Chapter 3 - Analyzing The Marketing Environment

3
Chapter Outline
A. The Microenvironment
B. The Macroenvironment
1. Demographic Environment
2. Economic Environment
3. Natural Environment
4. Technological Environment
5. Political and Social Environment
6. Cultural Environment
C. Responding to the Marketing Environment
Copyright 2017 Pearson Education, Ltd
(Armstrong, Kotler & Opresnik)
A. The Microenvironment

1. The Company
All the interrelated groups form the internal

environment.
Departments share the responsibility for

understanding customer needs and creating
customer value.

2. Suppliers
Suppliers form an important link in the
company’s overall customer value delivery
network.
Suppliers provide the resources needed by the
company to produce its goods and services.

3. Marketing Intermediaries
Help company to promote, sell, and distribute its products to final buyers
Resellers
Physical Distribution Firms
Marketing services agencies
Financial intermediaries
4. Competitors
The market concept states that to be

successful, a company must provide greater
customer value and satisfaction than its
competitors do.

5. Publics
A public is any group that has an actual or potential
interest in or impact on an organization’s ability to achieve
its objectives.
7 types of publics – Financial publics (ability to obtain

funds); Media publics (carry news & editorial opinion);
Government publics (government developments into
account ); Citizen-action publics (marketing decisions may
be questioned by environmental groups); Local publics
(neighborhood residents); General public (image of the
company ); Internal publics (workers, managers).

6. Customers
5 types of customer markets:

• Consumer markets (individuals & households
that buy goods/services for personal
consumption)
• Business markets (buy goods/services for
further processing or for use in their production
process)
• Reseller markets (buy goods/services resell at
a profit)
6. Customers
5 types of customer markets:

• Government markets (made up of government
agencies that buy goods/ services to produce
public services)
• International markets (buyers in other countries)

B. The Macroenvironment

1. Demographic Environment
Demography: Study of human populations in

terms of size, density, location, age, gender,
race, occupation, and other statistics
Marketers analyze:
– Changing age and family structures
– Geographic population shifts
– Educational characteristics
– Population diversity
Changing Age Structure of the Population
Baby Generation Generation Generation

Boomers X Y Z

The Baby Boomers

• Born between 1946 and 1964, post
WW2.
• Account for about 35% of the U.S.
population but control an estimated
70% of the nation’s disposal income.

Generation X
• Born between 1965-1976.
• They are more skeptical bunch.
• They are the most educated generation to
date and they possess hefty annual
purchasing power. Family comes first and
less materialistic.
Generation Y
• Born between 1977-2000.
• Also called Millennials or echo boomers.
• They do not just embrace technology; it is a way
of life.
• They prefer to seek out information and engage
with brand in new way and prefer one-to-one brand
communication. Are the most financially strapped
generation.
Generation Z
• Born after the year 2000.
• Make up of kids, tweens and teens markets.
• In the US, Gen Zers spend an estimated $44 billion
annually and $200 billion of their parents’ spending.
• They comfort with digital technologies – even more
so than Millennials – “digital in their DNA”.
• Represent tomorrow’s market – now forming brand
relationships that affect future buying well.
Changing Age Structure of the
Population
Generational Marketing
• Defining people by their birth date may
be less effective than segmenting them
by their lifestyle, life stage, or the
common values they seek in the
products they buy.
Copyright 2017 Pearson Education, Ltd (Armstrong, Kotler & Opresnik)

The Changing Family Structure
The changing family from

traditional family to…..

The Changing American family
In the US:
• Married couples with children under 18 make up 19% of
the households
• Married couples without children make up 23%.
• Single parents comprise 14%.
• Nonfamily households make up 34%.
• Dual income household 60%.
• More man staying at home, 4% full-time dad.
• Number of working women has increased greatly – 69%.
• Increase consumption of child day-care business, career-oriented
women’s clothing and time-saving products and services.

Geographic Shifts in Population
• About 12% of all US residents move each year.
• 35% or more move every 5 years.
• Moving from rural to metropolitan areas and also
migration toward suburban area (Increase of
telecommute – work at home or remote office).

Changes in the US
Better
educated
Increased
white-collar
More
professional
population

Changes in the U.S.
Increasing Diversity
多元种族

• The United States has become more of a “salad

bowl” in which various groups have mixed
together but have maintained their diversity by
retaining important ethnic and cultural
differences.
• The US population is about 62.2% white, 17.4%
Hispanic, and 13.2% African American.
• The Asian American population now totals about
5% of the population.

• Another attractive diversity segment is the

57 million US adults with disabilities.
• Many major companies also target LGBT
with 6-7% of population & $830billion
buying power.

2. Economic Environment
The economic environment consists of

factors that affect consumer purchasing
power and spending patterns.

Changes in consumer spending
• In recent years, American consumers spent

freely, fueled by income growth, a boom in the
stock market, rapid increases in housing values
and other economic good fortunes.
• However, the free spending and high
expectations of those days were dashed by the
global economic crisis.
• Value marketing – Marketers offer just the right
combination of product quality and good
service at a fair price.
Copyright 2017 Pearson Education, Ltd (Armstrong, Kotler & Opresnik)
Income Distribution
• Over the past several decades, the rich have

grown richer, the middle class has shrunk and
the poor have remained poor.
• Changes in major economic variables such as
income, cost of living, interest rates and
savings and borrowing patterns, have a large
impact on the marketplace.

3. Natural Environment
Shortages of
Increased raw materials
pollution
Increase
government
intervention
A Need for
Environmental
Sustainability
The Natural Environment
• The natural environment involves the natural
resources that are needed as inputs by
marketers or that are affected by marketing
activities.
• Trends in natural environment – Shortages of
raw materials; Increased pollution and
Increased government intervention.
• Companies are developing strategies and
practices that support environmental
sustainability.
4. Technological Environment
The technological environment includes

forces that create new technologies,
creating new product and market
opportunities.

The Technological Environment
•The technological environment is the most
dramatic force now shaping our destiny.
•Technology has released such wonders as
antibiotics, robotic surgery, miniaturized
electronics, smartphones and the Internet.
•New technologies can offer exciting opportunities
for marketers; however, every new technology
replaces an old technology.
•The technological environment changes rapidly.
5. The Political and Social
Environment
Social responsibility
Increased and cause-related
legislation marketing

The Political and Social Environment
• The political environment consists of laws,

government agencies and pressure groups
that influence or limit various organizations
and individuals in a given society.
• Governments develop public policy to guide
commerce – sets of laws and regulations that
limit business for the good of society as a
whole.

• Business legislation has been enacted for a

number of reasons:
- Protect companies from each other
- Protect consumers from unfair business
practices
- Protect the interests of society against
unrestrained business behavior

• Socially responsible behavior -

Companies are encouraging their
managers to “do the right thing.” The boom
in online, mobile, and social media
marketing has created a new set of social
and ethical issues.
• Cause-related marketing - Many
companies are now linking themselves to
worthwhile causes.
6. The Cultural Environment
The cultural environment is made up of

institutions and other forces that affect a
society’s basic values, perceptions,
preferences and behaviors.

The Cultural Environment
The persistence of cultural values
• 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 to change.

Cultural Environment
• Marketers want to predict cultural shifts to
spot new opportunities or threats.
• Shifts in secondary cultural values of people’s
views about:
• Themselves
• Others
• Organizations
• Society
• Nature
• Universe
Copyright © 2017 Pearson Education, Ltd. 3-39
C. Responding to the Marketing
Environment
• Many companies view the marketing
environment as an uncontrollable element
to which they must react and adapt.
 Proactive
 Passive

Looking Ahead to Chapter 5
Understanding Consumer and
Business
Buyer Behavior

Chapter 3 - Analyzing The Marketing Environment

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Copyright 2017 Pearson Education, Ltd

All the interrelated groups form the internal

Departments share the responsibility for

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Physical Distribution Firms

Marketing services agencies

The market concept states that to be

Copyright 2017 Pearson Education, Ltd

7 types of publics – Financial publics (ability to obtain

Copyright 2017 Pearson Education, Ltd

5 types of customer markets:

5 types of customer markets:

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Demography: Study of human populations in

Baby Generation Generation Generation

Copyright 2017 Pearson Education, Ltd

The Baby Boomers

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd (Armstrong, Kotler & Opresnik)

The changing family from

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

• The United States has become more of a “salad

Copyright 2017 Pearson Education, Ltd

• Another attractive diversity segment is the

Copyright 2017 Pearson Education, Ltd

The economic environment consists of

Copyright 2017 Pearson Education, Ltd

• In recent years, American consumers spent

• Over the past several decades, the rich have

Copyright 2017 Pearson Education, Ltd

The technological environment includes

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

• The political environment consists of laws,

Copyright 2017 Pearson Education, Ltd

• Business legislation has been enacted for a

Copyright 2017 Pearson Education, Ltd

• Socially responsible behavior -

The cultural environment is made up of

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

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