Analyzing the Marketin Environment

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3-1Prentice Hall, Copyright 2009

Chapter 1

Ch

a pte

r 3

Analyzing

theMarketing

Environment


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Describe the environmental forces that affect thecompanys ability to serve its customers.

Explain how changes in the demographic andeconomic environments affect marketing decisions.

Identify the major trends in the firms natural andtechnological environments.

Explain the key changes in the political and culturalenvironments.

Discuss how companies can react to the marketingenvironment.

Rest Stop:Previewing the Concepts


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Challenges Faced shifting consumer

lifestyles and a sales growth

slump of 3% between 1997and 2000. Posted firstquarterly loss in 2002.

McDonalds was losing shareto the fast casual restaurantsegment because consumerswanted healthier, better-

tasting food in more upscale,fashionable surroundings.

Named as the defendant in ahighly publicized law suit.

Response: Introduced Planto Win in early 2003.

McDonalds Responding to Change

Case Study

Plan to Win Focused on consistent products and

reliable servicecore

competencies. Introduced the Its what I eat andwhat I do. . . Im loving it adcampaign and revamped Web site tohelp consumers understand how tolive balanced, active lives. Involvednutrition experts in menu redesign.

Added upscale restaurants, such asMcCafe coffee shops and offeredhealthier food options: Go Active!Adult Happy Meal; white meatMcNuggets; various salads.

Results: Increased sales by 42%

while profits quadrupled.


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Marketing Environment

Consists of actors and forces outside of the

organization that affect managements

ability to build and maintain relationshipswith target customers.

Studying the environment allows marketers to take

advantage of opportunities as well as to combatthreats.

Marketing intelligence and research are used to

collect information about the environment.


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Includes:

Microenvironment:

Actors close to the company that affect its

ability to serve its customers.

Macroenvironment:

Larger societal forces that affect the

microenvironment.



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The Microenvironment

Company itself

Suppliers

Marketing intermediaries

Customers

Competitors

Publics


7/353-7Prentice Hall, Copyright 2009

The company itself:

Areas/departments inside of a company.

Affects the marketing departments planning

strategies.

All departments must think consumer andwork together to provide superior customer

value and satisfaction.




Suppliers:

Provide resources needed to produce goods

and services.

Important link in the value delivery

system.

Most marketers treat suppliers like partners.




Marketing intermediaries:

Help the company to promote, sell, and

distribute its goods to final buyers.

Resellers

Physical distribution firms

Marketing services agencies

Financial intermediaries




Customers:

Five types of markets that may purchase a

companys goods and services.

Consumer

Business

Reseller

Government

International




Competitors:

Those who serve a target market with

products and services that are viewed by

consumers as being reasonable substitutes

for the firms products or services.

Company must seek to gain strategic

advantage against these organizations.





Publics:Any group that has an interest in or impact on an

organizations ability to achieve its objectives. Financial public Media public Government public

Citizen-action public Local public General public Internal public



The company and all of the other actors

operate in a largermacroenvironmentof

forces that shape opportunities and posethreats to the company.

The Macroenvironment



Forces in the macroenvironment can be

categorized as:

DemographicEconomic

Natural

TechnologicalPolitical

Cultural

The Macroenvironment



Demographics:

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 at home and abroad.

Demographic Environment



The changing age structure of the U.S.

population is the single most important

demographic trend.

Baby boomers, Generation X, and the

Millennials are key generational groups.




Baby boomers:78 million born between 1946 and 1964.

Nearly 30% of population.Spend $2.3 trillion annually and hold of

the nations financial assets.

Spend $30 billion annually on anti-agingproducts and services; strong market forfinancial services, new housing, travel, etc.

Are likely to postpone retirement.




Generation X:49 million born between 1965 and 1976.

Defined by shared experiences:

Increased parental divorce rates and moreemployed mothers made Generation X the

first of the latchkey kids. Gen X developed a more cautious economic

outlook due to recessions and downsizingthat were common when they grew up.




Generation X:Cares about the environment.Prizes experience, not acquisition.Family comes first, career second.Skeptical of marketing messages; researches

purchases carefully, uses communities toshare information.

Represents close to $1.4 trillion in annualpurchasing power.




Millennials:

83 million born between 1977 and 2000larger

than baby boomer segment.Includes tweens, teens, and young adults.

Ethnically diverse.

Fluent with computer and digital technology.Personalization and product customization are key

to marketing success.





The American family and householdmakeup is changing:

Traditional households are in decline: Married couples with children = 23%

Non-traditional households are growing:

Married without children = 29%

Single parents = 16% Non-family households = 32%

Special needs of non-traditional households areincreasingly being considered by marketers.



Geographic shifts in population:14% of U.S. residents move each year.

General shift toward the Sunbelt states.City to suburb migration continues.More people are moving to micropolitan

areas.More people telecommute:

1 in 10 people now work out of their home. Home office segment is being targeted.




Better educated population:1980:

69% of people over age 25 completed highschool; 17% had completed college.

2004:

86% of people over age 25 completed highschool; 28% had completed college.Increasing demand for quality products,

books/magazines, computers, travel, etc.




Increasing white-collar population 19501985:

White-collar workers increased from 41% to 54%,while blue-collar workers decreased from 47% to33%.

19831999:

Professionals and managers increased from 23% togreater than 30%. 20042012:

Professionals should increase by 21% whilemanufacturing is expected to decline by 5%.



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Increasing diversity:The United States is an ethnic salad bowl.

Ethnic segments will continue to grow as apercentage of the U.S. population.

Marketers target specially designed ads,products, and promotions at ethnic groups.

Marketing efforts are increasing toward: Gay and lesbian consumers. People with disabilities.



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Economic Environment

Changes in income

1990sconsumption

frenzy, record debt

2000ssqueezedconsumer

Marketers focus on

offering greater value

Income distribution

Upper class: getting

wealthier

Middle class: shrinkingin size

Working class

Underclass: remain poor

Consists of factors that affect consumer

purchasing power and spending patterns.


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Natural Environment

Involves natural resources that areneeded as inputs by marketers or that

are affected by marketing activities. Factors include:

Shortages of raw materials

Increased pollutionIncreased government intervention

Environmentally sustainable strategies


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Most dramatic force shaping our destiny.

Changes rapidly, creating new markets and

opportunities and/or danger of productsbecoming obsolete.

Challenge is to make practical, affordablenew products.

Safety regulations result in higher researchcosts and longer time between productconceptualization and introduction.

Technological Environment


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Cultural Environment

The institutions and other forces that affecta societys basic values, perceptions,

preferences, and behaviors. 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 tochange.

Marketers may be able to change secondary beliefs,but NOT core beliefs.


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Cultural Environment

Societys major cultural views are expressedin peoples views of:

ThemselvesOthers

Organizations

Society

Nature

The universe


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Responding to the


Reactive responses:

Many firms simply react to changes in the

marketing environment.

Proactive responses:

Some firms attempt to manage themarketing environment via aggressive

actions designed to affect the publics and

forces in the marketing environment.


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Responding to the


Examples of proactive responses:

Hiring lobbyists

Running advertorials

Pressing law suits

Filing complaintsForming agreements to control channels


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Describe the environmental forces that affect thecompanys ability to serve its customers.

Explain how changes in the demographic andeconomic environments affect marketing decisions.

Identify the major trends in the firms natural andtechnological environments.

Explain the key changes in the political and culturalenvironments.

Discuss how companies can react to the marketingenvironment.

Rest Stop:Reviewing the Concepts


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All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

Copyright 2009 Pearson Education, Inc.Copyright 2009 Pearson Education, Inc.

Publishing as Prentice HallPublishing as Prentice Hall

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Analyzing the Marketin Environment

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