Chapter 3: Analyzing the Marketing Environment Flashcards
First step of the marketing process
Understanding the marketplace and customer needs and wants
Major environmental forces
demographic, economic, natural, technological, political, and cultural—shape marketing opportunities, pose threats, and affect the company’s ability to engage customers and build customer relationships.
Other actors in this environment
suppliers, intermediaries, customers, competitors, publics, and others—may work with or against the company.
To develop effective marketing strategies, a company must first
understand the environment in which marketing operates.
Marketing environment
The actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.
Like Microsoft, companies must constantly watch and adapt to the changing environment—or, in many cases, lead those changes.
The marketing environment consists of a ____ and a _________
microenvironment
macroenvironment.
microenvironment
consists of the actors close to the company that affect its ability to engage and serve its customers—the company, suppliers, marketing intermediaries, customer markets, competitors, and publics
macroenvironment.
consists of the larger societal forces that affect the microenvironment—demographic, economic, natural, technological, political, and cultural forces.
The Company (micro)
In designing marketing plans, marketing management takes other company groups into account—groups such as top management, finance, research and development (R&D), purchasing, operations, human resources, and accounting.
All of these interrelated groups form the internal environment.
Supplier (micro)
They provide the resources needed by the company to produce its goods and services.
Supply shortages or delays, natural disasters, and other events can cost sales in the short run and damage customer satisfaction in the long run.
Marketing Intermediaries (micro)
Firms that help the company promote, sell, and distribute its products to final buyers.
They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries.
Resellers
are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers that buy and resell merchandise.
Physical distribution firms
help the company stock and move goods from their points of origin to their destinations.
Marketing services agencies
are the marketing research firms, advertising agencies, media firms, and marketing consulting firms that help the company target and promote its products to the right markets.
Financial intermediaries
include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods.
Competitors (micro)
Thus, marketers must do more than simply adapt to the needs of target consumers. They also must gain strategic advantage by positioning their offerings strongly against competitors’ offerings in the minds of consumers.
Publics
any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives.
We can identify seven types of publics:
1) FINANCIAL PUBLICS
2) MEDIA PUBLICS
3) GOVERNMENT PUBLICS
4) CITIZEN-ACTION PUBLICS
5) INTERNAL PUBLICS
6) GENERAL PUBLIC
7) LOCAL PUBLICS
FINANCIAL PUBLICS
This group influences the company’s ability to obtain funds. Banks, investment analysts, and stockholders are the major financial publics.
MEDIA PUBLICS
This group carries news, features, editorial opinions, and other content. It includes television stations, newspapers, magazines, and blogs and other social media.
GOVERNMENT PUBLICS
Management must take government developments into account. Marketers must often consult the company’s lawyers on issues of product safety, truth in advertising, and other matters.
CITIZEN-ACTION PUBLICS
A company’s marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and others. Its public relations department can help it stay in touch with consumer and citizen groups.
INTERNAL PUBLICSS
This group includes workers, managers, volunteers, and the board of directors. Large companies use newsletters and other means to inform and motivate their internal publics. When employees feel good about the companies they work for, this positive attitude spills over to the external publics.
GENERAL PUBLIC
A company needs to be concerned about the general public’s attitude toward its products and activities. The public’s image of the company affects its buying behaviour.
LOCAL PUBLICS
This group includes local community residents and organizations. Large companies usually work to become responsible members of the local communities in which they operate.
Customers (micro)
Customers are the most important actors in the company’s microenvironment
The aim of the entire value delivery network is to engage target customers and create strong relationships with them
Five types of customer markets
1) Consumer markets
2) Business markets
3) reseller markets
4) Government markets
5) international markets
Consumer markets
consist of individuals and households that buy goods and services for personal consumption
Business markets
buy goods and services for further processing or use in their production processes,
Reseller markets
buy goods and services to resell at a profit.
Government markets
consist of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them.
international markets
consist of these buyers in other countries, including consumers, producers, resellers, and governments.
Demography
the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics
The Demographic Environment
The demographic environment is of major interest to marketers because it involves people, and people make up markets.
Changes in the world demographic environment have major implications for business. Therefore, marketers keep a close eye on demographic trends and developments in their markets.
The single most important demographic trend in Canada is the
changing age structure of the population
The Baby Boomers
people born during the post–World War II baby boom from 1946 to 1965.
Generation X
born between 1966 and 1980
Although they seek success, they are less materialistic than the other groups; they prize experience, not acquisition.
Millennials
Born between 1981 and 1997, these children of the baby boomers number 8.6 million or more in Canada.
Generation Z
the young people born between 1998 and 2016. The almost 8.6 million Canadian Gen Zers—almost a quarter of Canada’s population—include the important kid, tween, and teen markets.
The Changing Canadian Family
The traditional household consists of a husband, wife, and children (and sometimes grandparents). Yet the historic Canadian ideal of the two-child, two-car suburban family is far from accurate these days.
Geographic Shifts in Population
The largest growth as a percentage of population came from some of Canada’s smallest provinces and territories, while central and western Canada experienced growth rates near the national average. Only Newfoundland and Labrador experienced a decline in population during this time period.
A Better-Educated, More White-Collar, More Professional Population
Statistics Canada reported that in 2016, 54 percent of Canadians aged 25 to 64 had completed post-secondary education (university or college)
The Economic Environment
consists of economic factors that affect consumer purchasing power and spending patterns. Economic factors can have a dramatic effect on consumer spending and buying behaviour
The Natural Environment
involves the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities. At the most basic level, unexpected happenings in the physical environment—anything from weather to natural disasters—can affect companies and their marketing strategies.
A second environmental trend is increased pollution
Industry will almost always damage the quality of the natural environment.
A third trend is increased government intervention in natural resource management.
The governments of different countries vary in their concern and efforts to promote a clean environment.
environmental sustainability
They are developing strategies and practices that create a world economy that the planet can support indefinitely. Environmental sustainability means meeting present needs without compromising the ability of future generations to meet their needs.
The Technological Environment
perhaps the most dramatic force now shaping our world.
Technology has released such wonders as antibiotics, air travel, the internet, smartphones, artificial intelligence, and driverless cars. It also has released such horrors as nuclear missiles and assault rifles.
The political environment
consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.
Business legislation has been enacted for a number of reasons
The first is to protect companies from each other.
The second purpose of government regulation is to protect consumers from unfair business practices
The third purpose of government regulation is to protect the interests of society against unrestrained business behaviour
The Cultural Environment
consists of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviours.
Core beliefs and values
are passed on from parents to children and are reinforced by schools, businesses, religious institutions, and government.
Secondary beliefs and values
are more open to change. Believing in marriage is a core belief; believing that people should get married early in life is a secondary belief.
