Principles of Marketing

Eighteenth Edition, Global Edition

Chapter 3
Analyzing the Marketing
Environment

Copyright © 2021 Pearson Education Ltd.

Learning Objectives
3.1 Describe the environmental forces that affect the
company’s ability to serve its customers.
3.2 Explain how changes in the demographic and economic
environments affect marketing decisions.
3.3 Identify the major trends in the firm’s natural and
technological environments.
3.4 Explain the key changes in the political and cultural
environments.
3.5 Discuss how companies can react to the marketing
environment.

Copyright © 2021 Pearson Education Ltd.

MICROSOFT: Adapting to the Fast-
Changing Marketing Environment
“Microsoft has undergone a
dramatic transformation to better
align itself with the new digital
world. More than just making the
software that makes PCs run,
Microsoft now wants to empower
every person and every
organization on the planet to
achieve more, regardless of what
device or operating system they
use.”

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A Company’s Marketing Environment
The marketing environment includes the actors and forces
outside marketing that affect marketing management’s ability
to build and maintain successful relationships with target
customers.

Copyright © 2021 Pearson Education Ltd.

Learning Objective 1
Describe the environmental forces that affect the company’s
ability to serve its customers.

Copyright © 2021 Pearson Education Ltd.

The Microenvironment and
Macroenvironment (1 of 2)
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.

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The Microenvironment and
Macroenvironment (2 of 2)
Macroenvironment consists of the larger societal forces
that affect the microenvironment—demographic, economic,
natural, technological, political, and cultural forces.

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The Microenvironment (1 of 8)
Figure 3.1 Actors in the Microenvironment

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The Microenvironment (2 of 8)
The Company

In designing marketing plans, marketing management takes

other company groups into account.
• Top management
• Finance
• Research and development (R&D)
• Information technology
• Purchasing
• Operations
• Human resources
• Accounting

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The Microenvironment (3 of 8)
Suppliers

• Provide the resources to produce goods and services

• Treat as partners to provide customer value
Suppliers: Giant furniture
retailer IKEA doesn’t just buy
from its suppliers. It involves
them deeply in the process of
delivering the trendy but
simple and affordable home
furnishings to create a better
everyday life for its
customers.

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The Microenvironment (4 of 8)
Marketing Intermediaries Partnering with
intermediaries: Apple
Marketing intermediaries provides its retail partners
are firms that help the with much more than phones
company to promote, sell, and smartwatches. It also
and distribute its goods to pledges technical support.
final buyers.

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The Microenvironment (5 of 8)
Marketing Intermediaries
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries

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The Microenvironment (6 of 8)
Competitors

Firms must gain strategic advantage by positioning their

offerings strongly against competitors’ offerings in the minds
of consumers.

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The Microenvironment (7 of 8)
Publics Publics: NatWest shows its
commitment to its local community by
Any group that has an actual or giving generously to local charities,
potential interest in or impact on community groups, and social
an organization’s ability to enterprises.
achieve its objectives. They
inlcude:
• Financial publics
• Media publics
• Government publics
• Citizen-action publics
• Local publics
• General public
• Internal publics

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The Microenvironment (8 of 8)
Customers

• Consumer markets
• Business markets
• Reseller markets
• Government markets
• International markets

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The Macroenvironment
Figure 3.2 Major Forces in the Company’s
Macroenvironment

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Learning Objective 2
Explain how changes in the demographic and economic
environments affect marketing decisions.

Copyright © 2021 Pearson Education Ltd.

The Demographic and Economic
Environments (1 of 6)
The Demographic Environment
• Demography is the study of human populations—size,
density, location, age, gender, race, occupation, and other
statistics.
• Demographic environment involves people, and people
make up markets.
• Demographic trends include changing age and family
structures, geographic population shifts, educational
characteristics, and population diversity.

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The Demographic and Economic
Environments (2 of 6)
The Demographic Environment

• Baby Boomers – born 1946 to 1964

• Generation X – born between 1965 and 1980
• Millennials – born between 1981 and 1996
• Generation Z – born between 1997 and 2012
• Generation Alpha – born after 2012

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The Demographic and Economic
Environments (3 of 6)
The Demographic Environment
Generational marketing is important in segmenting people
by lifestyle or life stage instead of age.
Generational marketing:
Baby boomers and
millennials are now
moving over to make room
for younger Generation
Alpha.

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The Demographic and Economic
Environments (4 of 6)
The Demographic Environment

• The changing American Working remotely: Apps like Slack let

people working remotely collaborate
family
anywhere and everywhere through the
• Geographic shifts in internet and mobile devices.
population
• A better-educated, more
white-collar, more
professional population
• Increasing diversity

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The Demographic and Economic
Environments (5 of 6)
The Demographic Environment
Targeting consumers with
disabilities: Toyota’s “Start
Your Impossible” campaign
included ads highlighting
inspirational real-life stories of
athletes who overcame
mobility challenges, such
Paralympic gold medalist
alpine skier Lauren
Woolstencroft.

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The Demographic and Economic
Environments (6 of 6)
The Economic Environment
• Economic environment: Economic factors that affect consumer
purchasing power and spending patterns.
Consumers adopted a new back-to-basics sensibility in their
lifestyles and spending patterns. To serve the tastes of these more
financially frugal buyers, companies like Target are emphasizing
the “pay less” side of their value propositions.

Copyright © 2021 Pearson Education Ltd.

Learning Objective 3
Identify the major trends in the firm’s natural and
technological environments.

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The Natural and Technological
Environments (1 of 4)
The Natural Environment

The natural environment is the physical environment and

the natural resources that are needed as inputs by
marketers or that are affected by marketing activities.

Copyright © 2021 Pearson Education Ltd.

The Natural and Technological
Environments (2 of 4)
The Natural Environment

Trends in the Natural Environment

• Growing shortages of raw materials
• Increased pollution
• Increased government intervention
• Developing strategies that support environmental
sustainability

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The Natural and Technological
Environments (3 of 4)
The Natural Environment The natural environment:
Environmental sustainability Walmart has emerged in recent
involves developing strategies years as the world’s super “eco-
and practices that create a world nanny” through its own
economy that the planet can sustainability practices and its
support indefinitely. impact on the actions of its
huge network of suppliers.

Copyright © 2021 Pearson Education Ltd.

The Natural and Technological
Environments (4 of 4)
The Technological Marketing technology: Disney
Environment takes full advantage of digital
technology in creating magical
• Most dramatic force in
customer experiences at its
changing the marketplace
Walt Disney World Resort.
• Creates new products,
opportunities
• Concern for the safety of new
products

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Learning Objective 4
Explain the key changes in the political and cultural
environments.

Copyright © 2021 Pearson Education Ltd.

The Political-Social and Cultural
Environments (1 of 5)
The Political and Social Environment

The political environment includes laws, government

agencies, and pressure groups that influence or limit various
organizations and individuals in a given society.

Legislation regulating business is intended to protect

• companies from each other
• consumers from unfair business practices
• the interests of society against unrestrained business
behavior

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The Political-Social and Cultural
Environments (2 of 5)
The Political and Social Environment
• Increased emphasis on ethics
and socially responsible
actions Cause-related marketing: Ben &
• Cause-related marketing Jerry’s three-part “linked
prosperity” mission drives it to
make fantastic ice cream (product
mission), manage the company for
sustainable financial growth
(economic mission), and use the
company “in innovative ways to
make the world a better place”
(social mission). Both Ben & Jerry’s
and its products are “Made of
Something Better.”
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The Political-Social and Cultural
Environments (3 of 5)
The Cultural Environment
The cultural environment consists of institutions and other
forces that affect a society’s basic values, perceptions, and
behaviors.

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Cause-Related Marketing: Linking
Brands, Consumers, and Causes
Aerie’s #AerieREAL campaign
pledges that it will use only
unretouched images and
videos of real women in its ads
and other marketing content.
The cause of body positivity
and inclusivity is an integral
part of the brand’s identity.

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The Political-Social and Cultural
Environments (4 of 5)
The Cultural Environment
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 people’s views of themselves, others, organizations,
society, nature, and the universe.

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The Political-Social and Cultural
Environments (5 of 5)
Catering to the natural, organic,
The Cultural Environment and ethical products trend:
Unilever’s Love Beauty and
Shifts in Secondary Cultural
Planet brand has one goal: “To
Values
make you more beautiful and give
• People’s views of themselves a little love to our planet.”

• People’s views of others

• People’s views of organizations
• People’s views of society
• People’s views of nature
• People’s views of the universe

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Learning Objective 5
Discuss how companies can react to the marketing
environment.

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Responding to the Marketing
Environment
Views on Responding

• Uncontrollable
– React and adapt to forces in the environment
• Proactive
– Take aggressive actions to affect forces in the
environment
• Reactive
– Watch and react to forces in the environment

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Real Marketing 3.2: In the Social Media
Age: When the Dialogue Gets Nasty
Today’s empowered consumers: Whole Foods Market’s
decision to put single pre-peeled oranges in individual plastic
containers caused a viral storm of #OrangeGate tweets.
However, the retailer averted the potential PR disaster by
responding within hours with its own humorous, self-critical
social media posts admitting its mistake.

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