Tour9Chapter04

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens

Chapter 4

The Marketing Environment


“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



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



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



The Company’s Microenvironment

• The Company

• Suppliers

• Marketing Intermediaries



The Company’s Microenvironment



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”



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



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



The Company’s Macroenvironment

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



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



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



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



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



The Global Economy

Global economic dealings, such as currency exchange rates, have a large impact on

travel and tourism across the world



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



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



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



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



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



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



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



Environmental Scanning1. 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



Using Marketing Information

• Simple data collection is not sufficient

• Information must be:

– Reliable

– Timely

– Used in decision making



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?



Key Terms

• Demography

• Echo boomers (baby boomlet generation)

• Economic environment

• Environmental management perspective



Key Terms

• Financial intermediaries

• Generation X

• Macroenvironment

• Marketing environment



Key Terms• Marketing intermediaries

• Marketing services agencies

• Microenvironment

• Political environment

• Suppliers©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens

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