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-orn between 89 and 3444

3 million strong> almost aslarge a group as their babyboomer parents

All have a common /uency andcomfort with digital technology

#ts become their way of life

Engage with brands throughsocial media

Dew products, services, andmedia cater for en

omputer, #nternet and digitallysaavy

hallenging target for

marketers

BabyBoomers

GenerationX

Generation Y

#eyGenerations


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Economic environment

onsists of economic factors that aect consumerpurchasing power and spending patterns

Marketers must pay close attention to ma%ortrends and consumer spending patterns both

across and within their world markets onsumers nowadays spend carefully and desire

great value

e conom c


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e conom cEnvironment

Three types

of nationaleconomies:SubsistenceIndustrialDeveloping

economies


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6ey Economic "rends


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#ncome distribution Marketers must pay close attention to income

distribution as well as income levels Fver the past decades the rich have become

richer, middle class has shrunk, and the poor haveremained poor

"his distribution of income has created a tieredmarket with some companies targeting theaGuent, while you have some companies targetingthose with low incomes e.g. rise of dollar stores

&ome companies still target consumers acrossmarkets e.g. A company can be producing lowpriced products as well as lu@ury products targetedto its low income customers and its aGuentcustomers


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hanges in consumerspending Economic factors can have a dramatic

eect on consumer spending ad buyingbehaviours

5ue to recent economic downturns nowmost consumers are buying less andlooking for greater value in the thingsthey do buy

"his has led to marketersconcerntrating on Halue marketing .Marketers in all industries are looking

for ways to oer todays more (nancialfru al customers reater value: ri ht


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Ernst Engel0Engels aw

As income rises:"he percentage spent on fooddeclines

"he percentage spent onhousing remains constant

"he percentage spent on savings

increases


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"he natural environment

#nvolves the natural resources that areneeded as inputs by marketers or thatare aected by marketing activities.

At a most basic level une@pectedhappenings in the physicalenvironment anything from weather tonatural disasters can aect companies

and their marketing strategies Marketers should always be aware of

trends and JorK factors aecting their

natural environment.


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+actors #mpacting the DaturalEnvironment

&hortages of )aw Materials

#ncreased *ollution

#ncreased overnment #ntervention

Environmentally &ustainable &trategies


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oncern for the environment has spawnedthe so called green environment.

Enlingtened ompanies are now developingstrategies and practices that support

environmental sustainability! an eortto create a world economy that the planet

can support inde(nitely Environmental sustainability means meeting

present needs without compromising theability of future generations to meet their

needs Many companies are now responding to

consumer demands with moreenvironmentally responsible products e.e.

"echnological


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"echnologicalenvironment

#s perhaps the most dramatic force now shapingour destiny

"echnology has released so may wonders frommedicines to smart phones, and our attitudestowards technology depends on whether we are

impressed by what has been produced or not new technologies can oer e@citing

opportunities for marketers

"he technological environment changes

rapily , new technologies create ne$markets however those new technologiesreplace older technology thereby hurtingthose industries based on that technology e. g

mp1 technology has but almost wiped out the


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#ts important for marketers in that

regard to constantly be aware of newtechnologies coming up to avoid beingleft behind

Cith new technologies constantly

coming up, strict control measures arebeing taken for some products e.gmedicine to ensure the safety of thoseproducts

"hese control measures have resultedin much higher research costs andlonger times between new product

ideas and their introduction


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5iscussion Iuestions

Cithin the last ten years, which technologicalforce has had the greatest impact onmarketingL #n what areas of marketing hasthis impact been seenL

Chat technological force has impacted youthe mostL #n what ways has this occurredL

* liti l i t


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*olitical environment *olitical environment consists of laws , government

agencies and pressure groups that in/uence or limit

various organisations and individuals in a given society"egislation regulating business

Cell conceived regulations help create competition andensure fair markets for goods and services

+or that to happen overnments develop *ublic *olicyto guide commerce

egislation aecting businesses has been growing overthe years and many countries now have laws coveringissues such as competition, fair trade, environmental

protection, product safety , consume privacy etc"hese business legislations have been made for a

number of reasons:

8. to protect companies from each other

3 t t t f f i b i ti


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3. to protect consumers from unfair business practises

1. to protect the interests of society againstunrestrained business behaviour

Dew laws and enforcement will continue to increase .-usinesses must be aware of these developmentswhen planning their products and marketingprograms

Marketers need to know about laws protecting

competition, consumers and society and understandthe laws at local and international levels

Futside of the written laws and regulationsbusinesses are also governed by social codes andrules of professional ethics

Almost every aspect of marketing involves ethics andsocial responsibility issues

"his has led to what is referred to as Cause RelateMarketing


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ause related marketing

"o e@ercise their social responsibility andbuild more positive images many companiesare now linking themselves to worthwhilecauses

"hese days every product seems to be tied tosome cause

ause related marketing ha become aprimary form of corporate giving

#f handled well it can greatly bene(t both thecompany and the cause

E. gs


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ultural environment

onsists of institutions and other forces thataect a societys basic values, perceptions,preference, and behaviors.

*eople grow up in societies that shape their

basic beliefs and values, and these can eitherbe core or secondary

ore beliefs and values are passed on fromparents to children and reinforced by schools,churches, business and government

&econdary belief and values are more open tochange and marketers have a chance inchanging secondary beliefs and values butlittle chance of changing core values


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Although core values are fairly

consistent , cultural swings do takeplace .

Marketers want to predict cultural shiftsto spot new opportunities or threats

"he ma%or cultural values of a societyare e@pressed in peoples views ofthemselves and others as well as # theirviews of organisations , society, natureand the universe


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Themselves

Others

Organizations

Society

Nature

TheUniverse

Societys Major

Cultural Views Are

!"resse# in

$eo"les Views o%&

&hifts in secondary culturalvalues

)esponding to the marketing


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)esponding to the marketingenvironment

The "assive a""roach'

( Monitor an# analyze'

( A#a"t strategies to avoi# threats an# ta)e a#vantage

o% o""ortunities'

Environmental Management *erspective

"aking a proactive approach to managing theenvironment by taking aggressive Jratherthan reactiveK actions to aect the publics

and forces in the marketing environment.


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"his can be done by:

'iring lobbyists )unning advertorialsN

*ressing lawsuits

+iling complaints +orming agreements to control

channels

Documents

Markketing Environment