Chapter3: Analyzing The Marketing Environment

Question 1

Marketing environment

Answer 1

Outside forces that affect marketing management’s ability to build and maintain successful relationships with target customers.
Microenvironment: actors close to the company that affect its ability to serve its customers.
Macro environment: larger societal forces that affect the microenvironment.

Question 2

Actors in the microenvironment

Answer 2

The company (marketers must work in harmony with other company departments to create customer value and relationships).
Suppliers (in creating value for customers, marketers must partner with other firms in the company’s value delivery network).
Marketing intermediaries.
Competitors.
Publics.
Customers (customers are the most important actors in the company’s microenvironment. The aim of the entire value delivery system is to serve target customers and create strong relationships with them).

Question 3

The company

Answer 3

Interrelated groups in a company form the internal environment.
Departments share the responsibility for understanding customer needs and creating customer value.

Question 4

Suppliers

Answer 4

Provide the resources needed by the company to produce its goods and services.
Supplier problems seriously affect marketing:
- supply shortages or delays
- labor strikes
- price trends of key inputs

Question 5

Marketing intermediaries

Answer 5

Marketing intermediaries help the company to promote, sell, and distribute its products to final buyers.
- resellers
- physical distribution firms
- marketing service agencies
- financial intermediaries

Question 6

Competitors

Answer 6

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

Question 7

Publics/stakeholders

Answer 7

Any group that has an actual or potential interest in or impact on an organization’s ability to achieve it’s objectives:
Financial, media, government, citizen action, local, general, internal.

Question 8

Customers (5 types of customer markets)

Answer 8

Five types of customer markets
- consumer markets (B2C)
- business markets (B2B)
- reseller markets
- government markets
- international markets

Question 9

Major forces in the company’s macro environment

Answer 9

1. Demographic (changing demographics mean changes in markets and marketing strategies).
2. Economic
3. Natural (concern for the natural environment has spawned a so-called green movement).
4. Technological
5. Political
6. Cultural (marketers also want to be socially responsible clients in their markets and communities)

Question 10

Demographic environment

Answer 10

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

Marketers analyze:
- changing age and family structures.
- geographic population shifts.
- educational characteristics.
- population diversity.

The Canadian population contains several generational groups:
- baby boomers
- generation X
- millennials/Generation Y
- generation Z
- generational marketing

Question 11

Economic environment

Answer 11

Economic factors affect customer purchasing power and spending
- changes in consumer spending
- differences in income distribution

Question 12

Natural environment

Answer 12

Physical environment and natural resources needed as inputs by marketers or affected by marketing activities
- environmental sustainability concerns have grown steadily over the past three decades.

Trends (marketers must be aware of):
- shortages of raw materials
- increased pollution
- increased government intervention

Question 13

Technological environment

Answer 13

New technologies create new markets and opportunities.
- digital technology
- radio-frequency identification (RFID) is technology to track products through various points in the distribution channel.

Question 14

Political environment

Answer 14

Forces that influence or limit various organizations and individuals in a society.
- laws, government agencies, and pressure groups.

1. Protect companies from each other.
2. Protect consumers from unfair business practices.
3. Protect interests of society against unrestrained business behaviour.

Question 15

Cause-related marketing

Answer 15

Companies use cause-related marketing to
- exercise their social responsibility
- build more positive images

Primary form of corporate giving.

Controversy - strategy for selling more rather than a strategy for giving.
There is a fine line between improved images and perceptions of exploitation or inauthenticity.

Question 16

Cultural environment

Answer 16

Institutions and other forces that affect a society’s basic values, perceptions, and behaviours.

Persistence of cultural values:
- core beliefs and values have a high degree of persistence.
- secondary beliefs and values are more open to change.

Shifts in secondary cultural values of people’s views about:
- themselves (people vary in their emphasis on serving themselves versus serving others).
- others (people’s attitudes toward and interactions with others shift over time).
- organizations (people vary in their attitudes toward corporations).
- society (people’s orientation to their society influences their consumption patterns and attitudes toward the marketplace).
- nature (people vary in their attitudes toward the natural world).
- universe (people vary in their beliefs about the origin of the universe and their place in it).

Question 17

Responding to the marketing environment

Answer 17

Reactive firms passively accept the marketing environment and do not try to change it.

Proactive firms develop strategies to change the environment:
They take aggressive actions to affect the publics and forces in their marketing environment.