Chapter 3

Question 1

Marketing environment

Answer 1

: the outside forces that affect marketing management’s ability to build and maintain successful relationships with target customers.

Question 2

Microenvironment

Answer 2

• Forces with direct impact to the company
• Internal and external

Question 3

Macroenvironment

Answer 3

• External forces with direct impact across industries

Question 4

Actors in microenvironments

Answer 4

• The company
• Suppliers
• Marketing intermediaries
• Competitors
• Publics
• Customers

Question 5

The company

Answer 5

• Interrelated groups in a company form the internal environment.
• Departments share responsibility for understanding customer needs and creating customer value.
• Examples: what can the finance department afford, is purchase department able to satisfy the requirements requested.

Question 6

Suppliers

Answer 6

• Provide resources needed by the company to produce its goods and services.
• Suppliers can seriously affect marketing.
• Marketing managers must watch supply availability and costs.
• Supply shortages, delays, natural disasters can damage customer satisfaction.

Question 7

Marketing intermediaries

Answer 7

• Help the company to promote sell and distribute its products to final buyers.
  o Resellers: include distribution channel firms such as wholesalers and retailers
  o Physical distribution firms: example, fedex
  o Marketing agencies: include marketing research firms, advertising agencies, media firms, and marketing consulting firms
  o Financial intermediaries: include banks, credit companies, insurance companies.

Question 8

Competitors

Answer 8

• Marketers must gain strategic advantage by positioning products strongly against competitors.
• No single strategy is best for all companies.

Question 9

Public

Answer 9

• Is any group that has an actual or potential interest in or impact on an organizations ability to achieve its objective.
• There are 7 types of publics.
  o Financial public – influences company’s ability to obtain funds
  o Media – news, editorial opinions, tv stations, newspapers, blogs, social media.
  o Government – management must take government developments into account. Consult company’s lawyer etc.
  o Citizen-action – marketing decision may be questioned by consumer organizations, env groups etc
  o Internal – when employees feel good about the company, they work for this positive attitude spills over to the external publics.
  o General – general public’s attitude towards its products and activities. Public image of the company affects buying behavior.
  o Local – local communities, large companies usually try to become responsible members of the local community.

Question 10

Customers

Answer 10

• Most important actors in company’s microenvironment
• 5 types of consumer markets
  o Consumer markets – individuals and households that buy g&s for personal consumption.
  o Business markets – buy g&s for further processing or use in production processes.
  o Reseller markets – buy g&s to resell for a profit
  o Government markets – gov agencies buy g&s to produce public services or transfer the g&s to others who need them
  o International markets – consists of these buyers in other countries, including consumers, producers resellers and government.

Question 11

Actors in Macroenvironment

Answer 11

Major forces
- Demographic
- Economic
- Natural
- Technological
- Political
- Cultural

Question 12

The demographic environment

Answer 12

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

Markets analyze:
- Changing age and family structures
- Geographic population shifts
- Educational characteristics
- Population diversity.
Strategic decisions often based upon shifts in demographics

Question 13

Demographic considerations

Answer 13

• The changing Canadian family
  o Fewer families have children
  o More dual-income families
• A better educated white collar population
  o Increased demand for higher quality
  o Increased understanding of value
  o Creates demand for variety
• Increasing diversity
  o Large and growing visible minority market
  o Growth in recognized disabilities
  o Acceptance of LGBT and gay marriages

Question 14

The economic environment

Answer 14

Consist of economic factors that affect consumers purchasing power and spending patterns
Factors that affect spending
1. Changes in income
a. Consumption frenzy, record personal debt
b. Economic crisis leading to consumers frugality
c. Value marketing is key to success
2. Changes in spending patterns
a. Consumers at different income levels have different spending patterns

Question 15

Natural environment

Answer 15

• Physical environment and natural resources needed as inputs by marketers or affected by marketing activities
  Strategic decisions around creating environmentally sustainable products

Question 16

Technological environment

Answer 16

Technology advances
- Creating new markets and opportunities
- Increasing obsolescence
- Accelerating customer needs
- Resulting in constantly evolving regulations

Governments bans unsafe products and sets safety standards.

Question 17

The cultural environment

Answer 17

• Conditions, experiences, attitudes, values, beliefs
  Standard acceptable belief system that affects a societys basic values:
• Core beluefs slow to change
• Secondary beliefs are more open to change