Principles of Marketing

The Marketing Environment(Micro and Macro environment )

Marketing Environment • Two types of marketing environment: • Micro-environment

– Consists of factors close to the company that affect its ability to serve its customers. The company itself, marketing channel firms, customer markets & a broad range of publics

• Macro-environment – Consists of the larger societal forces that affect the entire

microenvironment.– Demographic, economic, natural, technological, political,

competitor, and cultural forces

COMPANY’S MICROENVIRONMENT

• Marketing management’s job is to build relationships by creating customer value & satisfaction.

• The success of marketing plans requires working closely with the company’s microenvironment.

Company’s Microenvironments

• Suppliers are firms & individuals providing resources needed by the company to produce goods & services.

• Some hotels have contracted with restaurant companies to supply their food &beverage services

•Suppliers

•Company

•Competitors

•Marketing Intermediaries

Company’s Microenvironments

• Marketing managers must work closely with top management and the various company departments.

• The finance department is concerned with finding & using funds required to carry out the marketing plan.

• Top management sets the company mission, broad strategies, objectives, and policies.

• Under the marketing concept, all managers, supervisors, and employees should work in harmony to provide superior customer value and satisfaction.– all departments impact marketing plans & actions

•Suppliers

•Company

•Competitors

•Marketing Intermediaries

Company’s Microenvironments

• The marketing concept holds a successful company must satisfy the needs and wants of consumers better than its competitors.

• Both large and small firms must find marketing strategies that give them specific advantages over competitors operating in their markets.

•Suppliers

•Company

•Competitors

•Marketing Intermediaries

Company’s Microenvironments

• Marketing intermediaries help the company promote, sell, and distribute its goods to the final buyers.

• The Internet as a booking engine has created many opportunities, but it has also made interactions with intermediaries more complex.

• Marketing services agencies are suppliers that help formulate & implement marketing strategy & tactics..

•Suppliers

•Company

•Competitors

•Marketing Intermediaries

THE COMPANY MACRO-ENVIRONMENT

• The company and all of the other actors operate in a larger macro-environment of forces that shape opportunities and pose threats to the company.

Competitors • competitive products, substitute products for

one another, companies competing for your consumer’s purchasing power.

• A major effect on a business.• High barriers to exit from the industry present a

different set of competitive problems.

• Direct Competitive Products

Which would you buy?

– Indirectly Competitive Products– products than can be substituted for one another

– Plastic Containers vs. Glass vs. Tin vs. Aluminum – Sugar vs. Artificial Sweeteners – Typewriter vs. PC– Ocean Liner Vs. Air Travel

Demographic Forces

• Demography is the study of human populations in terms of size, location, age, gender, race, occupation, and other statistics.

• The demographic environment is of major interest to marketers because it involves people, and people make up markets

3

• Generation Y: Born between 1979 and 1994, size = marketing impact, fickle and skeptical group, techno’s

• Generation X: Born between 1965 and 1978, time premium, majority have children and houses, savvy and cynical consumers

• Baby Boomers: Born between 1946 and 1964Younger Boomers (ages 41 to 49)

– Home is the castle, spend on kidsOlder Boomers (ages 50 to 59)

– Spend on home upgrades & Holidays

Economic Forces • Factors influencing consumer buying power and

strategies (stage of the business cycle, inflation, unemployment, resources, income etc)

• Affecting consumer purchasing power & spending patterns.

• Marketers must pay close attention to major trends and consumer spending patterns both across and within their world markets.

Inflation and Deflation Inflation: The devaluation of money by reducing

what it can buy through continued price increases. Deflation: Falling prices

UnemploymentThe proportion of people in the economy who do not have jobs and are actively looking for work.

• Income– Discretionary income: the amount of money

people have to spend after paying bills and necessities.

• Resource Availability– Demarketing: reducing consumer demand for a

good or service to a level that the firm can supply.

Natural Forces

• The natural environment consists of many amenities that attract tourists, such as Conserve natural habitats, resources, endangered species, minimise environmental impact, recycling, energy efficient products and clean air.

• The natural environment involves natural resources needed as inputs by marketers or that are affected by marketing activities.

Technological Forces

• The technological environment: application of knowledge in science, inventions, and innovations to solve problems

• The most dramatic force shaping our destiny is technology– which has given us wireless Internet, the ability to send documents

around the globe electronically & inexpensive worldwide transportation

• Technology has affected hospitality in many ways:– e-Tickets allow customers to check themselves in at the airport. This

saves time for the customer andlabor for the airlines made communication easier

Toyota PriusHeating Technologies

Technology Advances Consumer Needs

Technology increases exponentially New technology as a key to long-term

competitive advantagecreate more efficient operation or

better productsmay render existing products

obsolete

6

Political Forces• Marketing decisions are strongly affected by

developments in the political environment. – laws, government agencies, and pressure groups that

influence & limit the activities of various organizations and individuals in society

• Legislation and regulation affecting business have been enacted for three reasons. – Protects companies from each others– Customer from unfair business practices– Society’s interest against unrestrained business

behavior

Cultural Forces• Core beliefs and values are passed on from

parents to children and are reinforced by schools, churches, business, and government.

• The cultural environment includes institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors. – people in any society hold persisting core beliefs

& values

Issues: • Obesity in Children• Negative Body Images• Video Games • Healthy Eating etc ..

Elements of Culture

1. Language2. Manners & Customs3. Technology & Material Culture4. Social Institutions – business, family5. Education –transmitting values, skills, attitudes etc6. Aesthetics – attitude toward beauty, art, music etc 7. Religion

20 of 36

World’s Religions (2014)

Religion can affect marketing strategy