Principles of Marketing

1. 3 Principles of Marketing The Marketing Environment

2. The Marketing Environment The marketing environment includes the actors and forces outside of 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 Environment Macroenvironment consists of the larger societal forces that affect the microenvironment • Demographic • Economic • Natural • Technological • Political • Cultural 3-6

5. The Company’s Microenvironment • The Company • Suppliers • Marketing intermediaries • Customers • Competitors • Publics 3-7

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

7. The Company’s Microenvironment Suppliers • Provide the resources to produce goods and services • Treated as partners to provide customer value 3-9

8. The Company’s Microenvironment Marketing Intermediaries • Help the company to promote, sell, and distribute its products to final buyers • Include: • Resellers • Physical distribution firms • Marketing services agencies • Financial intermediaries 3-10

9. The Company’s Microenvironment Marketing Intermediaries Resellers are the distribution channel firms that help the company find customers or make sales to them • Include: • Wholesalers • Retailers 3-11

10. The Company’s Microenvironment Marketing Intermediaries Physical distribution firms are the distribution channel firms that help the company to stock and move goods from their points of origin to their final destination 3-12

11. The Company’s Microenvironment Marketing Intermediaries Marketing service agencies are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets 3-13

12. The Company’s Microenvironment Marketing Intermediaries Financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods 3-14

13. 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 3-15

14. The Company’s Microenvironment Customers Reseller markets buy goods and services to resell at a profit Government markets buy goods and services to produce public services or transfer goods and services to others who need them International markets consist of buyers in other countries including consumers, producers, resellers, and governments 3-16

15. The Company’s Microenvironment Competitors Firms must gain strategic advantage by positioning their offerings against competitors’ offerings 3-17

16. The Company’s Microenvironment Publics Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives • Financial publics • Media publics • Government publics • Citizen-action publics • Local publics • General public • Internal publics 3-18

17. 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 and truth in advertising 3-19

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

19. The Company’s Macroenvironment • Demographic environment • Economic environment • Natural environment • Technological environment • Political environment • Cultural environment 3-21

20. The Company’s Macroenvironment Demographic Environment Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics Demographic environment is important because it involves people, and people make up markets Demographic trends include age, family structure, geographic population shifts, educational characteristics, and population diversity 3-22

21. The Company’s Macroenvironment Demographic Environment The Changing Family More people are: • Divorcing or separating • Choosing not to marry • Choosing to marrying later • Marrying without intending to have children • Higher divorce rates • Increased number of working women 3-27

22. The Company’s Macroenvironment Demographic Environment Geographic Shifts in Population • Trends include: • Migratory movements between and within countries • Moving from rural to metropolitan areas 3-28

23. The Company’s Macroenvironment Demographic Environment Changes in the Workforce Trends include: • More educated • More white collar • More professional 3-29

24. The Company’s Macroenvironment Economic Environment Economic environment consists of factors that affect consumer purchasing power and spending patterns 3-31

25. 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 • Trends • Shortages of raw materials • Increased pollution • Increased government intervention • Environmentally sustainable strategies • Green marketing 3-35

26. The Company’s Macroenvironment Technological Environment Most dramatic force in changing the marketplace with many positive and negative effects • Rapid change • Provides new markets and new opportunities • Internet • Medicine • Weapons • Credit cards • Communication 3-37

27. 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 3-38

28. The Company’s Macroenvironment Political Environment • Legislation regulating business • Public policy to guide commerce—sets of laws and regulations that limit business for the good of society at large • Increasing legislation • Protect companies • Protect consumers • Protect the interests of society 3-39

29. The Company’s Macroenvironment Political Environment Increased Emphasis on Ethics and Socially Responsible Actions Socially responsible behavior occurs when firms actively seek out ways to protect the long-term interests of their consumers and the environment 3-41

30. The Company’s Macroenvironment Cultural Environment Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors 3-42

31. Responding to the Marketing Environment Views on Responding • Uncontrollable • Reacting and adapting to forces in the environment • Proactive • Taking aggressive actions to affect forces in the environment • Reactive • Watching and reacting to forces in the environment 3-48