2. 1. The Company’s Macroenvironemnt
2. Responding to the Marketing Environment
Lecture Outline
3-3
3. • Demographic environment
• Economic environment
• Natural environment
• Technological environment
• Political environment
• Cultural environment
The Company’s Macroenvironment
3-21
4. 1-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
3-22
5. EXAMPLE: How change in demographic impact business
Six pocket syndrome
•2024 – 50% population will be over 40
•75% of household will be child less
???
6.
7. The Company’s Macroenvironment
Baby boomers include people born between
1946 and 1964
• About 27% of population
• When the last turn 65 in 2029, will control about 40%
of nation’s disposable income
• Age group 47 - 66
3-24
Demographic Environment
Changing Age Structure of the Population
8. • Don’t feel like growing old
•Spending a lot on Antiaging
products
•Toyota highlander.
http://www.youtube.com/watch?v=beE42k6Bt8M
http://www.youtube.com/watch?v=hybR_w3QWUc&feature=related
9. Demographic Environment
Changing Age Structure of the Population
Generation X includes people born between 1965 and 1976
• High parental divorce rates, [Latchkey kids]
• Concerned about the environment
• Respond to socially responsible companies
• Less materialistic
• Quality of life, want job satisfaction rather than promotion or growth
The Company’s Macroenvironment
3-25
10. •Gen Xers are displacing
lifestyle, culture and
materialistic values of baby
boomers
•Marketers are shifting towards
them from baby boomers
•E.g banking industry
11. The Company’s Macroenvironment
• Generation Y includes people born
between 1977 and 2000
3-26
Demographic Environment
Changing Age Structure of the Population
12. •Internet generation
•87% use internet daily
• Requires creative marketing
approaches
• Spend time in searching for
a product
• Viral or word of mouth marketing
works with them
13. Demographic Environment
Changing Age Structure of the Population
Generational marketing is important in segmenting
people by lifestyle or life stage instead of age.
Do marketers need to create products for
generations, it turns others off ?
The Company’s Macroenvironment
3-23
15. The Company’s Macroenvironment
Demographic Environment
Increasing Diversity
• Markets are becoming more diverse
• International
• National
• Trends Include:
• Ethnicity
• Gay and lesbian
• Disabled
3-30
Melting pot and salad
bowl approaches
https://www.youtube.com/watch?v=9aFl6tqhlt0
https://www.youtube.com/watch?v=iqj85V9-pRU
16. 2- Economic Environment
Economic environment consists of factors that affect
consumer purchasing power and spending patterns
• Subsistence economies consume most of their own
agriculture and industrial output
• Industrial economies are rich markets for many goods
The Company’s Macroenvironment
3-31
17. Economic Environment
Changes in Income
• Income distribution
• Upper-class consumers
• Middle-class consumers
• Working-class consumers
• Underclass consumers
Comment on income distribution of pakistan
The Company’s Macroenvironment
3-33
18. Economic Environment
Changes in Consumer Spending Patterns
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
3-34
19. 3- 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
• Renewable and non-renewable resources
• Environmentally sustainable strategies
• Green marketing
e.g water bills.
The Company’s Macroenvironment
3-35
20. 4- Technological Environment
Most dramatic force in changing the marketplace with many
positive and negative effects
• Rapid change
• Provides new markets and new opportunities
• Internet
• Medicine
• Miniaturization
• Weapons
• Credit cards
• Communication
e.g: RFID chips. In super markets.
The Company’s Macroenvironment
3-37
https://www.youtube.com/watch?v=eob532iEpqk
https://www.youtube.com/watch?v=rBXJ9Razofw
21. Some new tech prods
http://www.youtube.com/watch?v=G32JmZkRddc&feature=related http://www.youtube.com/watch?v=0pwabDeqVi8
https://www.youtube.com/watch?v=3I24bSteJpw
22. 5- 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
3-38
23. Political Environment
Changing Government Agency Enforcement
• Federal Trade Commission
• Food and Drug Administration
• Federal Communications Commission
• Federal Energy Regulatory Commission
• Federal Aviation Administration
• Consumer Product Safety Commission
• Environmental Protection Agency
e.g EU - dairy products from Asia.
Japan – Tulip buds
Tobacco advertisement banned
The Company’s Macroenvironment
3-40
24. 6- Cultural Environment
Cultural environment consists of institutions and other
forces that affect a society’s basic values,
perceptions, and behaviors
The Company’s Macroenvironment
3-42
25. Cultural Environment
Persistence of Cultural Values
Core beliefs and values have a high degree of
persistence, 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.
Eg: Bribe in Japan, Perdu
The Company’s Macroenvironment
3-43
https://www.youtube.com/watch?v=GOHvMz7dl2A
27. Views on Responding
• Uncontrollable
• Reacting by making strategies to adapt to forces in the
environment
• Proactive
• Taking aggressive actions to affect forces in the
environment.
• Reactive
• Watching and reacting to forces in the environment
Responding to the Marketing
Environment
3-48
