Principles of Marketing - Marketing Environment

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The Marketing

Environment

A Global PerspectiveA Global Perspective

33

Philip KotlerPhilip KotlerGary ArmstrongGary ArmstrongSwee Hoon AngSwee Hoon Ang

Siew Meng LeongSiew Meng LeongChin Tiong TanChin Tiong Tan

Oliver Yau HonOliver Yau Hon--MingMing

PowerPoint slides adapted byPeggy Su

Copyright 2009 Pearson Education South Asia Pte Ltd 3-1


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3-2Copyright 2009 Pearson Education South Asia Pte Ltd

Learning Objectives

After studying this chapter, you should be able to:

1. Describe the environmental forces that affect thecompanys ability to serve its customers

2. Explain how changes in the demographic andeconomic environments affect marketing decisions

3. Identify the major trends in the firms natural andtechnological environments

4. Explain the key changes in the political and culturalenvironments

5. Discuss how companies can react to the marketingenvironment


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Chapter Outline

1. The Companys Microenvironment

2. The Companys Macroenvironemnt

3. Responding to the Marketing Environment


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The Marketing Environment

The marketing environment includes theactors and forces outside marketing that affectmarketing managements ability to build and

maintain successful relationships withcustomers.


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Marketing Environment

The microenvironment consists of the actorsclose to the company that affect its ability toserve its customers, the company, suppliers,marketing intermediaries, customer markets,competitors, and publics.



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Marketing Environment

The macroenvironment consists of the largersocietal forces that affect the

microenvironment. Demographic

Economic

Natural

Technological

Political

Cultural


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The Companys Microenvironment

The company

Suppliers

Marketing intermediaries

Customers

Competitors

Publics


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The Company

Internal environment includes:

Top management Finance

R&D

Purchasing Operations

Accounting



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Suppliers

Provide the resources to produce goods andservices

Treated as partners to provide customer value



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Marketing Intermediaries

Help the company to promote, sell, anddistribute its products to final buyers

Include:

Resellers

Physical distribution firms

Marketing services agencies

Financial intermediaries



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Resellers are the distribution channel firmsthat help the company find customers or makesales to them. These include:

Wholesalers

Retailers

Physical distribution firms are the distributionchannel firms that help the company to stockand move goods from their points of origin totheir final destination.



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Marketing service agencies are the marketingresearch firms, advertising agencies, media

firms, and marketing consulting firms that helpthe company target and promote its products tothe right markets.

Financial intermediaries include banks, creditcompanies, insurance companies, and otherbusinesses that help finance transactions orinsure against the risks associated with thebuying and selling of goods.



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Customers

Customer markets consist of individuals andhouseholds that buy goods and services for

personal consumption.

Business markets buy goods and services forfurther processing or for use in their production

process.



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Customers

Reseller markets buy goods and services toresell at a profit.

Government markets buy goods and servicesto produce public services or transfer goodsand services to others who need them.

International markets consist of buyers inother countries including consumers,producers, resellers, and governments.



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Competitors

Firms must gain strategic advantage bypositioning their offerings against competitors

offerings. Each firm should consider its own size and

industry position compared to those of itscompetitors.



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Publics

Any group that has an actual or potentialinterest in or impact on an organizations

ability to achieve its objectives: Financial publics

Media publics

Government publics

Citizen-action publics


Local publics

General public

Internal publics


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Publics

Financial publics influence the companysability to obtain fundsbanks, investment

houses, and stockholders.

Media publics carry news, features, andeditorial opinionnewspapers, magazines, and

radio and television stations. Government publics influence product safety

and truth in advertising.



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Publics

Citizen-action publics include consumerorganizations, environment groups, and

minority groups

Local publics include neighborhood residentsand community organizations

General publics influence the companyspublic image

Internal publics include workers, managers,volunteers, and directors



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Demographic environment

Economic environment

Natural environment Technological environment

Political environment

Cultural environment

The Companys Macroenvironment


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Demographic Environment

Demography is the study of human populationsin terms of size, density, location, age, gender,race, occupation, and other statistics.

Demographic environment is importantbecause it involves people, and people make upmarkets.

Demographic trends include age, familystructure, geographic population shifts,educational characteristics, and populationdiversity.



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Changing Age Structure of the Population

Generational marketing is important in segmenting

people by lifestyle of life state instead of age.



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Baby boomers include people born between

1946 and 1964 Includes most affluent Asians



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Generation X includes people born between

1965 and 1976. They tend to:

Have high divorce rates

Are concerned about the environment

Respond to socially responsible companies

Are less materialistic

Emphasize quality of life

Consumer organizations, environment groups,and minority groups



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Generation Y includes people born between 1977

and 1994. The Internet generation



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The Changing Asian Family

More people are:

Divorcing or separating Choosing not to marry

Choosing to marry later

Marrying without intending to

have children Higher divorce rates

Increased number of workingwomen

More stay-at-home dads



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Geographic Shifts in Population

Trends include:

Migratory movements between andwithin countries

Moving from rural to metropolitan areas

Changes in where people work

Telecommuting

Home office

Divorce or separation


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Changes in the Workforce

Trends include:

More educated

More white collar

More professional



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Increasing Diversity

Markets are becoming more diverse

International

National

Trends include:

Ethnicity

Gay and lesbian

Disabled



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Economic Environment

Economic environment consists of factors thataffect consumer purchasing power and spendingpatterns.

Subsistence economies consume most of their ownagriculture and industrial output.

Industrial economies are richer markets.



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Changes in Income

Value marketing involves ways to offer financially

cautious buyers greater valuethe right combination ofquality and service at a fair price.



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Changes in Income

Income distribution

Upper-class consumers

Middle-class consumers

Working-class consumers

Underclass consumers



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Changes in ConsumerSpending Patterns

Ernst EngelEngels Law

As income rises:

Percentage spent on food declines

Percentage spent on housing remains constant

Percentage spent on savings increases



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Natural Environment

Natural environment involves the natural resourcesthat are needed as inputs by marketers or that are

affected by marketing activities. Trends

Shortages of raw materials

Increased pollution

Increased government intervention

Environmentally sustainable strategies

Green marketing



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Technological Environment

Most dramatic force in changing the marketplace withmany positive and negative effects

Rapid change

Provides new markets and new opportunities

Internet

Medicine

Miniaturization

Weapons

Credit cards

Communication



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Political Environment

Political environment consists of laws, governmentagencies, and pressure groups that influence or limitvarious organizations and individuals in a given

society.



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Legislation regulating business

Public policy to guide commercesets of laws and

regulations that limit business for the good of societyat large

Increasing legislation to:

Protect companies

Protect consumers

Protect the interests of society



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Increased Emphasis on Ethics and SociallyResponsible Actions

Socially responsible behavioroccurs when firmsactively seek out ways to protect the long-term interestsof their consumers and the environment

Cause-related marketing


Yukinobu Zengame


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Cultural Environment

The cultural environment consists of institutions and

other forces that affect a societys basic values,

perceptions, and behaviors.



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Persistence ofCultural Values

Core beliefs and values have a high degree of

persistence, are passed on from parents to children,and are reinforced by schools, churches, businesses,and government.

Secondary beliefs and values are more open to

change.



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Shifts in Secondary Cultural Values

Major cultural values of a society are expressed in

peoples view of:

Themselves

Others

Organization

Society

Nature and the universe



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Peoples view of themselves

Yankelovich Monitors consumer segments:

Do-It-Yourselfersrecent movers

Adventurers

Peoples view of others



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Peoples view of organizations

Peoples view of society

Patriots defend it

Reformers want to change it

Malcontents want to leave it



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Peoples view of nature

Some feel ruled by it

Some feel in harmony with it

Some seek to master it

Peoples view of the universe

Renewed interest in spirituality



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Views on Responding

Uncontrollable

Reacting and adapting to forces in the environment

Proactive

Taking aggressive actions to affect forces in theenvironment

Reactive

Watching and reacting to forces in the environment

Responding to the Marketing

Environment

Documents

Principles of Marketing - Marketing Environment