bout MBA mktg Manangement

1. The Marketing Environment
3

2. 3-2
• Describe the environmental forces that affect the
company’s ability to serve its customers.
• Explain how changes in the demographic and
economic environments affect marketing
decisions.
• Identify the major trends in the firm’s natural and
technological environments.
• Explain the key changes in the political and
cultural environments.
• Discuss how companies can react to the marketing
environment.
ROAD MAP: Previewing the Concepts

3. 3-3
Marketing Environment
• The marketing environment consists of actors
and forces outside the organization that affect
management’s ability to build and maintain
relationships with target customers.
• Environment offers both opportunities and
threats.
• Marketing intelligence and research used to
collect information about the environment.

4. 3-4
• Includes:
– Microenvironment: actors close to the
company that affect its ability to serve its
customers.
– Macroenvironment: larger societal forces that
affect the microenvironment.
• Considered to be beyond the control of the
organization.
Marketing Environment

5. 3-5
The Company’s Microenvironment
• Company’s Internal Environment:
– Areas inside a company.
– Affects the marketing department’s
planning strategies.
– All departments must “think consumer” and
work together to provide superior customer
value and satisfaction.

6. 3-6
Actors in the Microenvironment

7. 3-7
• Suppliers:
– Provide resources
needed to produce
goods and services.
– Important link in the
“value delivery
system.”
– Most marketers treat
suppliers like partners.
The Company’s Microenvironment

8. 3-8
The Company’s Microenvironment
• Marketing Intermediaries:
– Help the company to promote, sell, and distribute
its goods to final buyers
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries

9. 3-9
Partnering With Intermediaries
Coca-Cola provides
Wendy’s with much
more than just soft
drinks. It also pledges
powerful marketing
support.

10. 3-10
• Customers:
– Five types of
markets that
purchase a
company’s goods
and services
The Company’s Microenvironment

11. 3-11
The Company’s Microenvironment
• Competitors:
– Those who serve a target market with products
and services that are viewed by consumers as
being reasonable substitutes
– Company must gain strategic advantage against
these organizations
• Publics:
– Group that has an interest in or impact on an
organization's ability to achieve its objectives

12. 3-12
Types of Publics

13. 3-13
The Macroenvironment
• The company and all of the other actors
operate in a larger macroenvironment of
forces that shape opportunities and pose
threats to the company.

14. 3-14
The Company’s Macroenvironment

15. 3-15
The Company’s Macroenvironment
• Demographic:
– The study of human populations in terms of
size, density, location, age, gender, race,
occupation, and other statistics.
– Marketers track changing age and family
structures, geographic population shifts,
educational characteristics, and population
diversity.

16. 3-16
The Seven U.S. Generations

17. 3-17
Baby Boomers
• 78 million born between 1946 and 1964
• Account for 28% of population
• Earn more than half of all personal income
• Almost 25% belong to racial or ethnic minority
• Spend a lot on anti-aging products and
services
• Are likely to postpone retirement

18. 3-18
Generation X
• 45 million born between 1965 and 1976
• Defined by their shared experiences
– Increasing divorce rates
– More of their mothers employed
– First generation of latchkey kids
• Cynical of frivolous marketing pitches
• Care about the environment
• Prize experience, not acquisition

19. 3-19
Generation Y
• 72 million born between 1977 and 1994
• Have large amount of disposable income
• Comfortable with computer technology
• Tend to be impatient and “Now-Oriented”
• Many product lines targeted at Gen Ys

20. 3-20
• Pair with another student to discuss the
following questions:
– In what ways does the buying behavior of
you and your parents differ?
– In what ways does the buying behavior of
you and your grandparents differ?
– What selling strategies would work best for:
• You
• Your parents
• Your grandparents
Interactive Student
Assignment

21. 3-21
Changing American Family
• Household makeup:
– Married couples with children = 34%, and falling
– Married couples and people living with other
relatives = 22%
– Single parents = 12%
– Single persons and adult “live-togethers” = 32%

22. 3-22
The Changing American Family
Non-family households—
single live-alones or adult
live-togethers of one or both
sexes—make up a full 32
percent of U.S. households.
Today’s marketers must
incorporate “the likes of
Murphy Brown, Ally McBeal,
and Will and Grace into their
business plans.”

23. 3-23
Geographic Shifts in Population
• 16% of U.S. residents move each year
• General shift toward the Sunbelt states
• City to suburb migration continues
• More people moving to “micropolitan” areas
• More people telecommute

24. 3-24
Better Educated Population
• 1980:
– 69% of people over age 25 completed high
school
– 17% had completed college
• 2002:
– 84% of people over age 25 completed high
school
– 27% had completed college
• Currently, ⅔ of high school grads start
college

25. 3-25
More White-Collar Population
• 1950 – 1985:
– Proportion of white-collar workers increased
from 41% to 54%
– Proportion of blue-collar workers decreased
from 47% to 33%
– Proportion of service workers increased from
12% to 14%
• 1983 – 1999:
– Proportion of managers and professionals
increased from 23% to >30%

26. 3-26
Increasing Diversity
• U.S. is a “salad bowl”
– Various groups mixed together, each retaining
its ethnic and cultural differences
• Increased marketing to:
– Gay and lesbian consumers
– People with disabilities
• www.peapod.com

27. 3-27
Diversity-Based Advertising
Based on careful study of cultural differences, Bank of America has
developed targeted advertising messages for different cultural
subgroups, here Asians and Hispanics.

28. 3-28
Economic Environment
• Changes in Income
– 1980’s – consumption
frenzy
– 1990’s – “squeezed
consumer”
– 2000’s – value marketing
• Income Distribution
– Upper class
– Middle class
– Working class
– Underclass
Consists of factors that affect consumer
purchasing power and spending patterns.

29. 3-29
Income Distribution
Walt Disney markets two distinct Pooh bears to match its two-
tiered market.

30. 3-30
Natural Environment
• Involves the natural
resources that are
needed as inputs by
marketers or that are
affected by marketing
activities.

31. 3-31
Factors Impacting the Natural
Environment
Shortages of Raw Materials
Increased Pollution
Increased Government Intervention
Environmentally Sustainable Strategies

32. 3-32
Environmental Responsibility
McDonald’s has made a substantial commitment to the so-called
“green movement.”

33. 3-33
Technological Environment
•Most
dramatic
force now
shaping our
destiny.

34. 3-34
Technological Environment
• Changes rapidly.
• Creates new markets
and opportunities.
• Challenge is to make
practical, affordable
products.
• Safety regulations result
in higher research costs
and longer time between
conceptualization and
introduction of product.

35. 3-35
• Within the last ten years, which
technological force has had the greatest
impact on marketing? In what areas of
marketing has this impact been seen?
• What technological force has impacted
you the most? In what ways has this
occurred?
Discussion Questions

36. 3-36
Political Environment
Includes Laws,
Government
Agencies, and
Pressure Groups
that Influence or
Limit Various
Organizations and
Individuals In a
Given Society.
Increasing Legislation
Changing Government
Agency Enforcement
Increased Emphasis on Ethics
& Socially Responsible Actions

37. 3-37
Cause-Related Marketing
KitchenAid donates
$50 to breast cancer
research for every
pink mixer it sells
and encourages
consumers to host a
“Cook for the Cure”
dinner party.

38. 3-38
Cultural Environment
• The institutions
and other forces
that affect a
society’s basic
values,
perceptions,
preference, and
behaviors.

39. 3-39
Cultural Environment
• Core beliefs and values are passed on
from parents to children and are
reinforced by schools, churches, business,
and government.
• Secondary beliefs and values are more
open to change.

40. 3-40
Cultural Environment
• Yankelovich Monitor has identified eight
major consumer value themes:
1. Paradox
2. Trust not
3. Go it alone
4. Smarts really count
5. No sacrifices
6. Stress hard to beat
7. Reciprocity is the way to go
8. Me 2
• www.yankelovich.com

41. 3-41
Themselves
Others
Organizations
Society
Nature
The Universe
Cultural Environment
Society’s Major
Cultural Views Are
Expressed in
People’s Views of:

42. 3-42
Responding to the Marketing Environment
• Environmental Management Perspective
•Taking a proactive approach to managing the
environment by taking aggressive (rather than
reactive) actions to affect the publics and forces
in the marketing environment.
•This can be done by:
– Hiring lobbyists
– Running “advertorials”
– Pressing lawsuits
– Filing complaints
– Forming agreements to control channels

43. 3-43
Rest Stop: Reviewing the Concepts
• Describe the environmental forces that affect the
company’s ability to serve its customers.
• Explain how changes in the demographic and
economic environments affect marketing
decisions.
• Identify the major trends in the firm’s natural and
technological environments.
• Explain the key changes in the political and
cultural environments.
• Discuss how companies can react to the
marketing environment.