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Chapter 3 The Marketing Environment. Professor Marshall Queens College. Marketing Environment. Consists of actors and forces outside the organization that affect management’s ability to build and maintain relationships with target customers.

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chapter 3 the marketing environment

Chapter 3The Marketing Environment

Professor Marshall

Queens College

marketing environment
Marketing Environment
  • Consists of actors and forces outside the organization that affect management’s ability to build and maintain relationships with target customers.
  • Environment offers both opportunities and threats to the company.
  • Marketing intelligence and research used to collect information about the environment.
marketing environment3
Marketing Environment
  • Includes:
    • Microenvironment: actors close to the company that affect its ability to serve its customers. (suppliers, marketing intermediaries, competitors)
    • Macroenvironment: larger societal forces that affect the microenvironment. (demographic, economic, political)
      • Beyond the control of the organization.
the company s microenvironment
The Company’s Microenvironment
  • Company’s Internal Environment:
    • Areas inside a company.
    • Affects the marketing department’s planning strategies.
    • All departments must “think consumer” and work together to provide superior customer value and satisfaction.
the company s microenvironment5
The Company’s Microenvironment
  • Suppliers:
    • Provide resources needed to produce goods and services.
    • Important link in the “value delivery system.”
    • Most marketers treat suppliers like partners.
the company s microenvironment6
The Company’s Microenvironment
  • Customers:
    • Five types of markets that purchase a company’s goods and services
  • Markets Include:
    • Consumer
    • Business
    • Reseller
    • Government
    • International
the company s microenvironment7
The Company’s Microenvironment
  • Competitors:
    • Those who serve a target market with products and services that are viewed by consumers as being reasonable substitutes
    • Company must gain strategic advantage against these organizations
the company s microenvironment8
The Company’s Microenvironment
  • Publics:
    • Group that has an interest in or impact on an organization's ability to achieve its objectives
  • Publics Include:
  • Financial
  • Media
  • Government
  • Citizen-action
  • Local
  • General
  • Internal
the macroenvironment
The 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.
  • Forces Include:
  • Demographic
  • Economic
  • Natural
  • Technological
  • Political
  • Cultural
the company s macroenvironment
The Company’s Macroenvironment
  • Demographic:
    • The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.
    • Marketers track changing age and family structures, geographic population shifts, educational characteristics, and population diversity.
the company s macroenvironment11
The Company’s Macroenvironment
  • The Seven U.S. Generations:
    • GI Generation = born in or before 1930
    • Depression = 1931-1940
    • War Babies = 1941-1946
    • Baby Boomers = 1947-1965
    • Generation X = 1966-1977
    • Generation Y = 1978-1995
    • Millennials = 1996 or after
changing american family
Changing American Family
  • Household makeup:
    • Married couples with children = 34%, and falling
    • Married couples and people living with other relatives = 22%
    • Single parents = 12%
    • Single persons and adult “live-togethers” = 32%
geographic shifts in population
Geographic Shifts in Population
  • 16% of U.S. residents move each year
  • General shift toward the Sunbelt states
  • City to suburb migration continues
  • More people moving to “micropolitan” areas
  • More people telecommute
better educated population
Better Educated Population
  • 1980:
    • 69% of people over age 25 completed high school
    • 17% had completed college
  • 2002:
    • 84% of people over age 25 completed high school
    • 27% had completed college
more white collar population
More White-Collar Population
  • 1950 – 1985:
    • Proportion of white-collar workers increased from 41% to 54%
    • Proportion of blue-collar workers declined from 47% to 33%
    • Proportion of service workers increased from 12% to 14%
  • 1983 – 1999:
    • Proportion of managers and professionals increased from 23% to >30%
increasing diversity
Increasing Diversity
  • U.S. is a “salad bowl”
    • Various groups mixed together, each retaining its ethnic and cultural differences
  • Increased marketing to:
    • Gay and lesbian consumers
    • People with disabilities
economic environment
Changes in Income

1980’s – consumption frenzy

1990’s – “squeezed consumer”

2000’s – value marketing

Income Distribution

Upper class

Middle class

Working class


Economic Environment

Consists of factors that affect consumer purchasing power and spending patterns.

natural environment
Natural Environment
  • Factors Impacting the Natural Environment:
    • Shortages of raw materials
    • Increased pollution
    • Increased government intervention
    • Environmentally sustainable strategies
technological environment
Technological Environment
  • Changes rapidly.
  • Creates new markets and opportunities.
  • Challenge is to make practical, affordable products.
  • Safety regulations result in higher research costs & longer time between conceptualization and introduction of product.
political environment
Political Environment
  • Includes Laws, Government Agencies, and Pressure Groups that Influence or Limit Various Organizations and Individuals In a Given Society.
  • Areas of concern:
    • Increasing legislation
    • Changing government agency enforcement
    • Increased emphasis on ethics and socially responsible behavior
cultural environment
Cultural Environment
  • The institutions and other forces that affect a society’s basic values, perceptions, preference, and behaviors.
  • Core beliefs and values are passed on from parents to children and are reinforced by schools, churches, business, and government.
  • Secondary beliefs and values are more open to change.
cultural environment25
Cultural Environment
  • Society’s major cultural views are expressed in people’s views of:
    • Themselves
    • Others
    • Organizations
    • Society
    • Nature
    • The universe
responding to the marketing environment
Responding to the Marketing Environment
  • Environmental Management Perspective
      • Taking a proactive approach to managing the environment by taking aggressive (rather than reactive) actions to affect the publics and forces in the marketing environment.
      • This can be done by:
        • Hiring lobbyists
        • Running “advertorials” (ads that express an editorial point of view)
        • Pressing law suits
        • Filing complaints
        • Forming agreements to control channels
video case

Video Case


(14 minutes)

  • Do you own Nike sneakers?
  • What is your perception of Nike as a company?
  • Who is Nike targeting?
    • Mission: