Lecture Principles of Marketing - Chapter 3: The marketing environment

This chapter describe the environmental forces that affect the company’s ability to serve its customers, describe the environmental forces that affect the company’s ability to serve its customers, identify the major trends in the firm’s natural and technological environments, explain the key changes in the political and cultural environments, discuss how companies can react to the marketing environment.

Chapter Three The Marketing Environment Roadmap: Previewing the Concepts Describe the environmental forces that affect the company’s ability to serve its customers Explain how changes in the demographic and economic environments affect marketing decisions Identify the major trends in the firm’s natural and technological environments Explain the key changes in the political and cultural environments Discuss how companies can react to the marketing environment Copyright 2007, Prentice Hall, Inc 3-2 Case Study McDONALD’S – Facing New Challenges Challenges Marketing Initiatives  Faces shifting consumer lifestyles and preferences for healthier foods  Low ratings of food and service quality  Atmosphere not upscale  Image is perceived as being uncultured, uncool, and unclassy by younger target markets  Focus on core competency of consistent products and reliable service  Offers upscale alternatives including McCafe and Bistro Gourmet  Eliminates “supersize,” offers healthier food options, and introduces Go Active! Adult Happy Meal Marketing Environment  Consists of actors and forces outside the organization that affect management’s ability to build and maintain relationships with target customers – Studying the environment allows marketers to take advantage of opportunities as well as to combat threats – Marketing intelligence and research are used to collect information about the environment Marketing Environment  Includes: – Microenvironment: actors close to the company that affect its ability to serve its customers – Macroenvironment: larger societal forces that affect the microenvironment • Considered to be beyond the control of the organization Marketing Environment  Actors in the microenvironment include: – The company itself – Suppliers – Marketing intermediaries – Customers – Competitors – Publics The Microenvironment  Company’s Internal Environment: – Areas inside a company – Affects the marketing department’s planning strategies – All departments must “think consumer” and work together to provide superior customer value and satisfaction The Microenvironment  Suppliers: – Provide resources needed to produce goods and services – Important link in the “value delivery system.” – Most marketers treat suppliers like partners The Microenvironment  Marketing intermediaries: – Help the company to promote, sell, and distribute its goods to final buyers • Resellers • Physical distribution firms • Marketing services agencies • Financial intermediaries The Microenvironment  Customers: – Five types of markets that purchase a company’s goods and services • Consumer • Business • Reseller • Government • International Demographic Environment  Generation Y: – 72 million born between 1977 and 1994 – Have large amount of disposable income – Comfortable with computer technology – Tend to be impatient and “Now-Oriented.” – Many product lines targeted at those who are part of Generation Y: • Teen and young adult games • Clothes, furniture, food Demographic Environment  Changing American family and household makeup: – Married couples with children = 34%, and falling – Married couples and people living with other relatives = 22% – Single parents = 12% – Single persons and adult “live-togethers” (also called nonfamily households) = 32% Demographic Environment  Geographic Shifts in Population: – 14% of U.S residents move each year – General shift toward the Sunbelt states – City to suburb migration continues – More people moving to “micropolitan” areas – More people telecommute • in people now work out of their home Demographic Environment  Better Educated Population: – 1980: • 69% of people over age 25 completed high school • 17% had completed college – 2003: • 85% of people over age 25 completed high school • 27% had completed college Demographic Environment  Greater White-Collar Population – 1950 – 1985: • White-collar workers increased from 41% to 54% while blue-collar workers decreased from 47% to 33% – 1983 – 1999: • Professionals and managers increased from 23% to greater than 30% – 2002 – 2012: • Professionals should increase by 25% while manufacturing is expected to increase 3% Demographic Environment  Increasing diversity: – U.S is a “salad bowl” mixing together various groups, each of which retains its ethnic and cultural differences • Ethnic segments are growing as a percentage of the U.S population and growth is projected to continue – Increased marketing efforts towards: • Gay and lesbian consumers • People with disabilities Economic Environment  Consists of factors that affect consumer purchasing power and spending patterns  Changes in Income – 1980s – consumption frenzy – 1990s – “squeezed consumer” – 2000s – value marketing  Income Distribution – – – – Upper class Middle class Working class Underclass Natural Environment  Involves natural resources that are needed as inputs by marketers or that are affected by marketing activities  Factors include: – Shortages of raw materials – Increased pollution – Increased government intervention – Environmentally sustainable strategies Technological Environment Most dramatic force shaping our destiny Changes rapidly Creates new markets and opportunities Challenge is to make practical, affordable products  Safety regulations result in higher research costs and longer time between conceptualization and introduction of product     Political Environment  Includes laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society  Areas of concern: – Increasing legislation – Changing government agency enforcement – Increased emphasis on ethics and socially responsible behavior Cultural Environment  The institutions and other forces that affect a society’s basic values, perceptions, preference, and behaviors – 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 • Marketers may be able to change secondary beliefs, but NOT core beliefs Cultural Environment  Society’s major cultural views are expressed in people’s views of: – Themselves – Others – Organizations – Society – Nature – The universe Responding to the Marketing Environment  Environmental Management Perspective – Taking a proactive approach to managing the environment by taking aggressive (rather than reactive) actions to affect the publics and forces in the marketing environment Responding to the Marketing Environment  Manage the environment by: – Hiring lobbyists – Running “advertorials” – Pressing law suits – Filing complaints – Forming agreements to control channels Rest Stop: Reviewing the Concepts Describe the environmental forces that affect the company’s ability to serve its customers Explain how changes in the demographic and economic environments affect marketing decisions Identify the major trends in the firm’s natural and technological environments Explain the key changes in the political and cultural environments Discuss how companies can react to the marketing environment Copyright 2007, Prentice Hall, Inc 3-33 ... Identify the major trends in the firm’s natural and technological environments Explain the key changes in the political and cultural environments Discuss how companies can react to the marketing environment. .. Government public Citizen-action public Local public General public Internal public The Macroenvironment  The company and all of the other actors operate in a larger macroenvironment of forces that shape... organization Marketing Environment  Actors in the microenvironment include: – The company itself – Suppliers – Marketing intermediaries – Customers – Competitors – Publics The Microenvironment