The Marketing Environment

time orientation

Long: Long-term perspective, future oriented Short: Short-term perspectives, present-oriented

financial publics

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

Micro-environment

•The environment that is made up of close forces that affect the company's ability to serve its consumers. • The company has more control over the micro-environment. -consumers are the most important- need them to generate profit and rev. without them we'd go bankrupt players: the company, suppliers, marketing intermediaries, competitors, publics, customers -center is marketing

The role of marketing

•The role of marketing is to detect such changes in the environment via strategic environmental scan •The marketing department is the "external eye" of a company •The marketing department suggests to the company how to cope with environment changes Control: adapt vs. modify View: threat vs. opportunity (SWOT analysis) -continuously monitor changes in environmental trends -company can only modify what happens internally

trends in the natural environment

- Growing shortages of raw materials - Increased pollution - Increased government intervention - Developing strategies that support environmental sustainability

micro-environment- Competitors

- The company must have competitive advantage over its competitors in providing consumer value (core competencies). - Competitors can also be suppliers competitor of apple is samsung when you outsource to competitors they become partners and competitors Forbes article- the display of iPhone 11 is display of samsung samsung is supplier of iPhone display

macro-environment- The natural environment

- The nature that are affected by or affects corporate activities - Pollution, global warming, natural disasters The natural environment also change - Resource depletion, natural disaster pollution and global warming are affected by corporate activity natural disasters affect corporations like fed ex or UPS- cant deliver in flood resource depletion0 gradual people invest in renewable resources because of resource depletion abrupt change- natural disasters

macro-environment- The technological environment

- The technology that affects corporate activity -Innovation/invention, increasing storage/processing capacity- The technological environment changes dramatically innovation/invention- iphones change from floppy discs to flash drives -tech environment changes most dramatically in macro environment

macro-environment- The cultural environment

-A society's values, perceptions, preferences, and behaviors. -Hofstede's cultural dimensions power distance, individualism, masculinity, uncertainty avoidance, time orientation, indulgence western culture (US)- talks more about individual needs and less about needs of groups eastern culture (east Asia)- more about group needs USA- lower power distance, high individualism, low long term orientation, high indulgence china- high power distance, low individualism, high longterm orientation, low indulgence

macro-environment- The economic environment

-Economic factors that affect consumer's purchasing power and spending patterns o Inflation,recession,interest rates The economic environment constantly change o Stimulus check inflation- having too much currency in the market place -price of goods will go up recession- happens every 10 years -slows economy -reduces purchasing power and spending pattern interest rates- reduces purchasing power and spending patterns because it influences how many loans people can take out -higher interest rates = less people will take out loans and won't make investments and vise versa w low interest rates abrupt change in economy- stimulus check (calculated measure) -designed to stimulate economy and make people spend money

diversity

-Japan population is almost all japan -US has different cultures but maintain their diversity by valuing important cultural differences -62% white, 17% hispanic, 13% black, 5% asian -13% of people in US were born in another country -by 2060, 28% of population will be hispanic, 14% black, 9% asian -most large companies (P&G, Walmart, Allstate) target specially designed products and ads to one or more of these groups ex. southwest outreach to asians includes being the sponsor for Chinese new year festival in SF -many companies target gay consumers allstate- "everyone deserves to be in good hands" -Wells Fargo- one of the first banks to feature an LGBT couple on a national ad -53 million adults w disability - $200-500 billion in buying power (travel Is a big part) mcdonalds, Verizon have featured disabled people in their ads -LGBT community has $884 billion in buying power

macro-environment- The political / social environment

-Laws, government agencies, and pressure groups -Anti-trust laws, Federal Trade Commission The political / social environment changes according to demands. forces in the macro environment that will influence what a company can do in the 80s, people didn't think about corporate social responsibilities- only thought about making money -this is why nike was able to keep a sweatshop in Southeast Asia CSR influenced nike to stop sweatshops and other companies to be environmentally friendly

macro-environment -The demographic forces

-Population characteristic so Age, education, gender, race, income -The demographic environment change gradually More older vs. younger people More female workforce than before More ethnic and racial diversity compared to after WW2, we have more elderly people -mean age is now older than 1945 -marketing dept has to keep an eye on these changing trends

peoples views of nature

-a long term Trend has been peoples growing mastery over through technology and the belief that nature is bountiful recently however, people have recognized that nature is finite and fragile; it can be destroyed by human activities -the renewed love of natural things has created a sizable market of consumers who seek out natural, organic products ex. annies - sustainable and organic food and production

Shifts in secondary Cultural Views

-cultural swings take place -consider the impact of popular music groups, movie personalities -marketers want to predict cultural shifts to spot new opportunities or threats -people vary in the emphasis on serving themselves vs serving others some seek personal pleasure and some seek self-realization through religion, recreation. marketers can position brands to appeal to specific self-view segments ex. sperrys positioned itself for active millennials that are adventurous and bold

increased government intervention

-germany vigorously pursues environmental quality -poorer nations do little about pollution EPA enforces pollution standards -marketers should help develop solutions to the materials and energy problems facing the world

responding to the marketing environment

-many companies view the marketing environment as an uncontrollable element to which they must react and adapt - do not try to change it -others take a proactive stance toward marketing environment. they develop strategies to change the environment they often create and shape new industries (ford model T car) they take aggressive actions to affect the publics and forces in their marketing environment. they take to social media and run blogs to shape public opinion -by taking action, companies have overcome seemingly uncontrollable situations ex. mcdonalds responded to mechanically modified chicken -smart marketing managers take a proactive rather than reactive approach to marketing environment

peoples views of the universe

-most Americans practice religion but religious conviction and practice have been dropping off gradually through the years -this doesn't mean they are abandoning their faith. people are becoming more spiritual -this changing spiritualism affects consumers in everything from the television shows they watch and the books they read to the products they buy

peoples views of organizations

-people are willing to work for major organizations and expect them to carry out society work -the past two decades have seen a sharp decrease in confidence and loyalty in americas business and political organizations -many people today see work not as a source of satisfaction but as a required chore to earn money to enjoy their nonword hours. -this trend suggests organizations need to find new ways to win consumer and employee confidence

peoples views of society

-peoples orientation to their society influences their consumption patterns and attitudes toward the marketplace -american patriotism has been increasing gradually for the last 2 decades brands highly associated with patriotism- jeep coca-cola, Disney -such marketing efforts are usually well received but some times not flag waving can be viewed as corny or as token attempts to cash in on the nations emotions ex. apples "made in america" hasn't seen much impact

broad forces affecting macroenvironment

-some are unforeseeable and uncontrollable -others can be predicted and handled through skillful management companies that understand and adapt well to their environments can thrive those that done can face difficult times

business legislation

-to protect companies from each other. there are laws to define and prevent unfair competition -to protect consumers from unfair business practices (so they dont make shoddy products, invade consumers,er privacy) -to protect the interests of society against unrestrained business behavior.

peoples views of others

-todays digital technologies seem to have launched an era of "mass mingling". people are using social media to communicate they're likely to meet up w followers in the real world -often they are "alone together" intensely connected to phones -brands often participate in the networks that consumers use to learn about and buy products and shape brand experiences

socially responsible behavior

Actively seek out ways to protect the long-run interests of consumers and the environment -many industrial and professional trade associations have suggested codes of ethics and more companies are developing policies on social responsibility issues -much of online info about customers is systematically developed by businesses seeking to learn more about their customers- invading privacy

uncertainty avoidance

High: Preference for more structure and clear rules Low: Preference for less structure and vague rules

power distance

High: Preference for power hierarchy and accept inequality Low: Preference for power egalitarianism and endorse equality

indulgence

High: Society allows gratification of basic needs (e.g., YOLO) Low: Society controls and regulates basic needs

masculinity

High: Strong gender role differentiation Low: Weak gender role differentiation

individualism

High: The needs and goals of the individual are prioritized Low: The needs and goals of the group are prioritized

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.

media publics

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

local publics

This group includes neighborhood residents and community organizations. large companies usually work to become responsible members of the local communities in which they operate -natwest maintains a line w local communities through various cause-related activities. the organization gave 2.5 million euros to local charities, community groups and social enterprises in europe

internal publics

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 goof about the companies they work for, this positive attitude spills over to the external publics

education

US is becoming better educated -88% of people over 35 has completed high school and 32% have a bachelors degree, up from 1960 -growth rate for professional workers is strong while its weak for manufacturing workers -the rising number of educated professionals will affect what and how people buy

general public

a company needs to be concerned about the general public's attitude toward its products and activities. this publics image of the company affects its buying behavior

citizen-action publics

a company's marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and others

public

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

cultural environment

consists of institutions and other forces that affect a society's basic values, perceptions, and behaviors -people grow up in a certain society that shapes their basic beliefs and values

types of markets

consumer markets- consist of individuals and 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

consumer complaints

consumers take their company complaints to social media dns share brand experiences w each other ex. someone received a damaged computer from Fedex and they posted security camera footage with the delivery worker throwing the package on youtube and it for 5 million views in 5 days -companies should not try to retaliate w the complainers -many companies hire teams to monitor online conversations about their company

environmental sustainability

developing strategies and practices that create a world economy that the planet can support indefinitely -meeting present needs without compromising the ability of future generations to meet their needs -many companies are making more environmentally responsible products ex. nike is an advocate for sustainability. tries to reduce environmental impact through its value chain. uses factory scrap and turns it into shoes -many companies are making sustainability part of their mission knorr is using sustainable options in food production

economic environment

economic factors that affect consumer purchasing power and spending patterns -economic factors can have a dramatic effect on consumer spending and buying behavior ex. a boom in the stock market and income growth can bring increases in housing values -consumers have now adopted a back to basics sensibility in their lifestyles and spending patterns -value marketing has become the watchword for many marketers- advertising value instead of price "expect more pay less"

cause-related marketing

ex. "tide loads of hope" provides mobile laundromats and loads of clean laundry to families in disaster stricken areas -mission of this is to make the world a better place -has become a primary form of corporate giving -links purchases of the companys products or services with benefiting worthwhile causes or charitable organizations -has stirred some controversy. critics worry that it is more a strategy for selling for giving

persistence of cultural values

ex. most Americans believe in individual freedom, hard work, getting married these beliefs shape more specific attitudes and behaviors found in everyday life core beliefs and values passed on from parents are reinforced by schools, business, religious institutions -secondary beliefs 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 marketers have some chance of changing secondary values ex. family planning marketers could argue more effectively that people should get married later than not at all

marketing intermediaries

firms that help the company to promote, sell, and distribute its goods to final buyers; includes: -resellers- distribution channel firms that help the company find customers or make sales to them. includes wholesalers and retailers -physical distribution firms- help the company stock and move goods from their points of origin to their destinations -marketing services and agencies- 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, etc that help finance transactions or insure against the risks associated with the buying and selling of goods

Philips analysis of market needs

first objective- select the most attractive markets in the region. they developed a statistical model that displays a correlation between a country demand for lighting and GDP per capita. in order to find the most attractive markets, Philips used the model and combined it with market data of the Middle East that contained population, GNP growth, and GNP per capita. the model was used as a starting point for discussions with agents and distributors in the respective countries. -today, the lighting market is impacted by multiple factors: the macroeconomic situation which is influenced and shaped by inflation rate and GDP, country specific efficiency regulations and an increase in energy awareness, and government action limiting certain energy

technological environment

forces that create new technologies, creating new product and market opportunities -most dramatic force shaping us -many firms are already Ising technology to track products and customers at various points in the distribution channel ex. Walmart has encourages suppliers shipping products to its distribution centers to apply tags to their pallets disney is using the magic band bracelets -new technology replaces old technology (streaming replaces books and DVDs) -FDA makes sure products are safe creating higher research costs and longer times between new product ideas

competitors

gain strategic advantage by positioning their offerings strongly against competitors offerings in the minds of consumers

the changing american family

in the US, fewer than half of todays house holds contain married, down from 76 percent In 1940. -married couples w children under 19 represent only 19 % of the nations households -married couples without children represent 23% and single parents are 14% -34% are non family households -15% of all new marriages are interracial or interethnic and 7.3% of same sex couples are raising children -marketers must consider the special needs of non traditional house holds -number of working women has increased from 38% in 1970 to 47% today. american women make up 40% of primary family breadwinners with children under 18 -60 percent of married couples w children are dual income and more men stay home w their children while their wives work ex. fathers were once ignored and portrayed as dolts in family oriented ads, todays ads are showing more caring and capable dads. like samsung galaxy a dad is carrying his child while the mom is nervous checking in -ads reflect evolving diversity in modern house holds like camels features a same sex couple feeding their child -many families are working from home and companies are advertising products more equipped for home office spaces and telecommuters

political environment

laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society -regulation can encourage competition and ensure fair markers -govs develop public policies to guide commerce- set of laws and regulations that limit business for the good of society as a whole -in the US there are many laws created at the national, state, and local levels and they often overlap ex. aspirin products sped in da;;as are governed by both federal labeling laws and texas state advertising laws -regulations are constantly changing

segments

marketers must form age specific segments within each are group

income distribution

marketers need to pay attention to income distribution as well as income values -rich are getting richer, middle class is shrinking, poor remain poor -top 5% has 22% of companies gross income and bottom 40% have 11% of total income -companies target different economic groups but some target many at once. ex- ford has cheap and luxury cars

generation Z

people born after 2000 (although many analysts include people born after 1995) who make up the kids, tweens and teens markets -82 million -spend estimated $44 billion of their own money and influence up to $600 billion of family spending -represent tomorrows markets -fluency with digital technologies more than half of gen z teens and tweens do product research before buying a product and more than half of those who shop online prefer shopping online in categories (electronics, nooks, music) -many companies have aimed at gen z, like creating special lines or entire stores appealing to gen z buyers and their aprents- Abercrombie kids, gap kids, justice chain targets only tween girls -marketing presents challenges. traditional media are still important to this group (magazines) also tc challenge. nut markets know they must meet gen z people where they hang out and shop increasingly thats in online and mobile worlds -hard to pin down. key is to engage with them and let them define their own brand experiences -important concern includes children privacy ad their vulnerability to ad pitches. marketers must do so responsibly

pros and cons to outsourcing

pros- fixed costs are less. the company you're buying from has the fixed costs (hiring, machinery) cons- dont have control over production scheme -if your demand is high and you need to product more, the company can tell you no they cant product more (cant generate more rev this way) outsourcing companies have voice -if you're producing smart phones and your partnering company thats outsourcing says they cant produce anymore0 then your product won't hit the market -consumers won't wait for you- they will switch to a competitor if your product isn't on the market fast enough

pros and cons to insourcing

pros- you have more control because you're producing within your company you can easily make more/less- overall more flexibility in production scheme cons- highly costly (because you need to buy the machines to make the materials) also you have to hire people (all in labor unions) -burdened w fixed costs

suppliers

provide resources needed by the company to produce its goods and services -supply shortages or delays, natural disasters can cost sales in the short run and damage customer satisfaction in the long run -morrisons could not have achieved success without good relations with suppliers (farmers)

today's marketers

recognize the importance of working with their intermediaries as partners rare than channels which they sell their products -apple uses resellers who help them sell products all over the world. the products are sold at identical prices in stores and at resellers. these intermediaries can be either authorized service providers or limited service providers. the partners benefit from inclusion in the apple resource locator system, where they are displayed on apples website for customers looking for nearby service providers

major US legislation affecting marketing

sherman antitrust act- prohibits monopolies federal food and drug act- created FDA. prohibits sale of fraudulently labeled food and drugs Clayton act- prohibits certain types of price discrimination, exclusive dealing, and tying clauses

generation X

the 49 million people born between 1965 and 1976 in the "birth dearth" following the baby boom -less materialistic than the other groups- they prize experience - they are skeptical. sensible shoppers who research products heavily before they consider a purchase. prefer quality to quantity and tent to be less receptive to overt marketing pitches. more receptive to irreverent ad pitches that make fun of convention and tradition -embraces the benefits of new technology -most educated generation to date and possess hefty purchasing power -pull 29% of the US total income -82% of them own homes, making them an important segment for home marketers. home improvement retailer Lowes markets heavily to gen x homeowners "never stop improving" myLowes app is a home improvement concierge that lets customers build room ny room profiles of their home

baby boomers

the 78 million people born during the years following WW2 and lasting until 1964 -they are the wealthiest generation in US history -account for 26% of the US population but control an estimated 70% of the nations disposable income and half of all consumer spending -constitute a lucrative marketi= for financial services, new housing and home remodeling, new cars, travel and entertainment -changing and trying new brands helps boomers feel like they're staying current -more active boomers have no intention of abandoning their youthful lifestyles as they age ex. adults over 50 now account for 80% of luxury travel spending in america -they are the fastest growing social media users -like marketers that appeal to their youthful thinking rather than their advancing age ex. Walgreens launched "carpe med diem"- features an active stylish boomer woman w purse highlights

Millennials (Generation Y)

the 83 million children of the baby boomers born between 1977 and 2000 -the most financial strapped generation. facing higher unemployment and more debt, many have little money. they still make up a huge and attractive market, both now and in the future -comfortable with digital technology -frugal, practical, connected, impatient. seek authenticity and opportunities to shape their own brand experiences ex. financial services firms are shedding their stodgy images to make their brands more appealing to millennial consumers fifth third bank launched "no waiting" mobile app for quicker banking. includes digital video and social media content. features an animated game that tests a users texting speed

marketing environment definition

the actors and forces outside marketing that affect marketing managements ability to build and maintain successful relationships with target customers -marketers have disciplined methods- marketing research and marketing intelligence, for collecting information and developing insights about the marketing environment -also study the environment, marketers can adapt their strategies to meet new marketplace challenges and opportunities

microenvironment

the actors close to the company that affect its ability to serve its customers - the company, suppliers, marketing intermediaries, customer markets, competitors, and publics

macroenvironment

the larger societal forces that affect the microenvironment - demographic, economic, natural, technological, political, and cultural forces -all the players (company, suppliers, etc) form the internal environment

natural environment

the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities ex. snowy weather increased sales in snow blowers, winter clothing, auto repair centers -companies must prepare for natural occurrences (Fedex and UPS have meteorologists on their staff to anticipate weather conditions that can affect on time deliveries) -marketers need to be aware of trends in the natural environment ex. shortages of raw materials and increased pollution (air and water pollution, use of renewable-forests and food- and non renewable resources- oil, coal)

demography

the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics -important demographic in US is changing age structure of the population. because of falling birthrates and longer life expectancies, the US population is rapidly getting older

Forces in the micro-environment

• The company- The branches must work together • Suppliers - In-sourcing vs. out-sourcing - The company must partner with its suppliers to provide value to its consumers timely. branches- marketing, HR even if your product is very good, if you cant cooperate w branches, the product wont happen (if HR cant hire people to make your product it won't happen) insourcing- company can product materials necessary for processing in-house outsourcing- other companies product materials for your product

marketing environment

• The environment in which the company operates in. • Characteristics - Constraining: limits what a company can do ex. your company is in Hawaii, delivery method to mainland is restrained (airmail or ship mail) - Multi levels: micro- and macro-environment - Different forces within each environment level

Macro-environment

• The environment that is made up of interconnected social forces that affect the microenvironment itself. • The company has less control over the macro-environment. center is company players are demographic, economic, natural, technological, political, cultural -larger scheme of things that affect your competitor, your company, your marketing dept and the customers -companies have less control over these