Chapter 4

The Marketing
Environment

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for Hospitality and Tourism, 4th edition

Kotler, Bowen, and Makens

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

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Chapter Objectives
List and discuss the importance of the
elements of the companys microenvironment
Describe the macroenvironmental forces that
affect the companys ability to serve its
customers
Explain how changes in demographic and
economic environments affect marketing and
describe the levels of competition
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Chapter Objectives
Identify the major trends in the firms 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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

The Companys
Microenvironment
The Company
Suppliers
Marketing Intermediaries

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

The Companys
Microenvironment

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

The Company
Marketing managers must work with all
departments of a company
All Departments have an impact on the
marketing departments plans and
actions
Think Consumer
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

The Companys Macroenvironment

(Adapted from Analysis for Market Planning, Donald R. Lehmann and Russell S. Winer, p. 22, 1994 by Richard D. Irwin.)
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

The Global Economy

Global economic dealings, such as currency
exchange rates, have a large impact on
travel and tourism across the world

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Cultural Environment
The cultural environment includes
institutions and other forces that affect
societys basic values, perceptions,
preferences, and behaviors
Persistence of cultural values
Subcultures
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Environmental Scanning
1. 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
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Using Marketing Information

Simple data collection is not sufficient

Information must be:

Reliable

Timely

Used in decision making

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

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?

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Key Terms
Demography
Echo boomers (baby boomlet
generation)
Economic environment
Environmental management
perspective
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Key Terms
Financial intermediaries
Generation X
Macroenvironment
Marketing environment

2006 Pearson Education, Inc.

Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Key Terms
Marketing intermediaries
Marketing services agencies
Microenvironment
Political environment
Suppliers
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens