Chapter 1

Chapter 3

Analyzing
the
Marketing
Environment

Rest Stop: Previewing the Concepts

Describe the environmental forces that affect the

companys ability to serve its customers.

Explain how changes in the demographic and
economic environments affect marketing decisions.
Identify the major trends in the firms natural and
technological environments.
Explain the key changes in the political and cultural
environments.
Discuss how companies can react to the marketing
environment.

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Case Study
McDonalds Responding to Change
Challenges

Faced shifting consumer

lifestyles and a sales growth

slump of 3% between 1997
and 2000. Posted first
quarterly loss in 2002.
McDonalds was losing share
to the fast casual restaurant
segment because consumers
wanted healthier, bettertasting food in more upscale,
fashionable surroundings.
Named as the defendant in a
highly publicized law suit.
Response: Introduced Plan
to Win in early 2003.

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Plan to Win

Focused on consistent products and

reliable servicecore
competencies.
Introduced the Its what I eat and
what I do. . . Im loving it ad
campaign and revamped Web site to
help consumers understand how to
live balanced, active lives. Involved
nutrition experts in menu redesign.
Added upscale restaurants, such as
McCafe coffee shops and offered
healthier food options: Go Active!
Adult Happy Meal; white meat
McNuggets; various salads.
Results: Increased sales by 42%
while profits quadrupled.
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Marketing Environment
Consists of actors and forces outside of the
organization that affect managements
ability to build and maintain relationships
with target customers.
Studying

the environment allows marketers to take

advantage of opportunities as well as to combat
threats.
Marketing intelligence and research are used to
collect information about the environment.
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Marketing Environment
Includes:
Microenvironment:

Actors close to the company that affect its

ability to serve its customers.
Macroenvironment:
Larger societal forces that affect the
microenvironment.
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The companys Micro

Environment

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The Microenvironment
Company itself
Suppliers
Marketing intermediaries
Customers
Competitors
Publics
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The Company itself

Top management
Finance
R&D
Purchasing
Operations
Accounting
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The Microenvironment
The company itself:
Areas/departments

inside of a company.
Affects the marketing departments planning
strategies.
All departments must think consumer and
work together to provide superior customer
value and satisfaction.
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The Microenvironment
Suppliers:
Provide

resources needed to produce goods

and services.
Important link in the value delivery
system.
Most marketers treat suppliers like partners.

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The Microenvironment
Marketing intermediaries:
Help

the company to promote, sell, and

distribute its goods to final buyers.

Resellers
Physical distribution firms
Marketing services agencies
Financial intermediaries
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The Microenvironment
Customers:
Five

types of markets that may purchase a

companys goods and services.

Consumer
Business
Reseller
Government
International
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The Microenvironment
Competitors:
Those

who serve a target market with

products and services that are viewed by
consumers as being reasonable substitutes
for the firms products or services.
Company must seek to gain strategic
advantage against these organizations.
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The Microenvironment
Publics:
Any

group that has an interest in or impact on an

organizations ability to achieve its objectives.

Financial public
Media public
Government public
Citizen-action public
Local public
General public
Internal public
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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.

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The companys Macro

Environment

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The Macroenvironment
Forces in the macroenvironment can be
categorized as:
Demographic
Economic
Natural
Technological
Political
Cultural
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Demographics

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Demographic Environment
Demographics:
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 at home and abroad.
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Age structure

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Demographic Environment
The changing age structure of the U.S.
population is the single most important
demographic trend.
Baby

boomers, Generation X, Generation Y

and the Millennials are key generational
groups.

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Demographic Environment
Baby boomers:
78

million born between 1946 and 1964.

Nearly 30% of population.
Spend $2.3 trillion annually and hold of
the nations financial assets.
Spend $30 billion annually on anti-aging
products and services; strong market for
financial services, new housing, travel, etc.
Are likely to postpone retirement.
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Demographic Environment
Generation X:
49

million born between 1965 and 1976.

Defined by shared experiences:

Increased parental divorce rates and more

employed mothers made Generation X the

first of the latchkey kids.
Gen X developed a more cautious economic
outlook due to recessions and downsizing
that were common when they grew up.
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Demographic Environment
Generation X:
Cares

about the environment.

Prizes experience, not acquisition.
Family comes first, career second.
Skeptical of marketing messages; researches
purchases carefully, uses communities to
share information.
Represents close to $1.4 trillion in annual
purchasing power.
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Demographic Environment
Generation Y:
83

million born between 1977 and 2000larger

than baby boomer segment.
Includes tweens, teens, and young adults.
Ethnically diverse.
Fluent with computer and digital technology.
Personalization and product customization are key
to marketing success.
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Demographic Environment
The American family and household
makeup is changing:
Traditional

households are in decline:

Married couples with children = 23%

Non-traditional

households are growing:

Married without children = 29%

Single parents = 16%
Non-family households = 32%
Special

needs of non-traditional households are

increasingly being considered by marketers.

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Demographic Environment
Geographic shifts in population:
14%

of U.S. residents move each year.

General shift toward the Sunbelt states.
City to suburb migration continues.
More people are moving to micropolitan
areas.
More people telecommute:

1 in 10 people now work out of their home.

Home office segment is being targeted.

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Occupation shifts

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Demographic Environment
Better educated population:
1980:

69% of people over age 25 completed high

school; 17% had completed college.

2004:

86% of people over age 25 completed high

school; 28% had completed college.

Increasing

demand for quality products,

books/magazines, computers, travel, etc.

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Demographic Environment
Increasing white-collar population
19501985:

White-collar workers increased from 41% to 54%,

while blue-collar workers decreased from 47% to
33%.

19831999:

Professionals and managers increased from 23% to

greater than 30%.

20042012:

Professionals should increase by 21% while

manufacturing is expected to decline by 5%.

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More diversity

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Demographic Environment
Increasing diversity:
The

United States is an ethnic salad bowl.

Ethnic segments will continue to grow as a

percentage of the U.S. population.

Marketers target specially designed ads,
products, and promotions at ethnic groups.
Marketing

efforts are increasing toward:

Gay and lesbian consumers.

People with disabilities.
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Economic
Environment

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

Changes in income
1990sconsumption
frenzy, record debt
2000ssqueezed
consumer
Marketers focus on
offering greater value

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Income distribution
Upper class: getting
wealthier
Middle class: shrinking
in size
Working class
Underclass: remain poor

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Natural environment

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Natural Environment
Involves natural resources that are

needed as inputs by marketers or that

are affected by marketing activities.
Factors include:
Shortages

of raw materials
Increased pollution
Increased government intervention
Environmentally sustainable strategies
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Technological
Environment

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Technological Environment
Most dramatic force shaping our destiny.
Changes rapidly, creating new markets and
opportunities and/or danger of products
becoming obsolete.
Challenge is to make practical, affordable
new products.
Safety regulations result in higher research
costs and longer time between product
conceptualization and introduction.
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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.
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Cultural Environment
The institutions and other forces that affect
a societys basic values, perceptions,
preferences, 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.

Marketers may be able to change secondary beliefs,

but NOT core beliefs.

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Cultural Environment
Societys major cultural views are
expressed in peoples views of:
Themselves
Others
Organizations
Society
Nature
The
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universe
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Responding to the Marketing

Environment
Views on Responding

Responding to the
Marketing Environment

Reactive responses:
Many

firms simply react to changes in the

marketing environment.

Proactive responses:
Some

firms attempt to manage the

marketing environment via aggressive
actions designed to affect the publics and
forces in the marketing environment.

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Responding to the
Marketing Environment

Examples of proactive responses:

Hiring

lobbyists
Running advertorials
Pressing law suits
Filing complaints
Forming agreements to control channels

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Rest Stop: Reviewing the Concepts

Describe the environmental forces that affect the

companys ability to serve its customers.

Explain how changes in the demographic and
economic environments affect marketing decisions.
Identify the major trends in the firms natural and
technological environments.
Explain the key changes in the political and cultural
environments.
Discuss how companies can react to the marketing
environment.

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All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

Copyright 2009 Pearson Education, Inc.

Publishing as Prentice Hall
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