Chapter Three

Analyzing the Marketing Environment

 Analyzing the Marketing
Environment
Topic Outline

• The Company’s Microenvironment

• The Company’s Macroenvironemnt
• Responding to the Marketing Environment
 The 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 customers
 The Marketing Environment

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’s
Microenvironment
Actors in the Microenvironment
 The Company’s
Microenvironment
The Company
• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting
 The Company’s
Microenvironment
Suppliers
• Provide the resources to produce goods
and services
• Treated as partners to provide customer
value
 The Company’s
Microenvironment
Marketing Intermediaries

Help the company to

promote, sell and
distribute its
products to final
buyers
 The Company’s
Microenvironment
Types of Marketing Intermediaries
________ include resellers, marketing service
agencies, and financial firms that help a
company to promote and sell its offerings to its
final customers.
1. Advertising agencies
2. Suppliers
3. Intelligence firms
4. Marketing intermediaries
________ include resellers, marketing service
agencies, and financial firms that help a
company to promote and sell its offerings to its
final customers.
1. Advertising agencies
2. Suppliers
3. Intelligence firms
4. Marketing intermediaries
Banks, insurance companies, and credit
companies that aid in financial transactions
are called ________.
1. financial intermediaries
2. marketing services agencies
3. physical distribution firms
4. positioning
Banks, insurance companies, and credit
companies that aid in financial transactions
are called _________.
1. financial intermediaries
2. marketing services agencies
3. physical distribution firms
4. positioning
 The Company’s
Microenvironment
Competitors
• Firms must gain strategic advantage by
positioning their offerings against
competitors’ offerings
 The Company’s
Microenvironment
Publics
• Any group that has an actual or
potential interest in or impact on
an organization’s ability to
achieve its objectives
– Financial publics
– Media publics
– Government publics
– Citizen-action publics
– Local publics
– General public
– Internal publics
Financial, media, government, and citizen-action
are several types of ________.
1. taxing authorities
2. legal departments
3. publics
4. marketing mix elements
Financial, media, government, and citizen-action
are several types of ________.
1. taxing authorities
2. legal departments
3. publics
4. marketing mix elements
A company’s ________ consists of its suppliers,
marketing intermediaries, customers,
competitors, and publics.
1. macroenvironment
2. microenvironment
3. business environment
4. marketing environment
A company’s ________ consists of its suppliers,
marketing intermediaries, customers,
competitors, and publics.
1. macroenvironment
2. microenvironment
3. business environment
4. marketing environment
 The Company’s
Macroenvironment
 The Company’s
Macroenvironment
Demographic Environment
Demography is the study of human populations
in terms of size, density, location, age, gender,
race, occupation, and other statistics
• Demographic environment is important
because it involves people, and people make
up markets
• Demographic trends include age, family
structure, geographic population shifts,
educational characteristics, and population
diversity
 The Company’s
Macroenvironment
Demographic Environment
• Changing age structure of the population
– Baby boomers include people born between
1946 and 1964
– Most affluent Americans
 The Company’s
Macroenvironment
Demographic Environment
• Generation X includes people born
between 1965 and 1976
– High parental divorce rates
– Cautious economic outlook
– Less materialistic
– Family comes first
– Lag behind on retirement savings
 The Company’s
Macroenvironment
Demographic Environment
• Millennials (gen Y or echo boomers) include
those born between 1977 and 2000
– Comfortable with technology
– Includes
• Tweens (ages 8–12)
• Teens (13–19)
• Young adults (20’s)
 The Company’s
Macroenvironment
Demographic Environment

Generational marketing is important in

segmenting people by lifestyle of life
state instead of age
 The Company’s
Macroenvironment
Demographic Environment
More people are:
• Divorcing or separating
• Choosing not to marry
• Choosing to marry later
• Marrying without intending to have
children
• Increased number of working women
• Stay-at-home dads
 The Company’s
Macroenvironment
Demographic Environment
• Growth in U.S. West and South
and decline in Midwest and
Northeast
• Moving from rural to
metropolitan areas
• Changes in where people work
– Telecommuting
– Home office
– Divorcing or separating
 The Company’s
Macroenvironment
Demographic Environment

• Changes in the Workforce

– More educated
– More white collar
 The Company’s
Macroenvironment
Demographic Environment
Increased Diversity

Markets are becoming more diverse

– International
– National
• Includes:
– Ethnicity
– Gay and lesbian
– Disabled
The baby boomer generation is made up of the
period ________.
1. 1960–1971
2. 1946–1964
3. 1980s
4. 1920–1929
The baby boomer generation is made up of the
period ________.
1. 1960–1971
2. 1946–1964
3. 1980s
4. 1920–1929
 The Company’s
Macroenvironment
Economic Environment
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
 The Company’s
Macroenvironment
Economic Environment
• Changes in income
• Value marketing involves
ways to offer financially
cautious buyers greater
value—the right
combination of quality and
service at a fair price
The “shop until you drop” mentality of the 1990s
has been replaced with a more ________
approach.
1. “save all you can”
2. “value is key”
3. “don’t shop at all”
4. “splurge regularly”
The “shop until you drop” mentality of the 1990s
has been replaced with a more ________
approach.
1. “save all you can”
2. “value is key”
3. “don’t shop at all”
4. “splurge regularly”
 The Company’s
Macroenvironment
Economic Environment
Changes in Consumer Spending Patterns

• Ernst Engel—Engel’s Law

• As income rises:
– The percentage spent on food declines
– The percentage spent on housing remains
constant
– The percentage spent on savings increases
 The Company’s
Macroenvironment
Natural Environment
Natural environment involves the natural
resources that are needed as inputs by
marketers or that are affected by marketing
activities
• Trends
– Shortages of raw materials
– Increased pollution
– Increase government intervention
– Environmentally sustainable strategies
There are three trends in the natural environment that marketers
are monitoring. These are ________, ________, and ________.
1. shortages of raw materials; increased legislation; increased
consumerism
2. the green movement; shortages of raw materials;
increased pollution
3. increased pollution; increased government intervention;
shortages of raw materials
4. increased consumerism; increased population; increased
ethical expectations
There are three trends in the natural environment that marketers
are monitoring. These are ________, ________, and ________.
1. shortages of raw materials; increased legislation; increased
consumerism
2. the green movement; shortages of raw materials;
increased pollution
3. increased pollution; increased government intervention;
shortages of raw materials
4. increased consumerism; increased population; increased
ethical expectations
 The Company’s
Macroenvironment
Technological Environment

• Most dramatic force

in changing the
marketplace
• Creates new products
and opportunities
• Safety of new
product always a
concern
 The Company’s
Macroenvironment
Political Environment

Political environment consists of laws,

government agencies, and pressure groups
that influence or limit various organizations
and individuals in a given society
 The Company’s
Macroenvironment
Political Environment
• Legislation regulating business
– Increased legislation
– Changing government agency
enforcement
• Increased emphasis on ethics
– Socially responsible behavior
– Cause-related marketing
Which of the following is not one of the reasons
business legislation is enacted?
1. To protect companies from each other
2. To protect companies from consumers
3. To protect consumers from unfair business
practices
4. To protect the interests of society
Which of the following is not one of the reasons
business legislation is enacted?
1. To protect companies from each other
2. To protect companies from consumers
3. To protect consumers from unfair business
practices
4. To protect the interests of society
In exercising their corporate social responsibility
and building a more positive image, companies
are now linking themselves to worthwhile
causes. This is referred to as ________.
1. marketing mix
2. marketing concept
3. cause-related marketing
4. Engel’s Law
In exercising their corporate social responsibility
and building a more positive image, companies
are now linking themselves to worthwhile
causes. This is referred to as
__________________.
1. marketing mix
2. marketing concept
3. cause-related marketing
4. Engel’s Law
 The Company’s
Macroenvironment
Cultural Environment

Cultural environment consists of institutions

and other forces that affect a society’s basic
values, perceptions, and behaviors
 The Company’s
Macroenvironment
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 people’s views of
themselves, others, organization, society,
nature, and the universe
 The Company’s
Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values

• People’s view of themselves

– Yankelovich Monitor’s consumer
segments:
• Do-it-yourselfers—recent movers
• Adventurers
• People’s view of others
– More “cocooning”
Yankelovich identifies consumer segments whose
purchases are motivated by self-views. Two
examples are _________ and __________.
1. Generation M; generation N
2. Refilled nests; do-it-yourselfers
3. Do-it-yourselfers; adventurers
4. marketing mix; positioning
Yankelovich identifies consumer segments whose
purchases are motivated by self-views. Two
examples are _________ and __________.
1. Generation M; generation N
2. Refilled nests; do-it-yourselfers
3. Do-it-yourselfers; adventurers
4. marketing mix; positioning
 The Company’s
Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values
• People’s view of organizations
• People’s view of society
– Patriots defend it
– Reformers want to change it
– Malcontents want to leave it
 The Company’s
Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values

• People’s view of nature

– Some feel ruled by it
– Some feel in harmony with it
– Some seek to master it
• People’s view of the universe
– Renewed interest in spirituality
A woman who drives a hybrid car, consistently
recycles, and buys “earth-friendly” products is
acting out her view of ________.
1. cost
2. non-profit organizations
3. others
4. nature
A woman who drives a hybrid car, consistently
recycles, and buys “earth-friendly” products is
acting out her view of ________.
1. cost
2. non-profit organizations
3. others
4. nature
Which of the following are included in the major
forces affecting a company’s
macroenvironment?
1. Marketing mix, positioning, price
2. cultural, political/legal, economic
3. Marketing concept, goal setting, cultural
4. Baby boomers, minimum wage rates,
product/service
Which of the following are included in the major
forces affecting a company’s
macroenvironment?
1. Marketing mix, positioning, price
2. Cultural, political/legal, economic
3. Marketing concept, goal setting, cultural
4. Baby boomers, minimum wage rates,
product/service
Responding to the Marketing
Environment
Views on Responding
A company has several options with regard to its
marketing environment. A strong company
takes a(n) ________ approach.
1. proactive
2. reactive
3. ingenuous
4. peaceful
A company has several options with regard to its
marketing environment. A strong company
takes a(n) ________ approach.
1. proactive
2. reactive
3. ingenuous
4. peaceful
A company’s macroenvironment consists of all of
the following except ________.
1. demographic forces
2. economic forces
3. competitive forces
4. technological forces
A company’s macroenvironment consists of all of
the following except ________.
1. demographic forces
2. economic forces
3. competitive forces
4. technological forces
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