Principles of Marketing

1. 3 Principles of Marketing The Marketing Environment

2. 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 3-4

3. The Marketing Environment 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 3-5

4. The Company’s Microenvironment Marketing Intermediaries Customers Competitors Suppliers Publics The company Marketing

5. The Company’s Macro environment Marketing Environment Macroenvironment consists of the larger societal forces that affect the microenvironment • Demographic • Economic • Natural • Technological • Political • Cultural 3-6

6. The Company’s Macro environment Technological Forces Natural Forces Political Forces Economic Forces Cultural Forces Demographic Forces Company

7. The Company’s Microenvironment The Company Internal environment includes: • Top management • Finance • R&D • Purchasing • Operations • Accounting 3-8

8. The Company’s Microenvironment Suppliers • Provide the resources to produce goods & services • Treated as partners to provide customer value Marketing Intermediaries • Help the company to promote, sell & distribute its products to final buyers • Include: • Resellers - Wholesalers, Retailers • Physical distribution firms • Marketing services agencies 3-9

9. The Company’s Microenvironment Customers • Customer markets consist of individuals and households that buy goods and services for personal consumption • Business markets buy goods and services for further processing or for use in their production process • Government markets buy goods & services to produce public services or transfer goods & services to others who need them 3-15

10. The Company’s Microenvironment Customers • Reseller markets buy goods & services to resell at a profit • International markets consist of buyers in other countries including consumers, producers, resellers & governments Competitors Firms must gain strategic advantage by positioning their offerings against competitors’ offerings. 3-16

11. The Company’s Microenvironment Publics • Financial publics influence the company’s ability to obtain funds—banks, investment houses, and stockholders • Media publics carry news, features, and editorial opinion—newspapers, magazines, and radio and television stations • Government publics influence product safety & truth in advertising 3-19

12. The Company’s Microenvironment Publics • Citizen-action publics include consumer organizations, environment groups, and minority groups • Local publics include neighborhood residents & community organizations • General publics influence the company’s public image • Internal publics include workers, managers, volunteers & directors. 3-20

13. The Company’s Macroenvironment Demographic Environment Demography is the study of human populations in terms of size, density, location, age, education, gender, race, occupation, population diversity & other statistics Demographic environment is important because it involves people, and people make up markets 3-22

14. The Company’s Macroenvironment Demographic Environment Baby boomers include people born between 1946 & 1964. Most affluent Americans. Generation X includes people born between 1965 & 1976 • High divorce rates • Concerned about the environment • Respond to socially responsible companies • Less materialistic • Quality of life • Consumer organizations, environment groups & minority groups 3-24

15. The Company’s Macroenvironment Demographic Environment Generation Y includes people born between 1977 & 2000. Internet generation Economic Environment: Changes in Income • Income distribution • Upper-class consumers • Middle-class consumers • Working-class consumers • Underclass consumers 3-26

16. 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. Some concerns are: • Shortages of raw materials • Increased pollution • Increased government intervention • Environmentally sustainable strategies • Green marketing: developing ecologically safer products, recyclable & biodegradable packaging, better pollution controls & more energy efficient operations. 3-35

17. 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. Socially responsible behavior occurs when firms actively seek out ways to protect the long-term interests of their consumers and the environment • Cause-related marketing: Buy a ACI Aerosol & support flood affected people. 3-38

18. The Company’s Macroenvironment Cultural Environment Cultural environment consists of institutions & other forces that affect a society’s basic values, perceptions & behaviors.Major cultural values of a society are expressed in people’s view of: • Themselves • Others • Organization • Society • Nature and the universe 3-42