Chapter 3 The Marketing Environment

1. Chapter 3The Marketing Environment Professor Marshall Queens College

2. Marketing Environment • Consists of actors and forces outside the organization that affect management’s ability to build and maintain relationships with target customers. • Environment offers both opportunities and threats to the company. • Marketing intelligence and research used to collect information about the environment.

3. Marketing Environment • Includes: • Microenvironment: actors close to the company that affect its ability to serve its customers. (suppliers, marketing intermediaries, competitors) • Macroenvironment: larger societal forces that affect the microenvironment. (demographic, economic, political) • Beyond the control of the organization.

4. The Company’s 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.

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

6. The Company’s Microenvironment • Customers: • Five types of markets that purchase a company’s goods and services • Markets Include: • Consumer • Business • Reseller • Government • International

7. The Company’s Microenvironment • Competitors: • Those who serve a target market with products and services that are viewed by consumers as being reasonable substitutes • Company must gain strategic advantage against these organizations

8. The Company’s Microenvironment • Publics: • Group that has an interest in or impact on an organization's ability to achieve its objectives • Publics Include: • Financial • Media • Government • Citizen-action • Local • General • Internal

9. The Macroenvironment • The company and all of the other actors operate in a larger macroenvironment of forces that shape opportunities and pose threats to the company. • Forces Include: • Demographic • Economic • Natural • Technological • Political • Cultural

10. The Company’s Macroenvironment • Demographic: • The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. • Marketers track changing age and family structures, geographic population shifts, educational characteristics, and population diversity.

11. The Company’s Macroenvironment • The Seven U.S. Generations: • GI Generation = born in or before 1930 • Depression = 1931-1940 • War Babies = 1941-1946 • Baby Boomers = 1947-1965 • Generation X = 1966-1977 • Generation Y = 1978-1995 • Millennials = 1996 or after

13. Changing American Family • 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” = 32%

14. Geographic Shifts in Population • 16% 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

15. Better Educated Population • 1980: • 69% of people over age 25 completed high school • 17% had completed college • 2002: • 84% of people over age 25 completed high school • 27% had completed college

16. More White-Collar Population • 1950 – 1985: • Proportion of white-collar workers increased from 41% to 54% • Proportion of blue-collar workers declined from 47% to 33% • Proportion of service workers increased from 12% to 14% • 1983 – 1999: • Proportion of managers and professionals increased from 23% to >30%

17. Increasing Diversity • U.S. is a “salad bowl” • Various groups mixed together, each retaining its ethnic and cultural differences • Increased marketing to: • Gay and lesbian consumers • People with disabilities

18. Changes in Income 1980’s – consumption frenzy 1990’s – “squeezed consumer” 2000’s – value marketing Income Distribution Upper class Middle class Working class Underclass Economic Environment Consists of factors that affect consumer purchasing power and spending patterns.

19. http://www.census.gov/prod/2004pubs/p60-226.pdf

21. Natural Environment • Factors Impacting the Natural Environment: • Shortages of raw materials • Increased pollution • Increased government intervention • Environmentally sustainable strategies

22. Technological Environment • Changes rapidly. • Creates new markets and opportunities. • Challenge is to make practical, affordable products. • Safety regulations result in higher research costs & longer time between conceptualization and introduction of product.

23. 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

24. 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.

25. Cultural Environment • Society’s major cultural views are expressed in people’s views of: • Themselves • Others • Organizations • Society • Nature • The universe

26. 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. • This can be done by: • Hiring lobbyists • Running “advertorials” (ads that express an editorial point of view) • Pressing law suits • Filing complaints • Forming agreements to control channels

27. Video Case Nike (14 minutes)

28. Thoughts • Do you own Nike sneakers? • What is your perception of Nike as a company? • Who is Nike targeting? • Mission: http://www.nike.com/nikebiz/nikebiz.jhtml?page=4 http://www.nike.com/nikebiz/