Download - MKT1303 ch3

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CHAPTER THREEAnalyzing the Marketing Environment

Lecturer: Ghazanfar Malik

Ch 1 -1 Copyright © 2011 Pearson Education

Presentation prepared by Annelie Moukaddem Baalbaki

Principles of Marketing, Arab World Edition

Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed Tolba

Copyright © 2011 Pearson EducationCh 3 - 1

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Chapter Learning OutcomesTopic Outline

3.1 The Company’s Microenvironment

3.2 The Company’s Macroenvironment

3.3 Demographic Environment

3.4 Economic Environment

3.5 Natural Environment

3.6 Technological Environment

3.7 Political and Social Environment

3.8 Cultural Environment

3.9 Responding to the Marketing Environment

Ch 3 - 2 Copyright © 2011 Pearson Education

The Marketing Environment

The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers.


The Company’s Microenvironment

A microenvironment consists of the actors close to the company that affect its ability to serve its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics.



• Top management

• Finance

• R&D

• Purchasing

• Operations

• Accounting

The Company



• Provide the resources to produce goods and services

• Treated as partners to provide customer value

Suppliers



Marketing Intermediaries help the company to promote, sell and distribute its products.

Marketing Intermediaries



Firms must gain strategic advantage by positioning their offerings against competitors’ offerings.

Competitors


http://www.bizrate.com/


Publics are any groups that have an actual or potential interest in or impact on an organization’s ability to achieve its objectives. They include:

• Financial publics

• Media publics

• Government publics

• Citizen-action publics

• Local publics

• The general public

• Internal publics


The Company’s Macroenvironment


Demographic Environment

Demography is the study of human populations in terms of

size, density, location, age, gender, race, occupation, and

other statistics.

• The demographic environment is important because it

involves people, and people make up markets.

• Demographic trends include age, family structure,

geographic population shifts, educational characteristics, and

population diversity.

Demography



• Baby boomers include people born between 1946 and 1964

• This generation accounts for about 30% of the Arab population

• Baby boomers “think young” and spend large amounts of money on different products and services

• Baby boomers are retiring later and working more after retirement

Changing Age Structure of the Population



Generation X includes people born between 1965 and 1976. This generation tends to display the following traits:

• Skepticism

• Cautious economic outlook

• Less materialistic

• Family comes first

• Research products before considering a purchase

Generation X



Millennials (Generation Y or Echo Boomers) include those born between 1977 and 2000:

• Comfortable with technology

• Includes– Tweens (ages 8–12)– Teens (13–19)– Young adults (20’s)

Millennials



Generational marketing is important in segmenting people by lifestyle, life stage and common values, rather than by age.

Generational marketing



• Gender and age are often the basis for defining roles and responsibilities.

• Women are working more outside the house.

• Inherited values and traditions are taught to the next generation.

• Mothers are more involved in family decision making.

The Changing Arab Family



• Expatriates are coming to the Arab world lured by high income and a high standard of living.

• The nationals of most Gulf countries are now a minority population within their own countries.

Geographic Shifts in Population



• Since the global recession, unemployment rates have been rising across the Arab world

• Governments are reassessing their education policies and training programs

Education and Employment


Demographic EnvironmentIncreased Diversity

Markets are becoming more diverse• International

• National

Includes:• Ethnicity

• Language


Economic Environment

The economic environment consists of factors that affect consumer purchasing power and spending patterns.

• Industrial economies are richer markets.

• Subsistence economies consume most of their own agriculture and industrial output.




• Value marketing involves ways to offer financially cautious buyers greater value—the right combination of quality and service at a fair price.

Changes in Income



Ernst Engel—Engel’s Law

As income rises:

• the percentage spent on food declines

• the percentage spent on housing remains constant

• the percentage spent on savings increases.

Changes in Consumer Spending Patterns


Natural Environment

The natural environment involves the natural resources that are needed as inputs by marketers, or that are affected by marketing activities.

Trends

• Shortages of raw materials

• Increased pollution

• Increase government intervention

• Environmentally sustainable strategies

Natural Environment


http://www.masdar.ae/en/home/index.aspx

Technological Environment

The technological environment is the most dramatic force in changing the marketplace.

• It creates new products and opportunities.

• Safety of new product always a concern.


Political Environment

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




• Increased legislation

• Changing government agency enforcement

Legislation Regulating Business



• Socially responsible behavior

• Cause-related marketing

Increased Emphasis on Ethics and Socially Responsible Actions


Cultural Environment

The cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors.




Core beliefs and values are persistent and are passed on from parents to children and are reinforced by schools, mosques, businesses, and governments.

Secondary beliefs and values are more open to change and include people’s views of themselves, others, organizations, society, nature, and the universe.

Persistence of Cultural Values



• People’s view of themselves

• People’s view of others

• People’s view of organizations

• People’s view of society

• People’s view of nature

• People’s view of the universe

Shifts in Secondary Cultural Values


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