CHAPTER 2

MARKETING ENVIRONMENT
&
MARKETING ETHICS
 WHAT IS MARKETING ENVIRONMENT?
 Kotler (2001) has defined the marketing environment as the actors and forces outside marketing
that affect marketing management’s ability to develop and maintain successful transactions with
its target customers.

MARKETING ENVIRONMENT CONSISTS OF TWO ENVIRONMENTS :-

1. Microenvironment
 it consists of the company’s immediate environment that affect its ability to serve its
customers.
2. Macro-environment
 it consists of societal forces that affect all the actions in the company’s microenvironment.
Actors in the microenvironment
 THE EXTERNAL MARKETING ENVIRONMENT

 There are six forces in the company’s external marketing environment or

the “macro-environment”

1. Demographic Factor:
 The statistical study of human population and its distribution
characteristics.
 Demographic characteristics include birth, age, sex, family, race, education,
ethnicity, occupation and other statistics of people.
Demographic Factors

Demography The study of people’s vital

statistics, such as their age,
race and ethnicity, and
location.
 Tweens
 Pre- and early adolescents, age 8 to 14
 Population of 29 million
 Purchasing power of $39 billion in 2007
 View TV ads as “just advertising”
 Emerging as “the richest generation” and the “most
influential generation in history”
 Generation Y
Born between 1979 and 1994
Population of 60 million
Purchasing power of $200 billion annually
Researchers have found Gen Yers to be:
 Impatient
 Family-oriented
 Inquisitive
 Opinionated
 Diverse
 Time managers
 “Street Smart”
Word of mouth marketing
is effective
 Generation X
Born between 1965 and 1978
Population of 40 million
expertise and pessimistic consumers
Time is at a premium, and outsourcing is
utilized
Entering their money-making years
 Baby Boomers
Born between 1946 and 1964
Population of 77 million—
the largest demographic segment
$1 trillion in spending power for people
aged 50 to 60
Income will continue to grow as they keep
working
Four segments of baby boomers:
“Looking for balance”
“Confident and living well”
“At ease”
2. Social and Cultural Factor
It consists of the demographic characteristics, customs and
values of the population within which the marketing firms
are operating.
This environment also made up of the beliefs, attitudes,
customs and cultural practices of every group in society. (the
aim of every business to succeed and make profits.
3. Economic Factor
 A country’s economy determine the size and strength of demand for
various kind of goods and services.
 There are 3 economics area that all marketers must be very concerned
of:
 Rising consumer income
 Inflation
 Recession

4.Technological and Resource Factors

 Technology is the knowledge of how to accomplish tasks and
goals and often this knowledge comes from scientific research.
 Major technological break-through carry a threefold market
impact. They can:
 Start an entirely new industry
 Radically alter or virtually destroy existing industries
 Stimulate other markets and industries not related to the new
technology
 Natural resources are required by businesses as inputs to produce
goods demanded by customers. The forces of nature have several
impacts on the overall decision of the marketer:
 Increased cost of energy has for example forced the price of oil to
increase. Marketers may resort to use solar, wind and water as
sources of energy.
 Increased levels of pollution. (produce recyclable products,
ecologically safe products, and biodegradable packaging)

5. Political and Legal Factors

 The political / legal influences on marketing can be grouped
into 4 categories:-
 General monetary and fiscal policies.
 Broad social legislation and policies set by regulatory agencies.
 Government relationship with individual industries.
 Laws affecting marketing itself.
 In each, the influence stems both legislation and from policies
established by government regulatory agencies.
6. Competitive Factors
 Competition exits everywhere in the market place.
 Among competitive factors marketers need to be constantly alert include:-
 Competition for market share and profits
 Global Competition

ETHICAL BEHAVIOR IN BUSINESS

Definition of Ethics:

According to Lamb in “Marketing”, ethics refers to the moral

principles or value that generally govern the conduct of an
individual or a group. Morals are the rules people develop as a
result of cultural values and norms.

 Business ethics also involve moral values in our society. Values are
accepted standards of behavior within a given society. Societies
develop broad-based values that are generally accepted by most of
its members.
 There are many unethical practices that Marketing Managers must observe and
carefully need to deal with:-
 False and misleading advertisement
 Misleading products or service warranty
 Price discrimination
 Unsafe products or services
 Unfair remarks about competitors and their products

CORPORATE SOCIAL RESPOSIBILITIES

Definition of CSR:

Corporate Social Responsibility is a business’s obligation, and concern for

society’s welfare practiced by business managers taking into consideration
the best interest of society and the well beings of the company.
 PYRAMID OF CORPORATE SOCIAL
RESPONSIBILITY
THANK
YOU…