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Analysing the Marketing Enviroment 3

Chapter 3
by

Mario Mata

on 9 May 2014

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Transcript of Analysing the Marketing Enviroment 3

photo credit Nasa / Goddard Space Flight Center / Reto Stöckli
Examples of proactive responses:
Hiring lobbyists
Running “advertorials”
Pressing lawsuits
Filing complaints with regulators
Forming agreements to control channels
Responding to the
Marketing Environment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Reactive responses:
Many firms are passive & simply react to changes in the marketing environment.
Proactive responses:
Some firms attempt to manage the marketing environment via aggressive actions designed to affect the publics and forces in the marketing environment.
Responding to the
Marketing Environment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
People’s self views: In its ads Kenneth Cole targets fashion individualists using the slogan, “25 years of non-uniform thinking.”
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Society’s major cultural views are expressed in people’s views of:
Themselves
Others
Organizations
Society
Nature
The universe
Cultural Environment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Cause-related marketing efforts exemplify many firms’ social responsibility.
For every pair of shoes bought from TOMS, the firm donates a pair to a child in need. Doing good is part of the corporate mission.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Includes laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.
Marketing activities face:
Increasing legislation.
Changing government agency enforcement.
Increased emphasis on ethics and socially responsible behavior (including cause-related marketing).
Political Environment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Technological Environment
Changes rapidly, creating new markets and opportunities and/or danger of products becoming obsolete.
Challenge is to make practical, affordable new products.
Government bans unsafe products and sets safety standards, resulting in higher research costs, and longer time to market for new products.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
PepsiCo is working to reduce its environmental footprint. For example, a solar-panel field now generates three-quarters of the heat used in Frito-Lay’s Modesto, California, SunChips plant.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Involves natural resources that are needed as inputs by marketers or that are affected by marketing activities.
Key trends include:
Shortages of raw materials.
Increased pollution.
Increased government intervention.
Many firms now focus on creating environmentally sustainable strategies.
Natural Environment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Demographic Environment
Geographic shifts in population:
13% of U.S. residents move each year.
General shift toward the Sunbelt states.
City to suburb migration continues.
More people are moving to suburbs and “micropolitan” areas.
Marketers court increasing numbers of telecommuters.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Demographic Environment
Increasing diversity:
Marketing efforts are increasing toward:
Gay and lesbian consumers.
People with disabilities.
Example: Ford highlights its Mobility Motoring program at disaboom.com
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Demographic Environment
Increasing white-collar population
1983—2007:
Professionals and managers grew from 23% to greater than 35%.
2006—2016:
Professionals should increase by 23% while manufacturing is expected to decline by more than 10%.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Demographic Environment
Better educated population:
1980:
69% of people over age 25 completed high school; 17% had completed college.
2007:
84% of people over age 25 completed high school; 27% had completed college.
Demand for quality products, books, magazines, computers, travel, etc. has increased as a result.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The American family and household makeup is changing:
Traditional households are in decline:
Married couples with children = 23%
Non-traditional households are growing:
Married without children = 29%
Single parents = 16%
Non-family households = 32%
Special needs of non-traditional households are increasingly being considered by marketers.
Demographic Environment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The Obama campaign reached Millenials using cutting-edge social media and optimized the my.barack.obama.com web site to appeal to Millenials.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Gen Xers face many economic pressures; many are in debt and are behind in saving for retirement.
Schwab’s “Talk to Chuck” campaign speaks directly to Gen Xers and promotes solutions linked with their approach to savings.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Baby boomers:
78 million people born between 1946 and 1964; nearly 25% of population.
Wealthiest generation in history; account for 50% of consumer spending and hold ¾ of the nation’s financial assets.
Recent recession has hit baby boomers hard, eating into nest eggs and retirement prospects.
Boomers “think young”; represent strong targets for financial services.
Demographic Environment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Marketers track changing age and family structures, educational characteristics, geographic population shifts, and population diversity at home and abroad.
A great deal of domestic demographic data stems from the U.S. Census.
Visit www.census.gov and select the American Fact Finder to learn more about your community.
Marketing In Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 3.2:

Actors in the Macroenvironment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The Microenvironment
Customers:
Companies may target any or all of the types of markets that may purchase a company’s goods and services.
Consumer
Business
Reseller
Government
International
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The Avon Foundation’s long-running Walk for Breast Cancer efforts recognize the importance of community publics.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Types of Publics:
Financial public
Media public
Government public
Citizen-action public
Local public
General public
Internal public
Publics:
Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives.
The Microenvironment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The Microenvironment
Competitors:
Marketers must seek to gain strategic advantage against competitive organizations.
Size of firm and industry position will influence choice of strategy.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
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
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Visit ToyotaSupplier.com web site

Toyota partners with its suppliers and helps them meet its high expectations.
Creating satisfied suppliers helps Toyota produce lower-cost, high quality cars, which in turn result in more satisfied customers.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The Microenvironment
Suppliers:
Important link in the overall customer value delivery system.
Provide resources needed to produce goods and services.
Most marketers treat suppliers like partners in creating and delivering customer value.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 3.1:

Actors in the Microenvironment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Studying the marketing environment allows marketers to take advantage of opportunities and to combat threats.
Marketing intelligence and research are used to collect information about the environment, including customers and the competition.
Both the macroenvironment and microevironment are important.

Marketing Environment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Chapter 3
Analyzing the Marketing Environment
Copyright © 2011 Pearson Education, Inc.  
Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
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.
The institutions and other forces that affect a society’s basic values, perceptions, preferences, 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
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
TOM SHOES Marketing or Movement ?
Fuel for Thought
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Technology is the most dramatic force shaping our destiny. How can RFID impact the future of marketing?
Technological Environment
Economic factors affect consumer purchasing power and spending patterns.
Income distribution
Upper class is getting wealthier .
Middle class is shrinking.
Underclass remain poor.
Income distribution has created a tiered market.
Changes in income
1990s—consumption frenzy, record debt
Economic crisis leads to consumer frugality.
Value marketing is key to success.
Economic Environment
Demographic Environment
Increasing diversity:
The United States is an ethnic “salad bowl.”
Ethnic segments will continue to grow as a percentage of the U.S. population.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Peapod, the nation’s leading internet grocer, allows busy parents to order more than 8,000 grocery items online and have them delivered to home.

Can you think of another example of how marketer’s have altered an existing product or service, or created something new to satisfy the unique needs of non-traditional households?
Fuel for Thought
Generation X:
49 million born between 1965 and 1976.
Defined by shared experiences:
Increased parental divorce rates and more employed mothers made Generation X the first of the latchkey kids.
Less materialistic; prize experiences.
Skeptical of marketing.
Most educated generation to date.
Spend carefully; face economic pressures.
Demographic Environment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Demographic Environment
Demography:
The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The Microenvironment
The company itself:
Areas/departments inside of a company.
Affects the marketing department’s planning and strategies.
All departments must “think consumer” and work together to provide superior customer value and satisfaction.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Consists of actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.
Marketing Environment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Rethinking, Reinventing

Redefined Mission: To be the “World’s leading document-management technology and services enterprise.”
Customer Focus: Focus group research aids in new product development; top managers serve as “Customer Officer of the Day”; 100 innovative offerings introduced in the last few years.
Corporate Image: New logo was chosen to symbolize Xerox’s strengths while portraying firm as modern, innovative and flexible.
Visit Xerox.com

First Stop
The Revitalization of Xerox
Price of Complacency

Beginnings: Xerox invented the plain paper office copier 50 years ago and came to dominate the market.
The Changing Environment: Xerox failed to adapt to new customer needs for digital document management systems, rather than copiers. The sales force was ill-equipped to detail with info technology managers. Stock prices plummeted and Xerox was on the brink of bankruptcy in 2001.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Rest Stop: 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 2011, Pearson Education Inc., Publishing as Prentice-Hall
Earthbound Farm has become the world’s largest producer of organic salads, fruits and vegetables, with products in 75% of America’s Supermarkets.
Marketing in Action
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Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Tata Motors targeted India’s growing middle class with the small, affordable Tata Nano, a car designed to put the developing nation on wheels.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Reaching Generation Y can be challenging as this group is often highly skeptical of marketing messages.
To learn how BrassMedia targets Generation Y, visit YouTube and watch the video entitled, “Reaching Generation Y” (5:08)
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Demographic Environment
Millennials (Gen Y / Echo Boomers):
83 million born between 1977 and 2000—larger than baby boomer segment.
Includes tweens, teens, and young adults.
$733 billion in purchasing power.
Ethnically diverse.
Fluent with digital technology.
Personalization and product customization are key to marketing success.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Demographic Environment
The changing age structure of the U.S. population is the single most important demographic trend.
Baby boomers, Generation X, and the Millennials are key generational groups.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Actors close to the company that affect its ability to serve its customers.
Microenvironment
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Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The company and all of the other actors operate in a larger macroenvironment of forces that shape opportunities and pose threats to the company.
Larger societal forces that affect the microenvironment.
Macroenvironment
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
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