Ch 04 marketing environment

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

Key Terms
• DemographyDemography
• Echo boomersEcho boomers (baby boomlet generation)(baby boomlet generation)
• Economic environmentEconomic environment
• Environmental management perspectiveEnvironmental management perspective
• Financial intermediariesFinancial intermediaries
• Generation XGeneration X
• MacroenvironmentMacroenvironment
• Marketing environmentMarketing environment

Key Terms
• Marketing intermediariesMarketing intermediaries
• Marketing services agenciesMarketing services agencies
• MicroenvironmentMicroenvironment
• Political environmentPolitical environment
• SuppliersSuppliers

““It is useless to tell a river to stop running; theIt is useless to tell a river to stop running; the
best thing is to learn how to swim in thebest thing is to learn how to swim in the
direction it is flowing.”direction it is flowing.”
-Anonymous-Anonymous

Chapter ObjectivesChapter Objectives
• List and discuss the importance of theList and discuss the importance of the
elements of the company’s microenvironmentelements of the company’s microenvironment
• Describe the macroenvironmental forces thatDescribe the macroenvironmental forces that
affect the company’s ability to serve itsaffect the company’s ability to serve its
customerscustomers
• Explain how changes in demographic andExplain how changes in demographic and
economic environments affect marketing andeconomic environments affect marketing and
describe the levels of competitiondescribe the levels of competition

Chapter ObjectivesChapter Objectives
• Identify the major trends in the firm’s naturalIdentify the major trends in the firm’s natural
and technological environmentsand technological environments
• Explain the key changes that occur in theExplain the key changes that occur in the
political and cultural environmentspolitical and cultural environments
• Discuss how companies can be proactiveDiscuss how companies can be proactive
rather than reactive when responding torather than reactive when responding to
environmental trendsenvironmental trends

The Company’s MicroenvironmentThe Company’s Microenvironment
• The CompanyThe Company
• SuppliersSuppliers
• Marketing IntermediariesMarketing Intermediaries

The Company’s MicroenvironmentThe Company’s Microenvironment

The CompanyThe Company
• Marketing managers must work with allMarketing managers must work with all
departments of a companydepartments of a company
• All Departments have an impact on theAll Departments have an impact on the
marketing department’s plans andmarketing department’s plans and
actionsactions
• ““Think Consumer”Think Consumer”

SuppliersSuppliers
• Suppliers are firms and individuals thatSuppliers are firms and individuals that
provide the resources needed by theprovide the resources needed by the
company to produce its goods andcompany to produce its goods and
servicesservices
• Suppliers can seriously affect marketingSuppliers can seriously affect marketing
plansplans

Marketing IntermediariesMarketing Intermediaries
• Marketing intermediaries help theMarketing intermediaries help the
company promote, sell, and distributecompany promote, sell, and distribute
its goods to the final buyersits goods to the final buyers
• Marketing service agencies helpMarketing service agencies help
formulate and implement marketingformulate and implement marketing
strategiesstrategies
• Financial intermediaries help hospitalityFinancial intermediaries help hospitality
companies finance their transactionscompanies finance their transactions

The Company’s MacroenvironmentThe Company’s Macroenvironment
(Adapted from Analysis for Market Planning, Donald R. Lehmann and Russell S. Winer, p. 22, 1994 by Richard D. Irwin.)

CompetitorsCompetitors
• To be successful, a company must satisfyTo be successful, a company must satisfy
needs and wants of consumers betterneeds and wants of consumers better
than competitorsthan competitors
• A company should monitor three variablesA company should monitor three variables
when analyzing each of its competitorswhen analyzing each of its competitors
– Share of MarketShare of Market
– Share of MindShare of Mind
– Share of HeartShare of Heart

Demographic EnvironmentDemographic Environment
• Demography is the study of humanDemography is the study of human
populations in terms of size, density,populations in terms of size, density,
location, age, gender, race, occupation,location, age, gender, race, occupation,
and other statisticsand other statistics
• Demographics change over time andDemographics change over time and
companies must keep up with themcompanies must keep up with them

Demographic EnvironmentDemographic Environment
• Baby boomersBaby boomers – 77 Million post-World War
II babies born between 1946-1964
• Generation XGeneration X – 45 million born between
1965-1976, the “birth dearth”
• Generation YGeneration Y (echo boomers) – 72 million
born between 1977-1994
• GenerationGeneration ZZ (techno boomers) – born after
-1996

Economic EnvironmentEconomic Environment
• The economic environment consists ofThe economic environment consists of
factors that affect consumer purchasingfactors that affect consumer purchasing
power and spending patternspower and spending patterns
• It is not enough to have people, theIt is not enough to have people, the
people must have buying powerpeople must have buying power

The Global EconomyThe Global Economy
Global economic dealings, such asGlobal economic dealings, such as
currency exchange rates, have acurrency exchange rates, have a
large impact on travel and tourismlarge impact on travel and tourism
across the worldacross the world

Natural EnvironmentNatural Environment
• The natural environment consists ofThe natural environment consists of
natural resources required by marketersnatural resources required by marketers
or affected by marketing activitiesor affected by marketing activities
• Anyone involved in tourism isAnyone involved in tourism is
responsible for protecting theresponsible for protecting the
environment and ensuring sustainabilityenvironment and ensuring sustainability

Technological EnvironmentTechnological Environment
• The hospitality industry is greatlyThe hospitality industry is greatly
affected by changes in technologyaffected by changes in technology
– The Internet, computerized systems, keyThe Internet, computerized systems, key
cards, etc.cards, etc.
• Faces opposition by those who believeFaces opposition by those who believe
it threatens privacy, simplicity, and evenit threatens privacy, simplicity, and even
the human racethe human race
• The most dramatic force affectingThe most dramatic force affecting
tourismtourism

Political EnvironmentPolitical Environment
The political environment is madeThe political environment is made
up of laws, government agencies,up of laws, government agencies,
and pressure groups that influenceand pressure groups that influence
and limit the activities of variousand limit the activities of various
organizations and individuals inorganizations and individuals in
societysociety

Political TrendsPolitical Trends
• Increased legislation and regulationIncreased legislation and regulation
affecting businessaffecting business
• Changing government AgencyChanging government Agency
EnforcementEnforcement
• Increased emphasis on sociallyIncreased emphasis on socially
responsible actions and ethicsresponsible actions and ethics

Cultural EnvironmentCultural Environment
• The cultural environment includesThe cultural environment includes
institutions and other forces thatinstitutions and other forces that
affect society’s basic values,affect society’s basic values,
perceptions, preferences, andperceptions, preferences, and
behaviorsbehaviors
– Persistence of cultural valuesPersistence of cultural values
– SubculturesSubcultures

Linked Environmental FactorsLinked Environmental Factors
• Environmental factors can also workEnvironmental factors can also work
together to bring about changetogether to bring about change
– Americans now eat more meals preparedAmericans now eat more meals prepared
outside than inside the homeoutside than inside the home
– Low-carb dietsLow-carb diets
– Grocery stores competing with restaurantsGrocery stores competing with restaurants

Responding to the Marketing Environment
• Many companiesMany companies feel the marketingfeel the marketing
environment is uncontrollableenvironment is uncontrollable
• An environmental managementAn environmental management
perspective takes action to sway theperspective takes action to sway the
marketing environmentmarketing environment
• Take a proactive rather than a reactiveTake a proactive rather than a reactive
approachapproach

Environmental ScanningEnvironmental Scanning
1.1. Determine environmental areasDetermine environmental areas
that require monitoringthat require monitoring
2.2. Determine how the informationDetermine how the information
will be collectedwill be collected
3.3. Implement data collection planImplement data collection plan
4.4. Analyze data and use in marketAnalyze data and use in market
planning processplanning process

Using Marketing InformationUsing Marketing Information
• Simple data collection is not
sufficient
• Information must be:
– ReliableReliable
– TimelyTimely
– Used in decision makingUsed in decision making

Best Practices
• 59 million Americans (28% of the59 million Americans (28% of the
population) restrictingpopulation) restricting
carbohydrate intakecarbohydrate intake
• Chipotle served burritos in bowlsChipotle served burritos in bowls
• Atkins friendly wraps by SubwayAtkins friendly wraps by Subway
• Is Low-carb dieting a passing fad?Is Low-carb dieting a passing fad?

End of chapterEnd of chapter
slidesslides

Ch 04 marketing environment

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