Principles of Marketing,

Arab World Edition

Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed
Tolba
Presentation prepared by Annelie Moukaddem Baalbaki

CHAPTER THREE
Analyzing the Marketing
Environment

Lecturer: Insert your name here

Ch 3 - 1 Copyright
Copyright © 2011
© 2011 Pearson
Pearson Education
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1Ch 1 -1
 Chapter Learning Outcomes
Topic Outline

3.1 The Company’s Microenvironment

3.2 The Company’s Macroenvironment
3.3 Demographic Environment
3.4 Economic Environment
3.5 Natural Environment
3.6 Technological Environment
3.7 Political and Social Environment
3.8 Cultural Environment
3.9 Responding to the Marketing Environment

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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.

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 The Company’s Microenvironment

A 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.

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 The Company’s Microenvironment

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 The Company’s Microenvironment
The Company

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

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 The Company’s Microenvironment
Suppliers

• Provide the resources to produce goods and services

• Treated as partners to provide customer value

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 The Company’s Microenvironment
Marketing Intermediaries

Marketing Intermediaries help the company to promote, sell

and distribute its products.

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 The Company’s Microenvironment
Competitors

Firms must gain strategic advantage by positioning their

offerings against competitors’ offerings.

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 The Company’s Microenvironment

Publics are any groups that have an actual or potential

interest in or impact on an organization’s ability to achieve its
objectives. They include:
• Financial publics
• Media publics
• Government publics
• Citizen-action publics
• Local publics
• The general public
• Internal publics

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 The Company’s Macroenvironment

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 Demographic Environment
Demography

Demography is the study of human populations in terms of

size, density, location, age, gender, race, occupation, and
other statistics.

• The 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.

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 Demographic Environment
Changing Age Structure of the Population

• Baby boomers include people born between 1946 and 1964

• This generation accounts for about 30% of the Arab
population
• Baby boomers “think young” no matter how old they are
• Baby boomers are retiring later and working more after
retirement

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 Demographic Environment
Generation X

Generation X includes people born between 1965 and 1976.

This generation tends to display the following traits:
• Skepticism

• Cautious economic outlook

• Less materialistic
• Family comes first
• Research products before considering a purchase

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 Demographic Environment
Millennials

Millennials (Generation Y or Echo Boomers) include those born

between 1977 and 2000:
• Comfortable with technology
• Includes
– Tweens (ages 8–12)
– Teens (13–19)
– Young adults (20’s)

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 Demographic Environment
Generational marketing

Generational marketing is important in segmenting people by

lifestyle, life stage and common values, rather than by age.

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 Demographic Environment
The Changing Arab Family

• Gender and age are often the basis for defining roles and
responsibilities.
• Women are working more outside the house.
• Inherited values and traditions are taught to the next
generation.
• Mothers are more involved in family decision making.

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 Demographic Environment
Geographic Shifts in Population

• Expatriates are coming to the Arab world lured by high

income and a high standard of living.
• The nationals of most Gulf countries are now a minority
population within their own countries.

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 Demographic Environment
Education and Employment

• Since the global recession, unemployment rates have been

rising across the Arab world
• Governments are reassessing their education policies and
training programs

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 Demographic Environment
Increased Diversity

Markets are becoming more diverse

• International
• National

Includes:
• Ethnicity
• Language

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 Economic Environment
Economic Environment

The 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.

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 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.

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 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.

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 Natural Environment
Natural Environment

The 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
• Increase government intervention
• Environmentally sustainable strategies

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 Technological Environment

The technological environment is the most dramatic

force in changing the marketplace.
• It creates new products and opportunities.
• Safety of new product always a concern.

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 Political Environment
Political Environment

The political environment consists of laws, government

agencies, and pressure groups that influence or limit various
organizations and individuals in a given society.

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 Political Environment
Legislation Regulating Business

• Increased legislation
• Changing government agency enforcement

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 Political Environment
Increased Emphasis on Ethics and Socially Responsible
Actions

• Socially responsible behavior

• Cause-related marketing

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 Cultural Environment
Cultural Environment

The cultural environment consists of institutions and other

forces that affect a society’s basic values, perceptions, and
behaviors.

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 Cultural Environment
Persistence of Cultural Values

Core beliefs and values are persistent and are passed on from
parents to children and are reinforced by schools, mosques,
businesses, and governments.

Secondary beliefs and values are more open to change and

include people’s views of themselves, others, organizations,
society, nature, and the universe.

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 Cultural Environment
Shifts in Secondary Cultural Values

• People’s view of themselves

• People’s view of others
• People’s view of organizations
• People’s view of society
• People’s view of nature
• People’s view of the universe

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 Responding to the Marketing Environment
Views on Responding

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