Marketers must analyze their marketing environment by considering changes in customer demands and expectations. They must view everything from the consumer's perspective and understand how consumer needs, wants, and ability to purchase are influenced by various evolving factors. Firms use tools to track competitors, consumer trends, and communicate with partners. They must have the capabilities to adapt to changing times and stay aware of market conditions. Competitors significantly impact consumers, so firms must understand competitors' strengths, weaknesses, and reactions. Few firms operate in isolation and most rely on corporate partners. The physical environment and concerns about sustainability influence products and services. Culture, including shared beliefs and customs, affects tastes and entertainment and must be considered in marketing. Demographics like age, gender

1. ANALYZING THE MARKETING
ENVIRONMENT

2. Analyzing the marketing environment
◦ Marketers continue to find changes in what their customers demand or expect, and they adapt
their product and/or service offerings accordingly.
◦ Consumers are the center of everything, therefore marketers must consider the entire business
process, all from a consumers point of view.
◦ Consumers needs and wants, as well as their ability to purchase, depends on a host of factors
that change and evolve over time.
◦ Firms use several tools to keep track of competitors activities and consumer trends and they rely
on various methods to communicate with their corporate partners and understand their physical
environment.

3. Capabilities
◦ The first factor that affects the consumer is the firm itself.
◦ Companies must be able to shift their focus with the changing times. A firms marketing team
must stay up to date on latest trends, current evens and market conditions in order for a firm to
stay relevant in the market that they are in.
◦ Marketers can use analyses of their external environment such as the swot analysis. They can use
this to categorize an opportunity as attractive or unattractive. If it appears attractive, they must
assess it in terms of their existing competence.

4. Competitors
◦ Firms use several different tools to keep track of competitors activities.
◦ Competition significantly affects consumers in the immediate environment. It is therefore critical
that marketers understand their firms competitors, including strengths, weaknesses, and
reactions to marketing activities.
◦ Criticizing competition is a widely used strategy, however the goal is to appeal to the
consumers.

5. Corporate Partners
◦ Very few firms operate in complete isolation.
◦ An example of this is automobile manufacturers that collaborate with suppliers of sheet metal,
tires, part makers, transport companies, etc.
◦ Very few times is a company ever able to completely rely on themselves many times they have
to rely on manufacturers that specialize in making the item they are needing, many times a
company receives all the components needed to make what they manufacturer and they many
times complete the final product.
◦ Without this kind of partnership our economy would not have near the constant businesses
expanding, opening, etc because businesses constantly rely on others to help manufacture their
products.

7. Physical Environment
◦ Physical environment includes land, water, air and living organisms.
◦ Many products and services are influenced by how they are used in the physical environment
and in turn they can also influence the physical environment.
◦ Globally many concerns about the environment and the sustainability of this planet have led to
demands for companies and consumers to avoid harming the environment and to stop
depleting those resources. This in turn has led to a more green culture and more people
pushing the envelope for new green ways.

8. Culture
◦ Culture is defined as “the shared meanings, beliefs, morals, values and customs of a group of
people.”
◦ Culture is many times passed down from generation to generation.
◦ Culture is a major factor when it comes to marketing because culture effects many things from
peoples taste in food, to their style of food, to what they enjoy doing in entertainment, culture
plays into all this and it is important when a firm is marketing to take the culture into effect so
as to market their product.

9. Culture

10. Demographics
◦ Demographics are characteristics of human populations and segments, especially those used to
identify consumer markets.
◦ Typical demographics such as age, gender, race and income are readily available from certain
marketing research firms. Many firms partake in their own research as well.
◦ Generational cohorts are cohorts formed by people of the same age and generation. These
people often times make many of the same purchase as those in their age group as well.
◦ Applying age as a way to identify consumers is quite useful to consumers.