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The Marketing
Environment
A Global PerspectiveA Global Perspective
33
Philip KotlerPhilip KotlerGary ArmstrongGary ArmstrongSwee Hoon AngSwee Hoon Ang
Siew Meng LeongSiew Meng LeongChin Tiong TanChin Tiong Tan
Oliver Yau HonOliver Yau Hon--MingMing
PowerPoint slides adapted byPeggy Su
Copyright 2009 Pearson Education South Asia Pte Ltd 3-1
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Learning Objectives
After studying this chapter, you should be able to:
1. Describe the environmental forces that affect thecompanys ability to serve its customers
2. Explain how changes in the demographic andeconomic environments affect marketing decisions
3. Identify the major trends in the firms natural andtechnological environments
4. Explain the key changes in the political and culturalenvironments
5. Discuss how companies can react to the marketingenvironment
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Chapter Outline
1. The Companys Microenvironment
2. The Companys Macroenvironemnt
3. Responding to the Marketing Environment
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The Marketing Environment
The marketing environment includes theactors and forces outside marketing that affectmarketing managements ability to build and
maintain successful relationships withcustomers.
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Marketing Environment
The microenvironment consists of the actorsclose to the company that affect its ability toserve its customers, the company, suppliers,marketing intermediaries, customer markets,competitors, and publics.
The Marketing Environment
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The Marketing Environment
Marketing Environment
The macroenvironment consists of the largersocietal forces that affect the
microenvironment. Demographic
Economic
Natural
Technological
Political
Cultural
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The Companys Microenvironment
The company
Suppliers
Marketing intermediaries
Customers
Competitors
Publics
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The Company
Internal environment includes:
Top management Finance
R&D
Purchasing Operations
Accounting
The Companys Microenvironment
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Suppliers
Provide the resources to produce goods andservices
Treated as partners to provide customer value
The Companys Microenvironment
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Marketing Intermediaries
Help the company to promote, sell, anddistribute its products to final buyers
Include:
Resellers
Physical distribution firms
Marketing services agencies
Financial intermediaries
The Companys Microenvironment
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Marketing Intermediaries
Resellers are the distribution channel firmsthat help the company find customers or makesales to them. These include:
Wholesalers
Retailers
Physical distribution firms are the distributionchannel firms that help the company to stockand move goods from their points of origin totheir final destination.
The Companys Microenvironment
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Marketing Intermediaries
Marketing service agencies are the marketingresearch firms, advertising agencies, media
firms, and marketing consulting firms that helpthe company target and promote its products tothe right markets.
Financial intermediaries include banks, creditcompanies, insurance companies, and otherbusinesses that help finance transactions orinsure against the risks associated with thebuying and selling of goods.
The Companys Microenvironment
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Customers
Customer markets consist of individuals andhouseholds that buy goods and services for
personal consumption.
Business markets buy goods and services forfurther processing or for use in their production
process.
The Companys Microenvironment
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Customers
Reseller markets buy goods and services toresell at a profit.
Government markets buy goods and servicesto produce public services or transfer goodsand services to others who need them.
International markets consist of buyers inother countries including consumers,producers, resellers, and governments.
The Companys Microenvironment
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Competitors
Firms must gain strategic advantage bypositioning their offerings against competitors
offerings. Each firm should consider its own size and
industry position compared to those of itscompetitors.
The Companys Microenvironment
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Publics
Any group that has an actual or potentialinterest in or impact on an organizations
ability to achieve its objectives: Financial publics
Media publics
Government publics
Citizen-action publics
The Companys Microenvironment
Local publics
General public
Internal publics
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Publics
Financial publics influence the companysability to obtain fundsbanks, investment
houses, and stockholders.
Media publics carry news, features, andeditorial opinionnewspapers, magazines, and
radio and television stations. Government publics influence product safety
and truth in advertising.
The Companys Microenvironment
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Publics
Citizen-action publics include consumerorganizations, environment groups, and
minority groups
Local publics include neighborhood residentsand community organizations
General publics influence the companyspublic image
Internal publics include workers, managers,volunteers, and directors
The Companys Microenvironment
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Demographic environment
Economic environment
Natural environment Technological environment
Political environment
Cultural environment
The Companys Macroenvironment
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Demographic Environment
Demography is the study of human populationsin terms of size, density, location, age, gender,race, occupation, and other statistics.
Demographic environment is importantbecause it involves people, and people make upmarkets.
Demographic trends include age, familystructure, geographic population shifts,educational characteristics, and populationdiversity.
The Companys Macroenvironment
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Demographic Environment
Changing Age Structure of the Population
Generational marketing is important in segmenting
people by lifestyle of life state instead of age.
The Companys Macroenvironment
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Demographic Environment
Changing Age Structure of the Population
Baby boomers include people born between
1946 and 1964 Includes most affluent Asians
The Companys Macroenvironment
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Demographic Environment
Changing Age Structure of the Population
Generation X includes people born between
1965 and 1976. They tend to:
Have high divorce rates
Are concerned about the environment
Respond to socially responsible companies
Are less materialistic
Emphasize quality of life
Consumer organizations, environment groups,and minority groups
The Companys Macroenvironment
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Demographic Environment
Changing Age Structure of the Population
Generation Y includes people born between 1977
and 1994. The Internet generation
The Companys Macroenvironment
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Demographic Environment
The Changing Asian Family
More people are:
Divorcing or separating Choosing not to marry
Choosing to marry later
Marrying without intending to
have children Higher divorce rates
Increased number of workingwomen
More stay-at-home dads
The Companys Macroenvironment
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The Companys Macroenvironment
Demographic Environment
Geographic Shifts in Population
Trends include:
Migratory movements between andwithin countries
Moving from rural to metropolitan areas
Changes in where people work
Telecommuting
Home office
Divorce or separation
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Demographic Environment
Changes in the Workforce
Trends include:
More educated
More white collar
More professional
The Companys Macroenvironment
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Demographic Environment
Increasing Diversity
Markets are becoming more diverse
International
National
Trends include:
Ethnicity
Gay and lesbian
Disabled
The Companys Macroenvironment
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Economic Environment
Economic environment consists of factors thataffect consumer purchasing power and spendingpatterns.
Subsistence economies consume most of their ownagriculture and industrial output.
Industrial economies are richer markets.
The Companys Macroenvironment
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Economic Environment
Changes in Income
Value marketing involves ways to offer financially
cautious buyers greater valuethe right combination ofquality and service at a fair price.
The Companys Macroenvironment
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Economic Environment
Changes in Income
Income distribution
Upper-class consumers
Middle-class consumers
Working-class consumers
Underclass consumers
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Economic Environment
Changes in ConsumerSpending Patterns
Ernst EngelEngels Law
As income rises:
Percentage spent on food declines
Percentage spent on housing remains constant
Percentage spent on savings increases
The Companys Macroenvironment
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Natural Environment
Natural environment involves the natural resourcesthat are needed as inputs by marketers or that are
affected by marketing activities. Trends
Shortages of raw materials
Increased pollution
Increased government intervention
Environmentally sustainable strategies
Green marketing
The Companys Macroenvironment
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Technological Environment
Most dramatic force in changing the marketplace withmany positive and negative effects
Rapid change
Provides new markets and new opportunities
Internet
Medicine
Miniaturization
Weapons
Credit cards
Communication
The Companys Macroenvironment
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Political Environment
Political environment consists of laws, governmentagencies, and pressure groups that influence or limitvarious organizations and individuals in a given
society.
The Companys Macroenvironment
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Political Environment
Legislation regulating business
Public policy to guide commercesets of laws and
regulations that limit business for the good of societyat large
Increasing legislation to:
Protect companies
Protect consumers
Protect the interests of society
The Companys Macroenvironment
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Political Environment
Increased Emphasis on Ethics and SociallyResponsible Actions
Socially responsible behavioroccurs when firmsactively seek out ways to protect the long-term interestsof their consumers and the environment
Cause-related marketing
The Companys Macroenvironment
Yukinobu Zengame
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Cultural Environment
The cultural environment consists of institutions and
other forces that affect a societys basic values,
perceptions, and behaviors.
The Companys Macroenvironment
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Cultural Environment
Persistence ofCultural 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.
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Cultural Environment
Shifts in Secondary Cultural Values
Major cultural values of a society are expressed in
peoples view of:
Themselves
Others
Organization
Society
Nature and the universe
The Companys Macroenvironment
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Cultural Environment
Shifts in Secondary Cultural Values
Peoples view of themselves
Yankelovich Monitors consumer segments:
Do-It-Yourselfersrecent movers
Adventurers
Peoples view of others
The Companys Macroenvironment
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Cultural Environment
Shifts in Secondary Cultural Values
Peoples view of organizations
Peoples view of society
Patriots defend it
Reformers want to change it
Malcontents want to leave it
The Companys Macroenvironment
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Cultural Environment
Shifts in Secondary Cultural Values
Peoples view of nature
Some feel ruled by it
Some feel in harmony with it
Some seek to master it
Peoples view of the universe
Renewed interest in spirituality
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Views on Responding
Uncontrollable
Reacting and adapting to forces in the environment
Proactive
Taking aggressive actions to affect forces in theenvironment
Reactive
Watching and reacting to forces in the environment
Responding to the Marketing
Environment