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Questions and Answers
What are the two main categories of factors that affect a company's ability to serve its customers?
What are the two main categories of factors that affect a company's ability to serve its customers?
The microenvironment and the macroenvironment.
What are the five forces included in the macroenvironment?
What are the five forces included in the macroenvironment?
What is the difference between the microenvironment and the macroenvironment?
What is the difference between the microenvironment and the macroenvironment?
The microenvironment consists of the actors close to the company that affect its ability to serve its customers. The macroenvironment consists of the larger societal forces that affect the microenvironment.
Which of the following is NOT a factor in the microenvironment?
Which of the following is NOT a factor in the microenvironment?
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Why is it important for companies to understand the demographic environment?
Why is it important for companies to understand the demographic environment?
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What is the key idea behind value marketing?
What is the key idea behind value marketing?
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Which of the following is an example of a cultural trend that can affect a company's marketing strategies?
Which of the following is an example of a cultural trend that can affect a company's marketing strategies?
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The natural environment is only relevant to companies involved in the extraction or manufacturing of raw materials.
The natural environment is only relevant to companies involved in the extraction or manufacturing of raw materials.
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What is a key challenge related to the technological environment?
What is a key challenge related to the technological environment?
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What is the purpose of legislation regulating business?
What is the purpose of legislation regulating business?
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What is cause-related marketing?
What is cause-related marketing?
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Study Notes
Chapter 3: Analyzing the Marketing Environment
- The marketing environment encompasses external actors and forces impacting a company's ability to build and maintain relationships with target customers.
- Objective 1: Describe the environmental forces affecting a company's ability to serve customers.
- Objective 2: Explain how demographic and economic changes impact marketing decisions.
- Objective 3: Identify major trends within a firm's natural and technological environments.
- Objective 4: Explain key changes in political and cultural environments.
- Objective 5: Discuss how companies react to the marketing environment.
Learning Objectives
- Objective 1: Describe the environmental forces affecting a company's ability to serve its customers.
- Objective 2: Explain how changes in demographic and economic environments impact marketing decisions.
- Objective 3: Identify major trends in a firm's natural and technological environments.
- Objective 4: Explain key changes in the political and cultural environments.
- Objective 5: Discuss how companies react to the marketing environment.
Learning Objective 1
- Describe environmental forces impacting a company's ability to serve customers.
- The Microenvironment and Macroenvironment.
A Company's Marketing Environment
- The marketing environment involves actors and forces outside the marketing team that affect a company’s capacity for building and maintaining strong relationships with target clients.
- Macroenvironment: Larger societal forces that influence the microenvironment.
- Microenvironment: Close-knit actors affecting a company's ability to serve customers. These components are: the company itself, suppliers, marketing intermediaries, customer markets, competitors, and publics.
The Microenvironment
- The Company: Top management, finance, research and development (R&D), purchasing, operations, and accounting need to be considered in the strategic planning phase.
- Suppliers: Provide the resources necessary for goods & services production. A crucial partnership in providing customer value.
- Marketing Intermediaries: Support a company's promotion, sale, and distribution; these comprise resellers, physical distribution firms, marketing service agencies, and financial intermediaries.
- Customers: Include consumer markets, business markets, reseller markets, government markets, and international markets.
- Competitors: Firms should leverage strategic positioning and differentiation to strengthen their offerings and stand out in the minds of buyers.
- Publics: Any group with an interest or impact on a company's ability to achieve its objectives. These include financial publics, media publics, government publics, citizens, local publics, the general public and internal publics.
The Macroenvironment
- The larger societal forces shaping the microenvironment are known as the macroenvironment. These include demographic, economic, natural, technological, political, and cultural forces.
Demographic Environment
- Demography: Study of human populations—size, density, location, age, gender, race, occupation, and other characteristics.
- Demographic environment impacts markets; people define markets.
- Demographic trends: Include evolving age and family structures, shifts in geographic population distribution, educational characteristics, and population diversity. Generational marketing is pertinent.
- Examples: Baby Boomers (1946-1964), Generation X (1965-1976), Millennials (1977-2000), Generation Z (after 2000).
- Changing American family, workforce changes. Markets become diverse, nationally, and internationally.
- Geographic shifts: Population growth in US South and West, decline in Midwest and Northeast.
- Diversity includes ethnicity, race, gender, sexual orientation, and ability.
Economic Environment
- Economic environment includes factors affecting consumer buying power and spending patterns.
- Markets range from affluent developed economies to subsistence economies, to developing markets which present unique opportunities.
- Changes in consumer spending necessitate value marketing to offer the optimal balance of quality, service, and cost for financially prudent consumers.
- Income distribution: Rich get richer, middle class shrinks, and the poor remain poor.
Natural Environment
- The natural environment encompasses the physical environment and resources that are inputs for marketers and resources.
- Trends: Growing shortages of raw materials, pollution, increased government intervention, developing strategies that promote environmental sustainability.
Technological Environment
- Highly impactful on markets; often a dynamic force leading to dramatic impacts on the marketplace.
- Trends: New product development, new market opportunities, concerns surrounding the safety of new products.
Political and Social Environment
- Legislation aimed at protecting businesses from unfair practices and ensuring ethical business practices safeguarding consumers and societal interests against unchecked business behavior.
- Trends: Increased emphasis on ethics, socially responsible behavior, cause-related marketing.
Cultural Environment
- Consists of institutions and forces that impact societal beliefs, values, perceptions, and behaviors.
- Trends: Persistence of core beliefs and values passed down through families and reinforced by institutions, secondary beliefs and values that are more susceptible to change and include views about the self, others, organizations, society, nature, and the universe.
Responding to the Marketing Environment
- Uncontrollable forces require companies to react and adapt.
- Proactive approach involves companies taking aggressive action to influence environmental forces.
- Reactive approach focuses on watching and responding to environmental demands.
Porter's Five Forces Model
- Analyses competitiveness in an industry through five forces: potential new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products, and rivalry among existing competitors.
PESTEL Analysis
- PESTEL analysis offers a framework to examine broader macroenvironmental aspects influencing a company including Political, Economic, Social, Technological, Environmental, and Legal factors.
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Description
This quiz focuses on Chapter 3 of marketing, which analyzes the various external factors that influence a company's relationships with its customers. You will explore demographic, economic, technological, and political forces, as well as how companies adapt to these changes in the marketing landscape.
