Chapter 3: Analyzing The Marketing

Environment

Introduction
To develop effective marketing strategies, we must
first understand the environment in which
marketing operates.
In this chapter, well see that marketing
operates in a complex and changing
environment. Other actors in this environment
suppliers, intermediaries, customers, competitors,
publics, and othersmay work with or against the
company. Major environemental forces
demographic, economic, natural, technological,
political,
and
culturalshape
marketing
opportunities, pose threats, and affect the
companys ability to build customer relationships.

Marketing Environment
- The Marketing Environment refers to the actors and forces
outside

of

the

marketing

department

marketing management ability to build

that

affect

and maintain

successful relationships with target customers.

- The Marketing Environment is made up of:
1. The microenvironment consists of the actors close to the
company that affect its ability to serve its customers.
These forces are partially controllable by the company.
2. The macroenvironment consists of the larger societal
forces that affect the microenvironment. These forces
are uncontrollable by the company.

1- The Company: Marketers must work in harmony with other

company departments to create customer value and relationships.

Walmarts marketers cant promise us low prices unless its

operations department delivers low costs.

2- Suppliers:

provide the resources needed by the company to produce

its goods and services
Supply shortages or delays, labor strikes, and other events can cost sales
in the short run and damage customer satisfaction in the long run

DENSO Australia Wins Toyota Supplier Of The

Year

3- Marketing Intermediaries: 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.

Microenvironment: Marketing
Intermediaries

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.

4- Competitors: The marketing concept states that, to be

successful, a company must provide greater customer value and
satisfaction than its competitors do.

Microenvironment
5- Publics: it is any group that has an actual or potential interest in
or impact on an organizations ability to achieve its objectives

Financial publics. This group influences the companys 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.

Management

must

take

government

developments into account. Marketers must often consult the

companys

lawyers

on

issues

of

product

safety,

truth

in

advertising, and other matters.

Citizen-action publics. A companys marketing decisions may be

Microenvironm
ent
6- Customers:
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.
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.
International markets consist of these buyers in other countries,
including consumers, producers, resellers, and governments.

Macroenvironm
ent
1- The Demographic Environment:
Demography is the study of human populations in
terms of size, density, location, age, gender, race,
occupation, and other statistics.
Ex: Chinas one-child rule created a generation of
people who have been pampered by parents and
grandparents and have the means to make
indulgent purchases.
Also, Millennials (Americans born between 1977

Key
Key U.S.
U.S. Demographic
Demographic Trends
Trends
Changing
ChangingAge
AgeStructure
Structure

Population
Populationis
isgetting
gettingolder
older
Changing
ChangingFamily
FamilyStructure
Structure

Marrying
Marryinglater,
later,fewer
fewerchildren,
children,
working
workingwomen,
women,and
andnonfamily
nonfamilyhouseholds
households
Geographic
GeographicShifts
Shifts

Moving
Movingto
tothe
theSunbelt
Sunbeltand
andsuburbs
suburbs(MSAs)
(MSAs)
Increased
IncreasedEducation
Education

Increased
Increasedcollege
collegeattendance
attendance
and
white-collar
and white-collarworkers
workers
Growing
GrowingEthnic
Ethnicand
andRacial
RacialDiversity
Diversity

73%
73%Caucasian,
Caucasian,12%
12%African-American,
African-American,
10%
10%Hispanic
Hispanic&&3.4%
3.4%Asian
Asian

Macroenvironm
ent
2- The Economic Environment:
consists of economic factors that affect
consumer purchasing power and spending
patterns.
Marketers in all industries are looking for
ways to offer todays more financially
cautious buyers greater valuejust the
right combination of product quality and

Economic
Economic Environment
Environment

Economic
Economic
Development
Development

Key
Key
Economic
Economic
Concerns
Concerns for
for
Marketers
Marketers
Changes
Changes
in
in Consumer
Consumer
Spending
Spending
Patterns
Patterns

Changes
Changes
in
in Income
Income

Macroenvironm
ent
3- The Natural Environment: involves the natural resources that
are needed as inputs by marketers or that are affected by
marketing activities.

Marketers should be aware of several trends in the natural

environment, They are the growing shortages of raw materials,
increased pollution and increased government intervention.

PepsiCo markets hundreds of products that are grown, produced,

and consumed worldwide. Making and distributing these products
requires water, electricity, and fuel.

In 2007, the company set as its goal to reduce water consumption

by 20 percent, electricity consumption by 20 percent, and fuel
consumption by 25 percent per unit of production by 2015.

Natural Environment
More
More Government
Government
Intervention
Intervention

Higher
Higher Pollution
Pollution
Levels
Levels

Factors
Affecting
the
Natural
Environment

Increased
Increased Costs
Costs
of
of Energy
Energy

Shortages
Shortages of
of
Raw
Raw Material
Material

Macroenvironme
4- The Technological Environment:
nt
Forces
creating

that

create

new

new

product

technologies,
and

market

opportunities.
Transistors hurt the vacuum-tube industry,
CDs hurt phonograph records, and digital
photography hurt the film business. When
old

industries

fought

or

ignored

new

Macroenvironm
ent
5- The Political and Social Environment:
Laws, government agencies, and pressure groups
that influence and limit various organizations and
individuals in a given society.

Political
Political Environment
Environment

Increased
Increased
Legislation
Legislation

Key
Key
Trends
Trends in
in the
the
Political
Political
Environment
Environment
Greater
Greater
Concern
Concern for
for
Ethics
Ethics

Changing
Changing
Enforcement
Enforcement

Macroenvironmen
6t The Cultural Environment:
Institutions and other forces that affect
societys

basic

values,

preferences, and behaviors.

perceptions,

Cultural
Cultural Environment
Environment

Of
the Universe

Of
Nature

Of
Oneself
Views
Views
That
That Express
Express
Values
Values
Of
Society

Of
Others

Of
Organizations

Responding
Responding to
to the
the Marketing
Marketing
Environment
Environment
Environmental Management Perspective
Taking a proactive approach to managing
the

microenvironment

and

the

macroenvironment to affect changes that

are favorable for the company. How? Hire
lobbyists , run advertorials, file law suits
and complaints, and form agreements.