© 2002 Pearson Education Canada Inc. 3-1 principles of MARKETING Chapter 3 The Marketing...

© 2002 Pearson Education Canada Inc.

3-1

principles of MARKETING

Chapter 3Chapter 3

The Marketing Environment


3-2

Chapter Objectives

• Describe environmental forces

• Describe demographic and economic impacts

• Identify trends in natural and technological environments

• Explain key changes in politics and culture

• Discuss how companies react to their marketing environment


3-3

Marketing Environments

The factors and forces outside marketing’s direct control that

affect marketing management’s ability to develop and maintain successful transactions with its

target customersMic

roen

vir o

nme n

t Macroenvironm

ent


3-4

Microenvironment:The Company

• Marketing success depends on others:– Other departments in the firm– Suppliers– Marketing intermediaries– Customers– Competitors– Relevant publics


3-5

Microenvironment: The Company’s Internal Environment

Topmanagement

Finance

R & D Purchasing

Manufacturing

Accounting

Marketing


3-6

Microenvironment:Suppliers

• Part of “value delivery system”

• Provide resources

• Supply availability can impact on company operations

• Price trends impact the company


3-7

Microenvironment: Marketing Intermediaries

• Help promote, sell, and distribute to final buyers

• Includes:– Resellers– Physical distribution– Financial services– Marketing services– Suppliers of materials


3-8

Microenvironment:Customers

Consumer markets

Business markets

Resellermarkets Government

markets

International markets

Company


3-9

Microenvironment:Competitors

Identify the company’s competitors

Assess competitorobjectives, strategies,strengths,

weaknesses,and reaction

patterns

Select whichcompetitors to

attack oravoid


3-10

Microenvironment:Publics

Financial

Media

GovernmentCitizenaction Local

General

Internal

Company


3-11

Macroenvironment

Demographic

Economic

Natural Techno-logical

Political

Cultural

Company


3-12

Macroenvironment:Demographics

• Size• Density• Location• Age• Sex• Race• Occupation• Other statistics


3-13

Demographic Environment:Changing Age Structure in Canada• Median age up from 25 to 38 in 30 years

• Long-term slowing of birth rate (1.55)

• Increasing life expectancy

• Population bulge due to baby boom

• “Baby dearth” of the 70’s

• Growth rates vary for different age groups

• “Whoopies” have 2/3 Canada’s disposable income


3-14

Demographic Environment:Changing Canadian Households

• Increasing non-family households

• Marrying later (25w, 28m)• Having fewer children (avg.

family size 3.1)• No children under 18 in

35% of all families• Increased divorce rates• Shift in couples roles


3-15

Demographic Environment:Population Growth and Shifts

• Population growth is 0.2%• Geographic shifts:

– Movement from rural to

urban areas– Movement from cities to suburbs

• 50% of population lives in top 25 Census Metropolitan Areas (CMA)


3-16

Demographic Environment:Better Educated, White-Collar

• 63% have diploma or higher

• 66% of workforce is white collar

• 28% professional or managerial

• More demand for quality products

• Less TV watching


3-17

Demographic Environment:Increasing Diversity

• Ethnicity:– Ethnic purchasing power

$300 billion

– Growing market size

– Avoid stereotyping

– Use native languages

– Choose ethnic media

• Sexual orientations• Disabilities


3-18

Macroenvironment:Economics

• Types of economies• Changes in income• New economy

paradoxes• Changing consumer

spending patterns


3-19

Macroeconomics:Natural Environment

• Growing shortage of raw materials

• Increased pollution• Increased government

intervention– Environmental Protection

Act (1989)

• Environmentally sustainable strategies


3-20

Macroenvironment:Technology

• Fast pace of change• Risk missed

opportunities• High cost of research

and development• Relatively low

Canadian investment– Multinational

companies may explain


3-21

Macroenvironment:Political

• Consists of laws, government agencies, and lobby groups

• Public policy

• Increasing legislation:– Protect companies from each other

– Protect consumers from unfair businesses

– Protect the interests of society

• NAFTA and The Competition Act


3-22

Macroenvironment:Political

• Ethics and social responsibility– Corporate codes and rules of ethics – Stress long run interests of consumers and the

environment– What’s right as well as what’s legal?– Difficulty of determining the right thing

• Cyberspace


3-23

Macroenvironment:Cultural

• Persistence of cultural values– Core vs. Secondary

• Core are Highly persistent• Secondary more open to change

– Views of themselves

– Views of others

– Views of organizations

– Views of society

– Views of nature

– Views of the universe

• Regional Differences


3-24

Responding to the Marketing Environment

• Passive analysis of opportunities and threats

• Active approach to publics and forces = environmental management perspective

• Find positive ways to overcome constraints

• Recognize forces beyond management control


3-25

Chapter Review

• What environmental forces affect companies?

• Identify, explain, and evaluate key changes and trends in demographics, economics, natural, technological, political, and cultural environments

• How do companies react to their marketing environment?

© 2002 Pearson Education Canada Inc. 3-1 principles of MARKETING Chapter 3 The Marketing...

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