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The Marketing EnvironmentThe Marketing Environment

• Describe the environmental forces thatDescribe the environmental forces that affect the company’s ability to serve its affect the company’s ability to serve its customers. customers.
• Explain how changes in the demographicExplain how changes in the demographic and economic environments affect and economic environments affect marketing decisions. marketing decisions.
• Identify the major trends in the firm’sIdentify the major trends in the firm’s natural and technological environments. natural and technological environments.
• Explain the key changes in the political andExplain the key changes in the political and cultural environments. cultural environments.
• Discuss how companies can react to theDiscuss how companies can react to the marketing environment. marketing environment.

ROAD MAP: Previewing the Concepts ROAD MAP: Previewing the Concepts

• Includes:Includes:
  • (^) Microenvironment: actors close to theMicroenvironment: actors close to the company that affect its ability to serve company that affect its ability to serve its customers. its customers.
  • (^) Macroenvironment: larger societal forcesMacroenvironment: larger societal forces that affect the microenvironment. that affect the microenvironment. - Considered to be beyond the control of theConsidered to be beyond the control of the organization. organization. Marketing Marketing Environment Environment

The Company’s The Company’s Microenvironment Microenvironment

• Company’s Internal Environment:Company’s Internal Environment:
  • (^) AreasAreas insideinside a company.a company.
  • (^) Affects the marketing department’sAffects the marketing department’s

planning strategies. planning strategies.

• (^) All departments must “thinkAll departments must “think

consumer” and work together to consumer” and work together to

provide superior customer value and provide superior customer value and

satisfaction. satisfaction.

• Suppliers:Suppliers:
  • (^) Provide resourcesProvide resources needed to produce needed to produce goods and services. goods and services.
  • (^) Important link inImportant link in the “value delivery the “value delivery system.” system.”
  • (^) Most marketersMost marketers treat suppliers like treat suppliers like partners. partners. The Company’s The Company’s Microenvironment Microenvironment

The Company’s The Company’s Microenvironment Microenvironment

• Marketing Intermediaries:Marketing Intermediaries:
  • (^) Help the company to promote, sell, andHelp the company to promote, sell, and distribute its goods to final buyers distribute its goods to final buyers - ResellersResellers - Physical distribution firmsPhysical distribution firms - Marketing services agenciesMarketing services agencies - Financial intermediariesFinancial intermediaries

• Customers:Customers:
  • (^) Five types ofFive types of markets that markets that purchase a purchase a company’s company’s goods and goods and services services The Company’s The Company’s Microenvironment Microenvironment

The Company’s The Company’s Microenvironment Microenvironment

• Competitors:Competitors:
  • (^) Those who serve a target market withThose who serve a target market with products and services that are viewed by products and services that are viewed by consumers as being reasonable substitutes consumers as being reasonable substitutes
  • (^) Company must gain strategic advantageCompany must gain strategic advantage against these organizations against these organizations
• Publics:Publics:
  • (^) Group that has an interest in or impact onGroup that has an interest in or impact on an organization's ability to achieve its an organization's ability to achieve its objectives objectives

The Macroenvironment The Macroenvironment

• The company and all of the otherThe company and all of the other

actors operate in a larger actors operate in a larger

macroenvironment of forces that macroenvironment of forces that

shape opportunities and pose threats shape opportunities and pose threats

to the company. to the company.

The Company’s The Company’s Macroenvironment Macroenvironment

The Seven U.S. Generations The Seven U.S. Generations

Baby Boomers Baby Boomers

• 78 million born between 1946 and 196478 million born between 1946 and 1964
• Account for 28% of populationAccount for 28% of population
• Earn more than half of all personalEarn more than half of all personal

income income

• Almost 25% belong to racial or ethnicAlmost 25% belong to racial or ethnic

minority minority

• Spend a lot on anti-aging products andSpend a lot on anti-aging products and

services services

• Are likely to postpone retirementAre likely to postpone retirement

Generation Y Generation Y

• 72 million born between 1977 and 199472 million born between 1977 and 1994
• Have large amount of disposable incomeHave large amount of disposable income
• Comfortable with computer technologyComfortable with computer technology
• Tend to be impatient and “Now-Oriented”Tend to be impatient and “Now-Oriented”
• Many product lines targeted at Gen YsMany product lines targeted at Gen Ys

Economic Environment Economic Environment

• Changes in IncomeChanges in Income
  • (^) 1980’s – consumption1980’s – consumption frenzy frenzy
  • (^) 1990’s – “squeezed1990’s – “squeezed consumer” consumer”
  • (^) 2000’s – value2000’s – value marketing marketing - Income DistributionIncome Distribution - (^) Upper classUpper class - (^) Middle classMiddle class - (^) Working classWorking class - (^) UnderclassUnderclass

Consists of factors that affect consumer

purchasing power and spending

patterns.