Lecture # 16&17Lecture # 16&17

Marketing Marketing EnvironmentEnvironment

EnvironmentEnvironment

All the actors and forces influencing All the actors and forces influencing the company’s ability to transact the company’s ability to transact business effectively with it’s target business effectively with it’s target market.market.

Includes….Includes….

MicroenvironmentMicroenvironment - forces - forces close to the company that close to the company that affect its ability to serve its affect its ability to serve its customers.customers.

MacroenvironmentMacroenvironment - larger - larger societal forces that affect the societal forces that affect the whole microenvironment.whole microenvironment.

The Marketing The Marketing EnvironmentEnvironment

Marketing EnvironmentMarketing Environment- consists of - consists of the actors and forces outside the actors and forces outside marketing that affect marketing marketing that affect marketing management’s ability to develop and management’s ability to develop and maintain successful relationships with maintain successful relationships with its target customers.its target customers.

Company

Demographic

Economic

Natural

Technological

Political

Cultural

Company

Customers

Intermediaries

Suppliers

Competitors

Publics

The The MicroenvironmentMicroenvironment

CompanyCompany

CustomersCustomers

PublicsPublics Suppliers Suppliers

CompetitorsCompetitorsIntermediariesIntermediaries

Forces Affecting a Company’s Ability to

ServeCustomers

Forces Affecting a Company’s Ability to

ServeCustomers

The Company’s The Company’s MicroenvironmentMicroenvironment

Company’s Internal Company’s Internal EnvironmentEnvironment

Company’s Internal EnvironmentCompany’s Internal Environment- - functional areas inside a company that functional areas inside a company that have an impact on the marketing have an impact on the marketing department’s plans.department’s plans.

Marketing

ProductionM

anufacturing

Acco

un

ting

R & D

Fina

nce

To

p

Man

agem

ent

SuppliersSuppliers - provide the - provide the resources needed to produce resources needed to produce goods and services.goods and services.

Marketing IntermediariesMarketing Intermediaries - - help the company to promote, help the company to promote, sell, and distribute its goods to sell, and distribute its goods to final buyers.final buyers.

CustomersCustomers -- five types of five types of markets that purchase a markets that purchase a company’s goods and company’s goods and services.services.

CompanyCompany

ConsumerMarkets

InternationalMarkets

GovernmentMarkets

BusinessMarkets

ResellerMarkets

CompetitorsCompetitors - those who - those who serve a target market with serve a target market with similar products and services.similar products and services.

PublicsPublics - any group that - any group that perceives itself having an perceives itself having an interest in a company’s ability interest in a company’s ability to achieve its objectives.to achieve its objectives.

Types of PublicsTypes of Publics

Company

CitizenActionPublics

LocalPublics G

eneral

Public

Intern

al

Pu

blics

Government

Publics

Med

iaPu

blic

s

Fin

anci

alP

ub

lics

The Macro The Macro environmentenvironment

DemographicDemographic

TechnologicalTechnological

CulturalCultural EconomicEconomic

PoliticalPolitical NaturalNatural

Forces that ShapeOpportunities

and Pose Threatsto a Company

Forces that ShapeOpportunities

and Pose Threatsto a Company

Demographic Demographic

Demographic - monitors population in terms of age, sex, Demographic - monitors population in terms of age, sex, race, occupation, location and other statistics.race, occupation, location and other statistics.

The 78 million people The 78 million people born during the baby born during the baby boom, following World boom, following World War II and lasting until War II and lasting until the early 1960’sthe early 1960’s

BabyBaby BoomersBoomers Generation XGeneration X Generation YGeneration Y

Key GenerationsKey Generations

The 45 million peopleThe 45 million people

Born between 1965 Born between 1965 and 1976and 1976

Share new cultural Share new cultural concernsconcerns

Baby BoomersBaby Boomers GenerationGeneration XX Generation YGeneration Y

Key GenerationsKey Generations

Born between 1977 and Born between 1977 and 19941994

72 million strong; almost 72 million strong; almost as large a group as their as large a group as their baby boomer parentsbaby boomer parents

New products, services, New products, services, and media cater to GenYand media cater to GenY

Challenging target for Challenging target for marketersmarketers

Baby BoomersBaby Boomers Generation XGeneration X GenerationGeneration YY

Key GenerationsKey Generations

Key Demographic TrendsKey Demographic Trends Changing householdChanging household

Geographic population shiftsGeographic population shifts

Better-educated, more white-collar Better-educated, more white-collar workforceworkforce

Increasing DiversityIncreasing Diversity

Economic EnvironmentEconomic Environment

Economic Environment - factors that affect Economic Environment - factors that affect consumer buying power and spending patterns.consumer buying power and spending patterns.

Changesin Consumer

SpendingPatterns

Changesin Consumer

SpendingPatterns

EconomicDevelopment

EconomicDevelopment

Changes in Income Changes in Income

KeyEconomic

Concerns forMarketers

KeyEconomic

Concerns forMarketers

Rapid ChangeRapid Change

Interest RatesInterest Rates

InflationInflation

Global EconomyGlobal Economy

Natural EnvironmentNatural Environment

Natural environment- natural resources needed as inputs by Natural environment- natural resources needed as inputs by

marketers or that are affected by marketing activitiesmarketers or that are affected by marketing activities .. Shortage of raw materialsShortage of raw materials Increased pollutionIncreased pollution Government interventionGovernment intervention

Technology EnvironmentTechnology EnvironmentTechnological environment- forces that create new Technological environment- forces that create new

technologies, creating new product and market technologies, creating new product and market opportunities.opportunities.

Computers and computing powerComputers and computing power

Communications capabilitiesCommunications capabilities

cellular communicationscellular communications

the internetthe internet

Virtual realityVirtual reality

Rapid Pace of Change

Rapid Pace of Change

High R & D Budgets

High R & D Budgets

Focus on MinorImprovements

Focus on MinorImprovements

IncreasedRegulationIncreasedRegulation

Issues in the TechnologicalEnvironment

Issues in the TechnologicalEnvironment

Main Problem:Main Problem:

It can make your product It can make your product obsolete.obsolete.

Political EnvironmentPolitical Environment

Political environment- laws, government Political environment- laws, government agencies and pressure groups that influence or agencies and pressure groups that influence or limit marketing actions.limit marketing actions.

GreaterConcern for

Ethics

GreaterConcern for

Ethics

IncreasedLegislation

IncreasedLegislation

Changing Enforcement

Changing Enforcement

KeyTrends in the

PoliticalEnvironment

KeyTrends in the

PoliticalEnvironment

Cultural EnvironmentCultural Environment

Cultural environment- forces that affect a society’s basic Cultural environment- forces that affect a society’s basic values, perceptions, preferences, and behaviors.values, perceptions, preferences, and behaviors.

OfOrganizations

OfNature

OfOneself

OfSociety

Of the Universe

OfOthers

ViewsThat Express

Values

ViewsThat Express

Values

Responding to the Marketing EnvironmentResponding to the Marketing Environment

Reactive:Reactive: Passive Acceptance and Adaptation Passive Acceptance and Adaptation Companies design strategies that avoid threats and capitalize upon Companies design strategies that avoid threats and capitalize upon

opportunities.opportunities.

Proactive:Proactive: Environmental ManagementEnvironmental Management

Use of lobbyists, PR, advertorials, lawsuits, complaints, and Use of lobbyists, PR, advertorials, lawsuits, complaints, and contractual agreements to influence environmental forces.contractual agreements to influence environmental forces.

Identifying Potential MarketsIdentifying Potential Markets

MoneyMoney Relative buying powerRelative buying power

GrowthGrowth Rate of growthRate of growth

ConcentrationConcentration Population densityPopulation density

LiteracyLiteracy Communication concernsCommunication concerns