Chapter 3 Analyzing the Marketing Environment 5 18 15 5 19 15 Objectives customers Describe the environmental forces that affect the company s ability to serve its 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 Marketing Environment The actors and forces outside marketing that affect marketing management s ability to build and maintain successful relationships with target customers Companies constantly watch and adapt to the changing environment or lead those changes Microenvironment The actors close to the company that affect its ability to serve its customers the company suppliers marketing intermediaries customer markets competitors and publics Macroenvironment The larger societal forces that affect the microenvironment demographic economic natural technological political and cultural forces Success comes from building relationships with other departments suppliers marketing intermediaries competitors various publics and customers All company groups top management finance R D purchasing operations accounting form the internal environment All parts share responsibility for understanding customer needs and creating The Microenvironment The Company customer value Suppliers rising supply costs Marketing Intermediaries Provide the resources need by the company to produce its goods and services Marketers must watch supply availability and costs Problems include supply shortages or delays labor strikes natural disasters and Marketing Intermediaries Firms that help the company to promote sell and distribute its goods to final buyers Resellers Distribution channel firms that help the company find customers or make sales to them o Include wholesalers and retailers o Selecting and partnering is not easy o Have enough power to dictate terms or shut smaller manufacturers out of large market o Ex Wal Mart Target Costco Best Buy Physical Distribution Firms Help the company stock and move goods from their points of origin to their destinations Marketing Services Agencies Help the company target and promote its products to the right markets o Ex Marketing research firms advertising agencies media firms and marketing consulting firms Financial Intermediaries Help finance transactions or insure against the risks associated with the buying and selling of goods o Ex Banks credit companies insurance companies and other businesses Many companies today recognize the importance of marketing intermediaries and consider them partners rather than channels for distribution Competitors than its competitors do To be successful company must provide greater customer value and satisfaction Marketers look to gain strategic advantage by positioning their offerings strongly against competitor s offerings in minds of consumers Different strategies for small and large firms Publics Public Any group that has an actual or potential interest in or impact on an organization s ability to achieve its objectives 7 types of publics 1 Financial Influences the company s ability to obtain funds Ex banks investment analysts and stockholders 2 Media Carries news features and editorial opinion Ex newspapers magazines TV stations blogs and other internet media 3 Government Management must take government developments into account Marketers must often consult with company s lawyers on issues of product safety truth in advertising and other matters 4 Citizen Action 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 and citizen groups 5 Local Companies usually create departments and programs that deal with community issues and provide community support Ex Neighborhood residents and community organizations 6 General Need to be concerned about the general public s attitude towards its products and activities Public image affects buying 7 Internal Companies use newsletters and other means to inform and motivate their internal publics When employees feel good about the companies this positive attitude spills over to the external publics Ex workers managers volunteers board of directors Customers Most important actors in the microenvironment 5 Types of Customer Markets 1 Consumer Individuals and household that buy goods and services for 2 Business Buy goods and services for further processing or use in their personal consumption production processes 3 Reseller Buy goods and services to resell at a profit 4 Government Government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them 5 International Buyers in other countries including consumers producers resellers and governments The Macroenvironment Shape opportunities and pose threats to the company The Demographic Environment Demography The study of human populations in terms of size density location age gender race occupation and other statistics Changes in the world demographic environment have major implications for businesses Must keep a close eye on changing demographic trends and developments o Age o Family structures o Geographic population shifts o Educational characteristics o Population diversity The Changing Age Structure of the Population o Baby Boomers The 78 million people born during the years following WWII and lasting until 1964 One of the most powerful forces shaping the marketing environment Many spend more carefully and planning to work longer Many function with a youthful mindset Need lots of financial management help as they approach retirement o Generation X The 49 million people born between 1965 and 1976 in the Still the wealthiest generation in U S history birth dearth following the baby boom Sometimes overlooked as consumers Less materialistic than other groups Prize experience not acquisition Family comes before careers Typically more skeptical Tend to research products before they consider a purchase prefer quality to quantity and tend to be less receptive to overt marketing pitches Most educated generation Also starting to spend more carefully o Millennials Generation Y The 83 million children of the baby boomers born between 1977 and 2000 Becoming larger than the baby boomers Most financially