Chapter 3: Analyzing the Marketing Environment

Question 1

First step of the marketing process

Answer 1

Understanding the marketplace and customer needs and wants

Question 2

Major environmental forces

Answer 2

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.

Question 3

Other actors in this environment

Answer 3

suppliers, intermediaries, customers, competitors, publics, and others—may work with or against the company.

Question 4

To develop effective marketing strategies, a company must first

Answer 4

understand the environment in which marketing operates.

Question 5

Marketing environment

Answer 5

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.

Question 6

The marketing environment consists of a ____ and a _________

Answer 6

microenvironment

macroenvironment.

Question 7

microenvironment

Answer 7

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

Question 8

macroenvironment.

Answer 8

consists of the larger societal forces that affect the microenvironment—demographic, economic, natural, technological, political, and cultural forces.

Question 9

The Company (micro)

Answer 9

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.

Question 10

Supplier (micro)

Answer 10

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.

Question 11

Marketing Intermediaries (micro)

Answer 11

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.

Question 12

Resellers

Answer 12

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.

Question 13

Physical distribution firms

Answer 13

help the company stock and move goods from their points of origin to their destinations.

Question 14

Marketing services agencies

Answer 14

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.

Question 15

Financial intermediaries

Answer 15

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.

Question 16

Competitors (micro)

Answer 16

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.

Question 17

Publics

Answer 17

any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives.

Question 18

We can identify seven types of publics:

Answer 18

1) FINANCIAL PUBLICS
2) MEDIA PUBLICS
3) GOVERNMENT PUBLICS
4) CITIZEN-ACTION PUBLICS
5) INTERNAL PUBLICS
6) GENERAL PUBLIC
7) LOCAL PUBLICS

Question 19

FINANCIAL PUBLICS

Answer 19

This group influences the company’s ability to obtain funds. Banks, investment analysts, and stockholders are the major financial publics.

Question 20

MEDIA PUBLICS

Answer 20

This group carries news, features, editorial opinions, and other content. It includes television stations, newspapers, magazines, and blogs and other social media.

Question 21

GOVERNMENT PUBLICS

Answer 21

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.

Question 22

CITIZEN-ACTION PUBLICS

Answer 22

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.

Question 23

INTERNAL PUBLICSS

Answer 23

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.

Question 24

GENERAL PUBLIC

Answer 24

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.

Question 25

LOCAL PUBLICS

Answer 25

This group includes local community residents and organizations. Large companies usually work to become responsible members of the local communities in which they operate.

Question 26

Customers (micro)

Answer 26

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

Question 27

Five types of customer markets

Answer 27

1) Consumer markets
2) Business markets
3) reseller markets
4) Government markets
5) international markets

Question 28

Consumer markets

Answer 28

consist of individuals and households that buy goods and services for personal consumption

Question 29

Business markets

Answer 29

buy goods and services for further processing or use in their production processes,

Question 30

Reseller markets

Answer 30

buy goods and services to resell at a profit.

Question 31

Government markets

Answer 31

consist of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them.

Question 32

international markets

Answer 32

consist of these buyers in other countries, including consumers, producers, resellers, and governments.

Question 33

Demography

Answer 33

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

Question 34

The Demographic Environment

Answer 34

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.

Question 35

The single most important demographic trend in Canada is the

Answer 35

changing age structure of the population

Question 36

The Baby Boomers

Answer 36

people born during the post–World War II baby boom from 1946 to 1965.

Question 37

Generation X

Answer 37

born between 1966 and 1980

Although they seek success, they are less materialistic than the other groups; they prize experience, not acquisition.

Question 38

Millennials

Answer 38

Born between 1981 and 1997, these children of the baby boomers number 8.6 million or more in Canada.

Question 39

Generation Z

Answer 39

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.

Question 40

The Changing Canadian Family

Answer 40

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.

Question 41

Geographic Shifts in Population

Answer 41

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.

Question 42

A Better-Educated, More White-Collar, More Professional Population

Answer 42

Statistics Canada reported that in 2016, 54 percent of Canadians aged 25 to 64 had completed post-secondary education (university or college)

Question 43

The Economic Environment

Answer 43

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

Question 44

The Natural Environment

Answer 44

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.

Question 45

A second environmental trend is increased pollution

Answer 45

Industry will almost always damage the quality of the natural environment.

Question 46

A third trend is increased government intervention in natural resource management.

Answer 46

The governments of different countries vary in their concern and efforts to promote a clean environment.

Question 47

environmental sustainability

Answer 47

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.

Question 48

The Technological Environment

Answer 48

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.

Question 49

The political environment

Answer 49

consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.

Question 50

Business legislation has been enacted for a number of reasons

Answer 50

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

Question 51

The Cultural Environment

Answer 51

consists of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviours.

Question 52

Core beliefs and values

Answer 52

are passed on from parents to children and are reinforced by schools, businesses, religious institutions, and government.

Question 53

Secondary beliefs and values

Answer 53

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.