1. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter 4
The Marketing
Environment

2. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
“It is useless to tell a river to stop
running; the best thing is to learn
how to swim in the direction it is
flowing.”
-Anonymous
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

3. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter Objectives
• List and discuss the importance of the
elements of the company’s microenvironment
• Describe the macroenvironmental forces that
affect the company’s ability to serve its
customers
• Explain how changes in demographic and
economic environments affect marketing and
describe the levels of competition
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

4. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter Objectives
• Identify the major trends in the firm’s natural
and technological environments
• Explain the key changes that occur in the
political and cultural environments
• Discuss how companies can be proactive
rather than reactive when responding to
environmental trends
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

5. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
The Company’s
Microenvironment
• The Company
• Suppliers
• Marketing Intermediaries
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

6. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
The Company’s
Microenvironment
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

7. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
The Company
• Marketing managers must work with all
departments of a company
• All Departments have an impact on the
marketing department’s plans and
actions
• “Think Consumer”
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

8. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Suppliers
• Suppliers are firms and individuals that
provide the resources needed by the
company to produce its goods and
services
• Suppliers can seriously affect marketing
plans
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

9. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Marketing Intermediaries
• Marketing intermediaries help the company
promote, sell, and distribute its goods to the
final buyers
• Marketing service agencies help formulate
and implement marketing strategies
• Financial intermediaries help hospitality
companies finance their transactions
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

10. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
The Company’s Macroenvironment
(Adapted from Analysis for Market Planning, Donald R. Lehmann and Russell S. Winer, p. 22, 1994 by Richard D. Irwin.)
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

11. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Competitors
• To be successful, a company must satisfy
needs and wants of consumers better than
competitors
• A company should monitor three variables
when analyzing each of its competitors
– Share of Market
– Share of Mind
– Share of Heart
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

12. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Demographic Environment
• Demography is the study of human
populations in terms of size, density, location,
age, gender, race, occupation, and other
statistics
• Demographics change over time and
companies must keep up with them
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

13. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Demographic Environment
• Baby boomers – 77 Million post-World War
II babies born between 1946-1964
• Generation X – 45 million born between
1965-1976, the “birth dearth”
• Generation Y (echo boomers) – 72 million
born between 1977-1994
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

14. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Economic Environment
• The economic environment consists of
factors that affect consumer purchasing
power and spending patterns
• It is not enough to have people, the
people must have buying power
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

15. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
The Global Economy
Global economic dealings, such as currency
exchange rates, have a large impact on
travel and tourism across the world
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

16. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Natural Environment
• The natural environment consists of
natural resources required by marketers
or affected by marketing activities
• Anyone involved in tourism is
responsible for protecting the
environment and ensuring sustainability
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

17. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Technological Environment
• The hospitality industry is greatly affected by
changes in technology
– The Internet, computerized systems, key cards,
etc.
• Faces opposition by those who believe it
threatens privacy, simplicity, and even the
human race
• The most dramatic force affecting tourism
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

18. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Political Environment
The political environment is made up of
laws, government agencies, and
pressure groups that influence and limit
the activities of various organizations
and individuals in society
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

19. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Political Trends
• Increased legislation and regulation affecting
business
• Changing government Agency Enforcement
• Increased emphasis on socially responsible
actions and ethics e.g. MADD and PETA
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

20. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Cultural Environment
• The cultural environment includes
institutions and other forces that affect
society’s basic values, perceptions,
preferences, and behaviors
– Persistence of cultural values
– Subcultures
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

21. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Linked Environmental
Factors
• Environmental factors can also work together
to bring about change
– Americans now eat more meals prepared outside
than inside the home
– Low-carb diets
– Grocery stores competing with restaurants
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

22. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Responding to the
Marketing Environment
• Many companies feel the marketing
environment is uncontrollable
• An environmental management perspective
takes action to sway the marketing
environment
• Take a proactive rather than a reactive
approach
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

23. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Environmental Scanning
1. Determine environmental areas that require
monitoring
2. Determine how the information will be
collected
3. Implement data collection plan
4. Analyze data and use in market planning
process
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

24. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Using Marketing Information
• Simple data collection is not sufficient
• Information must be:
– Reliable
– Timely
– Used in decision making
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

25. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Best Practices
• 59 million Americans (28% of the
population) restricting carbohydrate intake
• Chipotle served burritos in bowls
• Atkins friendly wraps by Subway
• Is Low-carb dieting a passing fad?
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

26. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Key Terms
• Demography
• Echo boomers (baby boomlet
generation)
• Economic environment
• Environmental management
perspective
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

27. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Key Terms
• Financial intermediaries
• Generation X
• Macroenvironment
• Marketing environment
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

28. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Key Terms
• Marketing intermediaries
• Marketing services agencies
• Microenvironment
• Political environment
• Suppliers
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens