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
• 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
 The Company’s
Microenvironment
Actors in the Microenvironment
 The Company

• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting
 Suppliers

Provide the resources to produce goods and

services.
Marketing managers must watch supply
availability and costs. Supply shortages or delays,
labor strikes, and other events can cost sales in the
short run and damage customer satisfaction in the
long run. Rising supply costs may force price
increases that can harm the company’s sales
volume.
Most marketers today treat their suppliers as
partners in creating and delivering customer
value.
 Marketing Intermediaries

Help the company to promote, sell and distribute

its products to final buyers. They include resellers,
physical distribution firms, marketing services
agencies, and financial intermediaries.
Resellers are distribution channel firms that help
the company find customers or make sales to them.
These include wholesalers and retailers who buy
and resell merchandise. Selecting and partnering
with resellers is not easy. No longer do
manufacturers have many small, independent
resellers from which to choose.
They now face large and growing reseller organizations,
such as Walmart, chazzup, matro and more. These
organizations frequently have enough power to dictate
terms or even shut smaller manufacturers out of large
markets. Physical distribution firms help the company
stock and move goods from their points of origin to
their destinations. Marketing services 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. 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.
Customer The aim of the entire value delivery network is
to serve target customers and create strong relationships
with them. The company might target any or all five types of
customer markets. Consumer markets consist of individuals
and households that buy goods and services for personal
consumption. Business markets buy goods and services for
further processing or use in their production processes,
whereas reseller markets buy goods and services to resell at
a profit. Government markets consist of government
agencies that buy goods and services to produce public
services or transfer the goods and services to others who
need them. Finally, international markets consist of these
buyers in other countries, including consumers, producers,
resellers, and governments. Each market type has special
characteristics that call for careful study by the seller.
 Competitors

To be successful, a company must provide greater

customer value and satisfaction than its
competitors do. They also must gain strategic
advantage by positioning their offerings strongly
against competitors’ offerings in the minds of
consumers.
No single competitive marketing strategy is best for
all companies. Each firm should consider its own
size and industry position compared to those of its
competitors.
 Publics
The company’s marketing environment also includes various
publics. A public is any group that has an actual or potential
interest in or impact on an organization’s ability to achieve
its objectives. We can identify seven types of publics:
– Financial publics
– Media publics
– Government publics
– Citizen-action publics
– Local publics
– General public
– Internal publics
  Financial publics. publics This group influences the company’s
ability to obtain funds. Banks, investment analysts, and
stockholders are the major financial publics.
• Media publics. This group carries news, features, and
editorial opinion. It includes newspapers, magazines,
television stations, and blogs and other Internet media.
• Government publics. publics Management must take government
developments into account. Marketers must often consult
the company’s lawyers on issues of product safety, truth
in advertising, and other matters.
• Citizen-action publics. publics A company’s marketing decisions
may be questioned by consumer organizations,
environmental groups, minority groups, and others. Its
public relations department can help it stay in touch with
consumer
Publishing and citizen groups.
Copyright © 2010 Pearson Education, Inc.  
as Prentice Hall
Chapter 3- slide 10
Local publics.
publics This group includes neighborhood residents and
community organizations. Large companies usually create
departments and programs that deal with local community
issues and provide community support.
General public. A company needs to be concerned about the
general public’s attitude toward its products and activities.
The public’s image of the company affects its buying.
Internal publics.
publics This group includes workers, managers,
volunteers, and the board of directors.

A company can prepare marketing plans for these major

publics as well as for its customer markets.

Copyright © 2010 Pearson Education, Inc.  

Chapter 3- slide 11
Publishing as Prentice Hall
 The Company’s
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.
 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
 Demographic Environment

• Changing age structure of the population

three largest groups—the baby boomers,
Generation X, and generation Y and their impact
on today’s marketing strategies and shaping
marketing environment.
– Baby boomers include people born between 1946 and
1964
– Most affluent Americans
Generation X includes people born between 1965 and 1976
– Cautious economic outlook
– Less materialistic
– Family comes first
Millennials (gen Y or echo boomers) include those born
between 1977 and 1994
– Comfortable with technology
– Includes
• Tweens (ages 8–12)
• Teens (13–19)
• Young adults (20’s)
• iGen / Gen Z 1995 2012
• Gen Alpha 2013 2025
 Generational marketing is important in
segmenting people by lifestyle or life state
instead of age
More people are:
• Divorcing or separating
• Choosing not to marry
• Choosing to marry later
• Increased number of working women
• Stay-at-home dads
 Economic Environment

Economic environment consists of factors that

affect consumer purchasing power and spending
patterns
• Industrial economies are richer markets
• Subsistence economies consume most of their
own agriculture and industrial output
 Economic Environment

• Changes in income
• Value marketing involves
ways to offer financially
cautious buyers greater
value—the right
combination of quality and
service at a fair price
 Economic Environment
Changes in Consumer Spending Patterns

• Ernst Engel—Engel’s Law

• As income rises:
– The percentage spent on food declines
– The percentage spent on housing remains
constant
– The percentage spent on savings increases
 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
 Technological Environment

• Most dramatic force

in changing the
marketplace
• Creates new
products and
opportunities
• Safety of new
product always a
concern
Political Environment

Legislation regulating
business
– Increased legislation
– Changing government
agency enforcement
Increased emphasis on
ethics
– Socially responsible
behavior
– Cause-related
marketing
 Cultural Environment

Cultural environment consists of institutions and

other forces that affect a society’s basic values,
perceptions, and behaviors
Core beliefs and values are persistent and are passed
on from parents to children and are reinforced by
schools, churches, businesses, and government
Secondary beliefs and values are more open to
change and include people’s views of themselves,
others, organization, society, nature, and the
universe
Responding to the Marketing
Environment
Views on Responding