Chapter 3: Analyzing the Market Environment

Re-sellers

are distribution channel firms that help the company or organization find consumers or make sales to them, such as Target, Walmart, and Costco.

Physical distribution

firms assists the company stock and more goods from their points of origin to their destinations.

Demography

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

1. The Company 2. Suppliers 3. Marketing Intermediaries 4. Competitors 5. Public 6. Customers

What are the six steps of marketing?

Business legislation has been created because it first protects companies form each other. Second purpose of government legislation is to protect consumer from unfair business practices. Lastly, the third purpose is to protect the interest of society against unrestrained business behaviors.

Why has business legislation been created?

General publics

a company must be concerned about the general public's attitude toward its products and activities.

Government publics

management needs to take government developments into account. So markets sometimes need to consult the company's lawyers on issues of truth in advertising, product/safety and other matters.

Many companies view the environment of the market as an uncontrollable element which they need to react and change. They positively accept the marketing environment as it is and does not do anything to change it. They analyze the environmental forces and designs techniques that will help the company avoid the treats and advantages of the opportunities the environment has given them. While other companies take a proactive approach towards the marketing environment which they create strategies to change the marketing environment.

How can companies react ton the marketing environment?

There are two environmental forces that affect the company's ability to serve are micro-environment and macro-environment.

What are the two environmental forces that affect the company's ability to serve its customers?

Cultural environment

contains institutions and other forces that impact a society's basic perceptions, values, preferences, and behaviors.

Financial publics

this group influences the company's ability to obtain funds. The major financial __________ are banks, stockholders, and investment analysis.

Local publics

this groups consists of neighborhood residents and community organizations. Giant and large companies or organizations usually strive to become responsible members of the local communities in which they operate. For example, Office Depot serves its communities through the Office Depot Foundation which is an independent, non-profit foundation, that serves as Office Depot's main charitable giving arm.

Internal publics

this groups contains volunteers, workers, managers, and the board of directors. Giant companies use newsletters and other methods to inform and motivate their internal publics.

Media publics

this groups, carriers news features, editorial opinions, and other content through television stations, blogs, magazines, newspapers, and other social media.

Any group that has an actual or potential interest in or impact on an organization's ability to achieve its goals is called a public.

What is a public?

Financial intermediaries

consist of banks, insurance companies, credit companies, and other businesses that help finance transactions or insure against the chance associated with the purchasing and selling of goods.

The political environment

contains laws, government agencies, and pressure groups that influence or limit various organization and people in a given society.

Natural environment

contains the physical environment and the natural re that are needed as inputs by marketer or that are affected by marketing activities.

Marketing intermediaries

quest to create satisfying customer relationships. The company needs to more than just optimize its own performance.

Besides companies targeting people who are diverse and from different backgrounds, companies also explicitly target customers who are gay and lesbian. According to one estimate, the 6 to 7 percent of the gay, lesbian, transgender or bisexual have a buying power of more than $830 billion.

Besides companies targeting people who are diverse and from different backgrounds what else do they target?

Millennials were babies that were born between 1977 to 2000, which is the most financial strapped generation. They face higher unemployment and saddled with more debt, most of these young customers have close to empty bank accounts, but still because of their numbers, Millennial make up a huge and attractive market now and in the future. Lastly, this generation seek authenticity and opportunities to shape their own brand experiences and share them with others.

What are Millennials and what are their forces in the marketing environment?

Consumer markets consists of individual and households that buy goods and services for personal consumption. Business markets buy services and goods for further processing or use in their production processes on their other hand re-seller markets buy services and goods to re-sell for profit.

What are consumer markets?

The key changes to the cultural environment toward new social communication through technology, increasing patriotism, a changing spiritualism, greater appreciation for nature, a lessening trust of institutions and the search for more meaningful and enduring values.

What are key changes to the cultural environment?

Marketing intermediaries help the company promote, sell, and distribute its products to final purchasers. They consist of physical distribution firms, re-sellers, marketing services agencies, and financial intermediaries.

What are marketing intermediaries?

In the US and many other countries have many legislation covering issues such as competition, fair trade practices, truth in advertising and many more. But understanding the public policy of a particular marketing activity is not an easy matter. In the US there are many laws, such as state laws, national laws, local laws, and these regulations overlap. For example, aspirin products sold in Dallas are governed by federal labeling laws and Texas state advertising laws.

What are other key changes in the political environments?

The key changes in the political environments is that even the strongest advocates of free - market economics agree on the same page that the system works best with some regulation. This government creates public policy to guide commerce which are sets of laws and regulations that limit businesses for the good of society as a whole.

What are the key changes in the political environments?

The major economic variables that have a huge impact on the marketplace are sound and borrowing patterns, cost of living, income, and interest rates. Companies watch these variables by using economic forecasting.

What are the major economic variables that have a huge impact on the marketplace?

Air and water relay seems to be infinite resources, but some experts see, long run dangers which is the first trend of the natural environment. The second trend is increased pollution as industry will always damage the quality of the environment. Lastly, a third trend is increased government intervention in a natural resource management. The governments of different nations vary their concern and efforts to promote a clean and healthy environment.

What are the major trends in the firms natural environment?

The most important actors in the company's microenvironment are the customers. The aim of the entire value delivery network is to gain target customers and to begin and create strong relationships with them. There are any or five types of customer markets that a company might target.

What are the most important actor's in company's microenvironment?

Marketers have some chances of changing secondary values and beliefs because they are more likely to change but they have no chance of changing a persons core beliefs and values. Also marketers want to take advantage and predict cultural shifts to spot new opportunities and threats. People use products, services and brands as a means of self expression and to purchase the products and services that match their views of themselves.

What beliefs can marketers change when people are trying to purchase a product?

Supply delays or shortages, natural disasters and other events can cost sales in the short run and destroy customer satisfaction in the long run. Sometimes that can harm the company's sale volume is rising supply costs may force increase in prices.

What can cause harm to the company sales?

Marketers must do more than simply transform the needs of target customers. They must also gain strategic advantage by positioning, their offering strongly against their competitor's offerings in the back of minds of the customers. Each firms should ponder is their own size and industry position compared with those of its competitors when trying to make a competitive marketing strategy.

What do marketers need to more of?

Marketing experts warn other marketers need to be careful about turning off one generation, each time they craft a product or message that appeals to others. For example marketers usually split the baby boomers into 3 smaller groups leading edge boomers, care boomers, and trailing edge boomers, which each have their own behaviors and beliefs.

What do marketing experts warn other marketers need to careful about?

This environment is of major interest marketers because it involves citizens and citizens make up markets. Changes in the world demographic environment have major consequences for business. So marketers need to keep a close look on demographic developments and trends in their markets.

What does changes of the demographic environment do for businesses?

Suppliers form a crucial link in the company's overall customer value delivery network. These suppliers provide the resources necessary by the company to produce its goods and services. The marketing managers need to watch supply availability and costs. Lastly, most marketers now treat their suppliers as partners in creating and delivering exceptional customer value.

What does suppliers do during the process of micro-environment?

The marketing environment consists of economic factors that affect consumer buying power and sending patterns. These factors can have a considerable effect on consumer spending and buying habits. For example during the Great Recession during 2008-2009 consumers bought and bought seemingly without stopping, amassing record levels of debt. Now a days customers are buying less and are looking for the best value in things they purchase.

What does the marketing environment consist of?

The United States has been now called a salad bowl in which various groups have blended together but have maintained their diversity by retaining and valuing crucial ethnic and cultural differences. Marketers now face increasingly diverse markets at both home and abroad, as operations become more international in scope.

What has the United States been called about its diversity?

Generation Z is young people who were born after 2000 and this generation spends an estimated $44 billion annually of their own money and influence a total of close to $200 billion of their own and parents spending. This generation is the consumers that will represent tomorrow's markets they are currently forming brand relationships that will affect their buying habits well into the future. This generation has short attention spans so the key for marketers is to engage these young consumers and let them help to define its brand experiences.

What is Generation Z and what are their forces in the marketing environment?

There is a changing family as in the United States, fewer than half of the US households today contain married couples down 76 percent since 1940. 1 in 12 married couples is interracial and the number of same sex couples raising children has gone up 75% since 2000. Marketers need to consider the special needs of non traditional households. So companies are now adapting their marketing to reflect the changing dynamics of American families.

What is changing in the united states that is affecting how marketers market there customers?

Marketing management's objective is to create relationships with customers by building customer satisfaction and value. These marketing managers can't do it by themselves, as to have success in marketing a company requires building relationships with various other company departments, marketing intermediaries, supplies, publics, competitors and customers which blend together to make up the company's value delivery network.

What is marketing management's objective?

The macro-environment contains a larger societal forces that affect the micro-environment, demographic, economic, natural, technological, cultural, and political forces.

What is the macro-environment?

The microenvironment consists of the actors close to the company that affects its ability to serve and engage customers, the company, marketing intermediaries, suppliers, customer markets, competitors and public. Lastly, the microenvironment includes all the people that are close to the company that affects.

What is the micro-environment?

The changing age structure of the population is the single most important demographic trend in the United States, which has to do with longer life expectancy and falling birthrates. This aging of the population will have a important impact on markets and those who serve them.

What is the most important demographic trend in the United States?

The technological environment is perhaps the most dramatic force currently shaping our destiny. Our attitude towards technology depends on whether we are more impressed with its blonder or wonders. Some of the new trends is the new technology called Radio-frequency identification (REID) which are transmitters, is a technology that would provide many advantages to both buyers and sellers. Lastly, the technological environment changes quickly which creates new target markets and opportunities.

What is the technological environment and what are trends that are currently happening?

Generation X was when babies were born between 1965-1976 and this generation prices experience over purchasing and many Gen Xers who are parents come first both children and their career come second. This generation tends to research products thoroughly before they consider buying, prefer quality to quantity and tend to be less receptive to clear marketing pitches.

What was Generation X or Gen X and what are their forces in the marketing environment?

Baby boomers where born between 1946-1964 have been one of the most powerful forces in shaping the marketing environment, which are the wealthiest generation in US history. Today's baby boomers account for about more than 1/4 of the population of the US but control 70 percent of the nation's disposable income and half of all consumer spending.

What was the baby boomer generation and what are their forces in the marketing environment?

Marketers have been moving to micropolitan areas which has resulted in more people who are telecommuting to work. So many marketers are actively courting the lucrative telecommuting market such companies as NextSpace, Grind, and Regus, rent out fully equipped shared office spaces.

With the change of people moving to the micropolitan areas has resulted in an increase in a number of people who telecommute to work at home or in a remote office and conduct business by the internet or phone, so what do marketers do to market these people?

Marketing services agencies

are the marketing research firms, media firms, advertising agencies, and marketing consulting firms that help the company target and promote its goods or products to the best markets.