Chapter 3. The Marketing Environment

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1 Chapter 3 The Marketing Environment 1

2 Case Study McDonald s Challenges Marketing Initiatives Shifting consumer lifestyles Low ratings of food and service quality Atmosphere not upscale Image of being unclassy, uncultured and uncool to younger target markets Focus on core competency of consistent products and reliable service Upscale alternative including McCafe and Bistro Gourmet Healthier food options with elimination of supersize and introduction of Go Active! Adult Happy Meal 3-2 2

3 Marketing Environment Marketing Environment- consists of the actors and forces outside marketing that affect marketing management s ability to develop and maintain successful relationships with its target customers. Includes: Microenvironment - forces close to the company that affect its ability to serve its customers. Macroenvironment - larger societal forces that affect the microenvironment. 3

4 The Company s Microenvironment 4

5 The Company s Microenvironment Company s Internal Environmentfunctional areas inside a company that have an impact on the marketing department s plans. 6

6 Microenvironment Actors 1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics Marketing must consider other parts of the organization, including finance, R&D, purchasing, operations and accounting Marketing decisions must relate to broader company goals and strategies 7

7 Microenvironment Actors 1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics Marketers must watch supply availability and pricing Effective partnership relationship management with suppliers is essential 8

8 Microenvironment Actors 1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics Help to promote, sell and distribute goods to final buyers Include resellers, physical distribution firms, marketing services agencies and financial intermediaries Effective partner relationship management is essential Goal 1: Describe environmental factors 9

9 Target uses Amazon for an online intermediary Marketing in Action Click on screenshot for website Click on screenshot for website 10

10 Microenvironment Actors 1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics The five types of customer markets Consumer Business Reseller Government International Goal 1: Describe environmental factors 11

11 Microenvironment Actors 1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics Conducting competitor analysis is critical for success of the firm A marketer must monitor its competitors offerings to create strategic advantage Goal 1: Describe environmental factors 12

12 Microenvironment Actors 1. The company 2. Suppliers 3. Marketing intermediaries 4. Customers 5. Competitors 6. Publics A group that has an actual or potential interest in or impact on an organization Seven publics include: Financial Media Government Citizen-action Local General Internal 13

13 The Company s Microenvironment 21

14 Demographic- Economic Environment Marketing Intermediaries Technological- Natural Environment Product Suppliers Place Target Consumers Price Publics Promotion Political- Legal Environment Competitors Social- Cultural Environment 22

15 Discussion What is the difference between the microenvironment and macroenvironment with respect to marketing? What does a marketing intermediary do? How many publics can you name for your college or university? 23

16 Discussion What generation are you in? How would you describe your generation? If you were going to attempt to sell to the 65+ generation, what would be a key to selling successfully to this generational group? Which technological force will impact marketing the most in the near future? What technological force has impacted you the most? 24

17 Discussion Do you think the Internet should be regulated? Why or why not? Do you buy online? Why or why not? List five cultural values in our society. Why are these values important to our society? 25

18 The Macroenvironment 27

19 Imagine!!!!!!!! If you reduce the world to a village of 1, 000 people representative of the world s population, what will be the reality? 29

20 480men, 520women, 330children, 60 over65, 10 college graduates, 335 illiterate adults 165mandarin, 86english, 64spanish,58 Russian. Other speak more than 200 languages 1/3 can get clean drinking, half immunized 40%land,83%fertilizer,72%food,270 persons 60%land,17%fertilizer,28%food,730 persons 200 persons, 75% wealth 200persons, 2% wealth 30

21 Can you recognize? "yuppies" "bumpies" "yummies" "DINKs" "DEWKs" "MOBYs" "WOOFs" 31

22 Can you recognize? Yuppies- young urban professionals Bumpies- black upwardly mobile professionals Yummies- young upwardly mobile mommies DINKs- dual-income, no-kids couples DEWKs- dual earners with kids MOBYs- mother older, baby younger WOOFs- well-off older folks 32

23 The Company s Macroenvironment Demographic - studies populations in terms of size, density, location, age, gender, race, occupation and other statistics. 33

24 Key U.S.Demographic Trends Changing Age Structure Population is aging; many divisions Changing American Family Later marriage, fewer children, working women, and nontraditional households Geographic Shifts Moving to the Sunbelt, suburbs, micropolitan areas Better-Educated & More White-Collar Increased college attendance and white-collar workers Increasing Diversity 72% Caucasian, 13% African-American, 11% Hispanic & 3% Asian 34

25 Age Distribution of the U.S. Population (78 million people born ) One of the most powerful forces shaping the marketing environment, 30% of population (45 million people born ) More skeptical, cynical of frivolous marketing pitches promising easy success (72 million people born ) Fluent and comfortable with computer, digital, and Internet technology (Net-Gens) 35

26 The Company s Macroenvironment Economic - factors that affect consumer purchasing power and spending patterns. 36

27 Economic Environment Economic Development Changes in Income: Value Marketing Key Economic Concerns for Marketers Changing Consumer Spending Patterns 37

28 The Company s Macroenvironment Natural - natural resources needed as inputs by marketers or that are affected by marketing activities. 38

29 Natural Environment Shortages of Raw Materials Environmentally Sustainable Strategies Factors Affecting the Natural Environment Increased Pollution Governmental Intervention 39

30 The Company s Macroenvironment Technological - forces that create new technologies, creating new product and market opportunities. Political - laws, agencies and pressure groups that influence and limit organizations and individuals in a given society. Cultural - institutions and other forces that affect a society s basic values, perceptions, preferences, and behaviors. 40

31 Technological Environment Faster pace of technological change; products are outdated at a rapid pace. Almost unlimited opportunities being developed daily in health care, space industry, robotics, and bio-genetic field. Challenge is not only technical, but also commercial make practical, affordable versions of products. Increased regulation concerning product safety, individual privacy, and other areas that affect technological changes. 41

32 Political Environment Includes Laws, Government Agencies, Etc. that Influence & Limit Organizations/ Individuals in a Given Society Increasing Legislation Changing Government Agency Enforcement Increased Emphasis on Ethics & Socially Responsible Actions 42

33 Cultural Environment People s View of Themselves People s View of the Universe People s View of Nature People s View of Cultural Values Others of a Society People s View of Organizations People s View of Society 43

34 Can you recognize? 1. 昨天晚上我的 GG 带着他的恐龙 GF 到我家来吃饭, 饭桌上,GG 的 GF 一个劲向我妈妈 PMP, 那酱紫真是好 BT,7456, 我只吃了几口饭, 就到 QQ 上打铁去了 2. " 孩子和我吵架, 说我是 '286', 什么是 '286'?" 44

35 Responding to the Marketing Environment Environmental Management Perspective Taking a proactive approach to managing the microenvironment and the macroenvironment by taking aggressive (rather than passive) actions to affect the publics and forces in the marketing environment. How? Hire lobbyists, run advertorials, press law suits, file complaints, and form agreements. 45

36 Responding to the Marketing Environment There are three kinds of companies: those who make things happen, those who watch things happen, and those who wonder what s happened. 46

37 The Overall Trend of Marketing Environment Globalization 全球化 Technology development, especially information tech 技术的发展, 特别是以互联网为代表的信息技术的发展 Customer diversification 消费者需求的个性化 47

38 Review of Concept Connections 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. 48