3.

Analyzing the marketing environment

Marketing environment
= actors and forces outside marketing that affect marketing managements
ability to build and maintain succesful relationships with target customers
Need to be environmental trend trackers and opportunity seekers by
disciplined methods: marketing research and intelligence
1. The companys microenvironment
- Microenvironment consists of the actors close to the company that
affect its ability to serve its customers, the company, suppliers,
marketing intermediaries, customer markets, competitors and
publics.

The company
Top management
Finance
R&D
Purchasing
Operations
Accounting
- Suppliers
Provide the resources to produce goods and services.
Treat as partners to provide customer value.
Need to watch supply availability and cost
Toyota: sees their suppliers as partners: help improve its own quality,
reduce costs and quickly develop new products
- Marketing intermediaries
= Help the company to promote, sell and distribute its products to
final buyers.
Types of marketing intermediaries:
Resellers
=distribution channel firms that help the company find customers
or make sales to them
Physical distribution firms
=help the company stock and move goods from their point of
origin to their destination

2.

Marketing services agencies

=marketing research firms, advertising agencies, media firms and
marketing consulting firms that help the company target and
promote products to the right markets
Financial intermediaries
=banks, credit companies, insurance companies and other
businesses that help finance transactions or insure against the risks
associated with the buying and selling of goods
Coca cola analyses the demographics of local markets
To retail partners: we know youre passionate about delighting quest
and enhancing their real experiences on every level
- Competitors
= Firms must gain strategic advantage by positioning
their offerings against competitors offerings.
Need to consider size and industry position
- Publics
= Any group that has an actual or potential interest
in or impact on an organisations ability to achieve its objectives
o Financial publics : obtain funds
o Media publics:news, features and editorial opinion
o Government publics: consult companies lawyers on rules
o Citizen-action publics: consumer org, env. Groups, minority groups
o Local publics: neighborhood residents and community
organisations
o General public: image of the company
o Internal publics: workers, managers, volunteers and board of
directors
Take into account if they want specific response such as goodwill,
favourable word of mouth or donations of time or money
- Customers
Consumer markets
Individuals and households that buys goods and services for
personal consumption
Business markets
=for use in production process
Government markets
= to produce public services or transfer the goods and services to
those who need them
International markets
=buyers in other countries
resellers market: to resell at profit
Each market has special characteristics
The companys macroenvironment

3. The demographic marketing environment

- Demographic environment
Demography: the study of human populationssize, density,
location, age,
gender, race, occupation and otherstatistics.
Demographic environment:
= involves people, and people make up markets.
World population growth
higher life expectancy
Changing age structure of the population
A youthful population ensures that they will continue to enjoy
a big supply of young workers supporting a relatively small
population of elderly people
A. Baby boomers include people born between 1946 and 1964.
o Most affluent Americans.
Think young
See themselves as entering new life phases
ex financial service industry: retirement planning and
money management, anti-aging products
B. Generation X includes people born between 1965 and 1976
o High parental divorce rates
o Cautious economic outlook
research products before they buy them
o Less materialistic
prize experiences, not acquisitions
prefer quality to quantity
o Family comes first
C. Millennials (Generation Y or echo boomers) include those
born between 1977 and 2000
o Comfortable with technology = way of life
o Tweens (ages 812)
o Teens (1319)
o Young adults (20s)
Seek out information and engage in two-way brand
conversations

D. Generational marketing is important in segmenting people by

lifestyle of life state instead of age
Changing family structure:
o divorcing or separating
o choosing not to marry
o choosing to marry later
o marrying without intending to have children
o increasing number of working women
increased consumption of carreer-oriented womens
clothing, financial
services, convenience food..
Ex: Britisch beer brewers: Blue moon beer served with a
slice of ange to accentuate its fruity taste
Ex: lego Friends: create scenario for story-telling , rather
than just create the model pictured on the box
o increasing number of stay-at-home dads.
o youth market
young persons remaining at home with their parents far
longer
internet: global youth culture of sharing responses to
marketing message
and purchasing behavior across conventional geographic
boundaries
Job crisis can make a lost generation
and high long-term youth unemployment is associated
with growing unrest
Geographic shifts in population and market diversity
Migration (e.g. from Eastern Europe to Britain and other
Western European nations)
Impact on the location of market demand (where people can
be reached) and nature of demand for products and services
(the needs for people in new situations)
Move from rural to metropolitan areas
Change in where people work : Telecommuting; Home office
Changes in the workforce : More educated; More white collar
Demographic trends: shifts in age, family structure, geographic
population, educational characteristics and population diversity.
demographic environment increased diversity
Markets are becoming more diverse
o International
o National
Includes:
o Ethnicity

ex Mecca Cola
o Gay and lesbian
=double-income households
ex: gay friendly advertising by travelling agencies (travel
more), gay lifestyle magazines
o disabled
target in particular or Mcdonalts, Nike, Honda have featured
people with disabilities in their mainstream advertising

E. The economic environment

= consists of factors that affect consumer purchasing power and
spending patterns.
Industrial economies are richer markets.
Subsistence economies consume most of their own
agriculture and industrial output
can be an outstanding marketing opportunity for the right kind of
products
BRIC= Brazil, Russia, India, China
newly-rich and rapidly expanding countries
- Value marketing offering financially cautious buyers greater value
the right combination of quality and service at a fair price.
Ex: aldi & little successful in growing business in economic downturn,
with the intention of retaining the new customers they acquired from
more expensive competitors
Income distribution: ex China the new wealthy are an attractive target
for luxury brands
F. The natural environment
= natural resources that are needed as inputs by marketers or that are
affected by marketing activities
- Trends:
o Increased shortages of raw materials (renewable and nonrenewable resources)
o Increased pollution
disposal of chemical and nuclear waste
o Increased government intervention
increased regulations and pressure from lobby groups
o Increased environmentally sustainable strategies.
=developing strategies and practices that create a world economy
that the planet can support indefinitely
Ex PepsiCo : solar-panel field, wind turbines
Learn that environmentally responsible actions can also be good
business
G. The technological environment

Most dramatic force in changing the marketplace.

Ex use of RFID transmitter: radio frequency identification
- New products and opportunities.
- Concern for the safety of new products (safety standards)
Research teams
fantasy products the challenge is not technical but commercial: to
make more practible, affordable versions of these products
H. The political and social environment
- Political environment consists of laws, government agencies and
pressure groups that influence or limit various organisations and
individuals in a given society.
Legislation regulating business
o Increased legislation
European Union, in addition to those countries own
legislations
Constantly changing
marekters need to know about the major laws protecting
competition, consumers and society. They need to
understand these laws at national and IN level
Protect companies : define and prevent unfair competition
Protect consumers: from unfair business practices
Protect interest of society: against unrestrained business
behavior
=take responsibility for the social costs of their production
or products
Ex Ike: barrier in Indias legal requirements for single-brand
retailers to source 30 % of their goods from local small or
medium-sized companies in India
o Changing government agency enforcement.
Control business behavior through influence and negotiation
and sometimes direct action
Ex Google pulled its web engine out of China
Increased emphasis on ethics
o Socially responsible behavior
Protect long run interests of their consumers and the
environment
The boom in internet marketing has created a new set of
social and ethical issues
ex online privacy, legitimate businesses plant cookies on
consumers PC and collect, analyze and share digital data
from every move consumers make on their website
o Cause-related marketing.

Linking themselves to worthwhile causes to exercise their

social responsibility and build more positive images
value-led business or caring capitalism, their mission is
to make the world a better place
Benefits both company and cause:
Companies gain an effective marketing tool while building
a more positive public image while the charitable
organization or cause gains greater visibility and important
new sources of funding and support
I. The cultural environment
= consists of institutions and other forces that affect societys basic
values, perceptions
preference and behaviour.
Cultural environment persistence of cultural values
- Core beliefs and values are persistent and 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 and include
peoples views
of themselves, others, organization, society, nature and the
universe.
- Shifts in secondary cultural values: marketers want to predict
cultural shifts to spot new opportunities and threats
- Peoples views of themselves: vary in their emphasis on serving
themselves vs serving others : personal pleasure, self-realization
through religion, avid pursuit of careers..
- Peoples view of others: new wave of cocooning or nesting
the instability of the economy creates uncertainty for consumers
and this uncertainty tends to make them focus more on being homa
and finding ways to save money. It creates the return to traditional
values
- Peoples views on organizations: their attitudes towards corporations,
government agencies, trade unions, universities and other
organisations
Trend of loss in big business, people see work not as a source
of satisfaction but as way to earn money to enjoy their nonworking hours
- Peoples view on society
- Peoples view on nature: finite and fragile, trend of lifestyle of health
and sustainability

Peoples views of the universe: beliefs about the origin of the

universe and their place in it. Spirituality, search for inner purpose,
seek more permanent values
J. Responding to the marketing environment
Proactive approach: craft a strategy that defines your environment
Ex advertorials (expressing editorial points of view) to shape public
opinion
Reactive approach: marketing environment is an uncontrollable
element to which we must react and adapt
ex companies will have little effect in trying to influence geographic
population shifts, the economic environment or major cultural values
Different use of online rumor mill
Ex trying to prevent or counter negative mouth to mouth of
seeing it as something they cannot control
Mcdonalts : Mc stories supposed to be promoting tweets but
backfired and became critics