The MarketingEnvironment

Chapter 4Chapter 4

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Objectives

• Know the environmental forces Know the environmental forces that affect the company’s ability that affect the company’s ability

to serve its customers.to serve its customers.

• Realize how changes in the Realize how changes in the demographic and economic demographic and economic environments affect marketing environments affect marketing decisions.decisions.

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Objectives

• Identify the major trends in the Identify the major trends in the firm’s natural and technological firm’s natural and technological environments.environments.

• Know the key changes in the Know the key changes in the political and cultural environments.political and cultural environments.

• Understand how companies can Understand how companies can react to the marketing react to the marketing environment.environment.

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Case Study

• ““Millennial fever” Millennial fever” set the stage to set the stage to bring back the bring back the BeetleBeetle

• VW’s investment: VW’s investment: $ 560 million $ 560 million

• Demand quickly Demand quickly outstripped supplyoutstripped supply

• The new VW beetle The new VW beetle enjoyed cross-enjoyed cross-generational appealgenerational appeal

• Earned many Earned many awardsawards

• Beetle now Beetle now accounts for over accounts for over 25% of company 25% of company salessales

VolkswagenVolkswagen

Discussion:Discussion: Will the flower-power Microbus Will the flower-power Microbus succeed next?succeed next?

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Key Environments

• Marketing EnvironmentMarketing Environment The actors and forces that affect a The actors and forces that affect a

firm’s ability to build and maintain firm’s ability to build and maintain successful relationships with successful relationships with customers.customers.

Aspects of the marketing Aspects of the marketing environment:environment: MicroenvironmentMicroenvironment MacroenvironmentMacroenvironment

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Actors Affecting a Firm’s Actors Affecting a Firm’s Ability Ability

to Serve Customersto Serve Customers

The Microenvironment

•CompanyCompany

•SuppliersSuppliers

•Customer Customer MarketsMarkets

•CompetitorsCompetitors

•PublicsPublics

•Marketing Marketing IntermediarieIntermediariess

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The Microenvironment

• Departments within the company Departments within the company impact marketing planning.impact marketing planning.

• Suppliers help create and deliver Suppliers help create and deliver customer value.customer value. Treat suppliers as partners.Treat suppliers as partners.

• Marketing intermediaries help sell, Marketing intermediaries help sell, promote, and distribute goods.promote, and distribute goods. Intermediaries take many forms.Intermediaries take many forms.

• Marketing services agencies are Marketing services agencies are suppliers that help the firm suppliers that help the firm formulate and implement its formulate and implement its strategy and tactics. These strategy and tactics. These suppliers include public relations suppliers include public relations agencies, advertising agencies agencies, advertising agencies etc. They work directly with the etc. They work directly with the company’s marketing program company’s marketing program and promote their products to and promote their products to target market.target market.

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• Financial intermediaries include Financial intermediaries include banks, credit companies, banks, credit companies, insurance companies, and other insurance companies, and other companies finance their companies finance their transactions, insure the risks transactions, insure the risks associated.associated.

• Competitors:Competitors:

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The Macroenvironment

• Customer markets must be studied.Customer markets must be studied. Consumer, business, government, reseller Consumer, business, government, reseller

and international markets exist.and international markets exist.

• Successful companies provide better Successful companies provide better customer value than the competition.customer value than the competition. Size and industry position help to Size and industry position help to

determine the appropriate competitive determine the appropriate competitive strategy.strategy.

• Various publics must also be Various publics must also be considered.considered.

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Types of PublicsTypes of Publics

The Microenvironment

•FinancialFinancial

•MediaMedia

•GovernmentGovernment

•LocalLocal

•GeneralGeneral

• InternalInternal

• Citizen ActionCitizen Action

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Macroenvironmental ForcesMacroenvironmental Forces

The Macroenvironment

•DemographiDemographicc

•EconomicEconomic

•NaturalNatural

•TechnologicTechnologicalal

•PoliticalPolitical

•CulturalCultural

Demographic Factors

Demographic Factors

Changing Age StructureChanging Age Structure

Changing Family StructureMarrying later, fewer children,

working women, and nonfamily households

Changing Family StructureMarrying later, fewer children,

working women, and nonfamily households

Geographic ShiftsMoving to the urban areas

Geographic ShiftsMoving to the urban areas

Increased EducationIncreased college attendance

and white-collar workers

Increased EducationIncreased college attendance

and white-collar workers

Worldwide Population GrowthWorldwide Population Growth

Population Age MixPopulation Age Mix

Household PatternsHousehold Patterns

Marketing for Hospitality and Tourism, 3e

©2003 Pearson Education, Inc.Philip Kotler, John Bowen, James Makens

Upper Saddle River, NJ 07458

14

Global EconomicDevelopment

Global EconomicDevelopment

Changes in IncomeChanges in Income

Changing ConsumerSpending Patterns

Changing ConsumerSpending Patterns

KeyEconomic

Concerns forMarketers

KeyEconomic

Concerns forMarketers

Economic Environment

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The Macroenvironment

• The Natural EnvironmentThe Natural Environment Concern for the natural Concern for the natural

environment has grown steadily, environment has grown steadily, increasing the importance of these increasing the importance of these trends:trends: Shortage of raw materialsShortage of raw materials Increased pollutionIncreased pollution Increased governmental interventionIncreased governmental intervention

• The natural envt consists of many The natural envt consists of many amenities that attract the amenities that attract the touriststourists such such as forests, clean beaches, wildlife , clean as forests, clean beaches, wildlife , clean air may be lost. Anyone involved in air may be lost. Anyone involved in tourism has an obligation to protect the tourism has an obligation to protect the environment and develop sustainable environment and develop sustainable tourism. One way of protecting the envt tourism. One way of protecting the envt is to recycle and reduce wasteis to recycle and reduce waste..

• For eg McDonald’s has developed a recycling program. For eg McDonald’s has developed a recycling program. McDonald’s eliminated polystyrene cartons and now McDonald’s eliminated polystyrene cartons and now uses smaller, recyclable paper wrappings and napkins. uses smaller, recyclable paper wrappings and napkins. The company has a commitment to purchasing recycled The company has a commitment to purchasing recycled products and energy efficient restaurant construction products and energy efficient restaurant construction techniques.techniques.

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The Macroenvironment

• Key Technological Trends Key Technological Trends The technological environment is The technological environment is

characterized by rapid change.characterized by rapid change. New technologies create new New technologies create new

opportunities and markets but opportunities and markets but make old technologies obsolete.make old technologies obsolete.

The U.S. leads the world in The U.S. leads the world in research and development research and development spending.spending.

• Internet is a great source of information for Internet is a great source of information for travellerstravellers

• Coffee shops are wi fi enabled now.Coffee shops are wi fi enabled now.

• E tickets on airports, smart cards on railway E tickets on airports, smart cards on railway stations etc. stations etc.

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• The Political EnvironmentThe Political Environment Includes laws, governmental agencies, and Includes laws, governmental agencies, and

pressure groups that impact organizations pressure groups that impact organizations and individuals. Key trends include:and individuals. Key trends include: Increased legislation to protect businesses Increased legislation to protect businesses

as well as consumers. as well as consumers. Changes in governmental agency Changes in governmental agency

enforcement.enforcement.To enforce laws govt has established several federal To enforce laws govt has established several federal

regulatory agencies : the food and drug regulatory agencies : the food and drug administration, consumer products safety administration, consumer products safety commission etc.commission etc.

Increased emphasis on ethical behavior Increased emphasis on ethical behavior and and social responsibility. social responsibility.

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The Macroenvironment

• The Cultural EnvironmentThe Cultural Environment Is composed of institutions and other Is composed of institutions and other

forces that affect a society’s basic values, forces that affect a society’s basic values, perceptions, preferences, and behaviors.perceptions, preferences, and behaviors.

Culture can influence decision making.Culture can influence decision making. Core beliefs are persistent; secondary Core beliefs are persistent; secondary

cultural values change and shift more cultural values change and shift more easily.easily.

The cultural values of a society are The cultural values of a society are expressed through people’s views.expressed through people’s views.