Analyzing the Marketing Environtment

• The Company’s Microenvironment 
•  The Company’s Macroenvironemnt 
• Responding to the Marketing Environment 

The Marketing Environment

The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers

Microenvironment consists of the actors close to the company that affect its ability to serve its customers -- the company, suppliers, marketing intermediaries, customer markets, competitors, and publics

The Company’s Microenvironment 

• Top management 

• Finance 

• R&D 

• Purchasing 

• Operations 

• Accounting

The Company’s Microenvironment : Suppliers

• Provide the resources to produce goods and services 

• Treated as partners to provide customer value

The Company’s Microenvironment  : Marketing Intermediaries

• Help the company to promote, sell and distribute its products to final buyers 

Types of Marketing Intermediaries : Resellers, Physical distribution firms, Marketing services agencies and  Financial intermediaries

The Company’s Microenvironment : Competitors

• Firms must gain strategic advantage by positioning their offerings against competitors’ offerings 

The Company’s Microenvironment : Public

• Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives 

– Financial publics 

– Media publics 

– Government publics 

– Citizen-action publics 

– Local publics 

– General public 

– Internal publics

The Company’s Macroenvironment : Demographic Environment

Demography is the study of human populations in terms of size, density, 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, educational characteristics, and population diversity

The Company’s Macroenvironment : Demographic Environment

• Changing age structure of the population 

– Baby boomers include people born between 1946 and 1964 

– Most affluent Americans

The Company’s Macroenvironment : Demographic Environment

• 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

The Company’s Macroenvironment : Demographic Environment

• Millennials (gen Y or echo boomers) include those born between 1977 and 2000 

– Comfortable with technology 

Includes: 

• Tweens (ages 8–12) 

• Teens (13–19) 

• Young adults (20’s)

The Company’s Macroenvironment : Demographic Environment

Generational marketing is important in segmenting people by lifestyle of life state instead of age

The Company’s Macroenvironment : Demographic Environment

More people are: 

• Divorcing or separating 

• Choosing not to marry 

• Choosing to marrying later 

• Marrying without intending to have children 

• Increased number of working women 

• Stay-at-home dads

The Company’s Macroenvironment 

• Growth in United States West and South and decline in Midwest and Northeast 

• Moving from rural to metropolitan areas 

• Changes in where people work 

1. Telecommuting 
2. Home office 
3. Divorcing or separating

• Changes in the workforce 

– More educated

 – More white collar

The Company’s Macroenvironment 

Markets are becoming more diverse 

– International 

– National 

• Includes: 

– Ethnicity 

– Gay and lesbian 

– Disabled

The Company’s Macroenvironment : Economic Environment

Economic environment consists of factors that affect consumer purchasing power and spending patterns • Industrial economies are richer markets 

• Subsistence economies consume most of their own agriculture and industrial output

The Company’s Macroenvironment : Economic Environment

• Changes in income 

• Value marketing involves ways to offer financially cautious buyers greater value—the right combination of quality and service at a fair price

The Company’s Macroenvironment 

• Ernst Engel—Engel’s Law 

• As income rises: 

– The percentage spent on food declines 

– The percentage spent on housing remains constant 

– The percentage spent on savings increases

The Company’s Macroenvironment  : 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 strategies

The Company’s Macroenvironment : Technologies Environment

• Most dramatic force in changing the marketplace 

• Creates new products and opportunities 

• Safety of new product always a concern

The Company’s Macroenvironment : Political Environment

Political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society

The Company’s Macroenvironment : Political Environment

• Legislation regulating business 

– Increased legislation 

– Changing government agency enforcement 

• Increased emphasis on ethics 

– Socially responsible behavior 

– Cause-related marketing

The Company’s Macroenvironment : Cultural Environment

Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors

The Company’s Macroenvironment : Cultural Environment Persistence of Cultural Values

• Core beliefs and values are persistent and 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 and include people’s views of themselves, others, organizations, society, nature, and the universe

The Company’s Macroenvironment : Cultural Environment Shifts in Secondary Cultural Values

• People’s view of themselves 

– Yankelovich Monitor’s consumer segments: 

• Do-It-Yourselfers

—recent movers 

• Adventurers 

• People’s view of others 

– More “cocooning”

• People’s view of organizations 

• People’s view of society

 – Patriots defend it 

– Reformers want to change it 

– Malcontents want to leave it

Responding to the Marketing Environment

Uncontrollable :

• React and adapt to forces in the environment 

Proactive :

• Aggressive actions to affect forces in the environment 

Reactive :

• Watching and reacting to forces in the environment