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Module 2 (2).ppt
1. Chapter 2: The Marketing Environment
Understanding Market and Consumer
2. LEARNING OBJECTIVES
• At the end of this lecture, students should
be able to:
• identify the actors and forces in the marketing
environment.
• explain how these forces can affect an
organization's ability to serve its customers.
• discuss how companies can react to the
marketing environment.
3. The Marketing Environment
• It includes actors and forces outside marketing
that affect marketing management’s ability to
create value, attract and serve customers.
• Some forces are controllable while others are
uncontrollable.
5. The Micro-Environment
• Consists of actors close to the company that
influence its ability to serve customers
• Main entities in the micro-environment are:
• Company
• Suppliers
• Marketing Intermediaries
• Customers
• Competitors
• Publics
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6. Suppliers
• Firms need resources to produce goods and
services
• Obtain resources from the suppliers.
• Problems with suppliers (i.e. delays & shortages)
can seriously affect buyer-seller relationships
• Suppliers can exert power if they are the only
one or one of a few businesses providing a
particular product or service.
7. Company
• Includes the various groups within the
organization / company
• i.e. top management, finance, purchasing,
operations, accounting, R&D.
• These company groups have the ability to
influence the value creation and nature of
relationship between the marketer and his
customers.
8. Competitors
• Successful organisations understand the needs
and wants of their target market and delivers the
desired satisfaction better than their competitors.
• Firms develop winning strategies to get ahead of
their competitors.
9. Marketing Intermediaries
• Primary role of marketing intermediaries is to
help the manufacturer promote, sell, and
distribute its products to final buyers
• We look at the various types of marketing
intermediaries:
• Resellers (i.e. wholesalers & retailers)
• Physical distribution firms (i.e. warehouse &
transportation)
• Marketing services agencies (i.e. marketing research
firms & media companies).
• Financial intermediaries (i.e. banks & insurance
companies)
10. Publics
Public define as any group that has an
actual or potential interest in or impact on
an organisation’s ability to achieve its
objectives
11. Publics
• Financial publics (i.e. banks)
• Media publics (i.e. newspapers, TV, radio)
• Government publics (i.e. federal & state)
• Citizen action publics (i.e. WWF)
• Local publics (i.e. neighborhoods)
• General public (i.e. all populations)
• Internal public (i.e. workers, manager, etc)
13. Customers
• Consumer markets: individuals and households that
buy goods and services for personal consumption.
• Business markets: buy goods and services for further
processing or for use in their production process.
• Reseller markets: buy goods and services to resell at a
profit.
• Government markets: composed of government
agencies that buy goods and services to produce public
services.
• International markets: buyers in other countries,
including consumers, producers, resellers, and
governments.
15. The Macro-environment
• Includes forces that are essentially
uncontrollable and influence the
microenvironment of a business
• Main factors in the macro-environment are:
• Political / Legal
• Economic
• Social / Cultural
• Technological
• Environment / Natural
• Demographic
17. Political
• Political environment consists of laws,
government agencies, and pressure groups that
influence or limit various organisations and
individuals in a given society.
Kotler and Armstrong (2010)
• Increased business legislations to:
• protect companies from each other.
• protect consumers from unfair business practices.
• protect the interests of society.
18. Economic
• Deals with factors that influence purchasing
ability and buying behavior
• Main economic variables are inflation, income
level, and unemployment.
• Marketers must continuously monitor the
economic situation as it could influence the
demand for their products and services.
19. Social / Cultural
Cultural environment consists of institutions
and other forces that affect a society’s
basic values, perceptions, and behaviours.
Kotler and Armstrong (2010)
20. Cultural
• 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, organisation, society, nature,
and the universe.
21. Technological
• Most dramatic force in changing the marketplace
• Creates new products and opportunities
• Safety of new product always a concern
22. Natural
The 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
23. Demographic
• Involves the study of human population that are
used to identify markets – age, race, household
structure, etc.
• Different demand for products and services as
consumers become older?
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24. Generation Groups
Generation Name
• Baby boomers
• Generation X
• Xennials
• Generation Y (Millennials)
• Generation Z (iGen)
• Gen Alpha
Birth Years
• 1946 to 1964
• 1965 to 1976
• 1977 to 1985
• 1980 to 1994
• 1995 to 2012
• 2013 to 2025
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25. Generation Groups
• Baby boomers include people born between
1946 and 1964.
• Considered to be the most affluent Americans
• Characteristics:
• aren’t afraid to put in a hard day of work
• independent and self-assured.
• were raised in an era where resourcefulness was a
necessary trait.
• strongest characteristics is their strong sense of
community
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26. Generation Groups
• Generation X includes people born between
1965 and 1976:
• Characteristics:
• Two-income families; high parental divorce rates
• Cautious economic outlook
• Less materialistic; family comes first
• Lag behind on retirement savings.
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27. Generation Groups
• Millennial (Gen Y or echo boomers) include
those born between 1977 and early 2000s.
• Characteristics:
• Comfortable with technology (Tech-Savvy)
• Family-Centric – better work life balance
• Achievement oriented
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28. Generation Groups
• Generation Z born after the Millennial
Generation (mid 2000s to present)
• Characteristics:
• highly "connected," having had lifelong use of
communication
• media technologies, "digital natives”
• more demanding
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29. SOME INTERESTING FACTS
• More people are:
• Divorcing or separating
• Choosing not to marry
• Choosing to marry later
• Marrying without intending to have children
• Increased number of working women
• Stay-at-home dads
30. Demographic
• Changes in the Workforce
• More educated
• More white collar
• This means more demand for quality products
and services.
• Branded clothing
• Books and magazines
• Travel
• Personal computers or laptops
• Internet Services
31. CHANGES IN LEISURELY ACTIVITIES
• Earlier retirement
• Desire for travel abroad
• Leveraged more on ICT as
communication tool
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32. Responding to the Marketing Environment
• The marketing environment is often seen as
being uncontrollable.
• These organisations simply adapt and react to
changes in the environment (Reactive stance)
• Other organisations adopt a proactive stance by
taking aggressive actions to affect the forces in
their marketing environment (Proactive stance).
34. DISCUSSION
In a group of 5 to 6, go online and compare the
marketing strategies of :
McDonald’s (www.mcdonalds.com),
Wendy’s (www.wendys.com), and
Burger King (www.burgerking.com).
1. What age group is each targeting?
2. Do you agree with their strategy?
Kotler and Armstrong (2010),
Principles of Marketing, 13th e.
Prentice-Hall
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35. REFERENCES
• Main text
• Brassington, S & Pettitt, F 2006, Principles of Marketing, 4th
edn. Prentice-Hall.
• Kotler, P & Armstrong, G 2010, Principles of Marketing, 13th
edn. Prentice-Hall, USA.
• Supplementary text
• Soloman, M 2006, Consumer Behavior, Prentice-Hall, London
• Levens, M 2012, Marketing: Defined, Explained, Applied, 2nd
edn, Pearson, USA.
• McDaniel, C & Gates, R 2010, Marketing Research, 8th edn,
John Wiley & Sons
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