Chapter 3 Analyzing the Marketing Environment Friday February 12 2016 6 32 PM Key Points Environmental forces affect the company s ability to serve its customers Macro and Micro environments affect marketing decisions How do companies and marketers adapt to Macro and Micro forces Microsoft Adapting to it s New Environment The success of Windows increased Microsoft s revenues profits and stock price A lag occurred after the millennium from decreased PC sales growth People moved on with new digital devices and technologies Transformation released new improved or acquired digital products and services Marketing Environment Outside forces that affect marketing management s ability to build and maintain successful relationships with target customers Microenvironment Actors close to the company that affect its ability to serve its customers Macroenvironment Larger societal forces that affect the microenvironment Actors in the Microenvironment of a Company s Marketing Environment This figure shows the major actors in the marketer s microenvironment In designing marketing plans marketing management takes other company groups into account Suppliers provide the resources needed by the company to produce its goods and services Supplier problems can seriously affect marketing Marketing intermediaries help the company promote sell and distribute its products to final buyers They include resellers physical distribution firms marketing services agencies and financial intermediaries Marketers must gain strategic advantage by positioning their offerings strongly against competitors offerings in the minds of consumers A public is any group that has an actual or potential interest in or impact on an organization s ability to achieve its objectives These include financial media government citizen action local publics general and internal publics Customers are the most important actors in the company s microenvironment Customers include consumer markets business markets reseller markets and international markets Major Forces in the Company s Macroenvironment This figure shows the six major forces in the company s macroenvironment Each of these forces are discussed in greater detail in the following slides Responding to the Marketing Environment Reactive firms passively accept the marketing environment and do not try to change it and direct efforts to understand and adapt to it Many companies view the marketing environment as an uncontrollable element to which they must react and adapt Proactive firms develop strategies to change the environment They take aggressive actions to affect the publics and forces in their marketing environment Hire lobbyists influence legislation Editorials and blogs Marketing management cannot always control environmental forces In many cases it must settle for simply watching and reacting to the environment For example a company would have little success trying to influence geographic population shifts the economic environment or major cultural values But whenever possible smart marketing managers take a proactive rather than reactive approach to the marketing environment US Demographic Environment Demography Study of human populations in terms of size density location age gender race occupation and other statistics Marketers analyze Changing age and family structures Geographic population shifts Educational characteristics Population diversity Consumer Groups 1 Baby Boomers 1946 to 1964 Affluent aging 25 of the US population conservative out of the 1930s depression entering new phase of life living longer travel 2 Generation X 1965 to 1976 Smaller group family first quality oriented less materialistic skeptical prove it to me group first to embrace the internet and new tech research products more completely smart phones FACEBOOK 3 Millennials Generation Y 1977 to 2000 Debt large group of 83M technology children of Boomers this is YOU highest unemployment little savings tech comfort the telecom and communications generation 4 Generation Z 2000 to current Kids and teen markets with fluent tech navigation skills spend their own money and their parents Other US demographics marketing watches closely Married couples with children on the decline Women comprise 58 of the US workforce Non traditional households of all varieties on the rise Migration to urban areas continue Population movements South Better education means growth of professional workers and a decrease in manufacturing workforce Diversity of all varieties have created new markets needs and wants Other US Global Demographics Changing American family Better educated population more white collar jobs with decline in manufacturing Increasing diversity ethnic and racial and sexual identification and immigration status Economic environment purchasing power and spending patterns and income distribution Natural environment green global warming physical environment SUSTAINABILITY Technology is likely the fastest changing and impactful robotics marketing opportunities government intervention telecommunications etc Economics 1 Economic factors that affect consumer purchasing power and spending patterns Industrial economies rich markets for many different kinds of goods consume most of their own agricultural and industrial output and offer few can offer outstanding marketing opportunities for the right kinds of Subsistence economies market opportunities Developing economies products 2 3 Changed in consumer spending Differences in income distribution Natural Environment Physical environment and natural resources needed as inputs by marketers or affected by marketing activities Environmental sustainability concerns have grown steadily over past three decades Trends Shortages of raw materials Increased pollution Climate change Natural disasters More government intervention EPA Technological Environment New technologies create new markets and opportunities Radio frequency identification RFID is technology to track products through various points in the distribution channel Social media and smart phones Artificial intelligence Touch screens GPS enabled technologies Digital tech and high speed computing Robotics Bio tech Political Environment The political environment represents forces that influence and limit various organizations and individuals in a society Laws government agencies and pressure groups Goals of enacting business legislation Protect companies from each other Protect consumers from unfair business practices