Marketing Environment Quiz

Analyzing the Marketing Environment

• Marketing environments influence a company's ability to serve customers.
• The macroenvironment encompasses broad factors affecting all businesses.
• The microenvironment represents factors close to the company that influence its ability to serve its customers.

Demographic Environment

• Demographics is the study of human populations.

• Key demographic trends include:

  • Changing age and family structures
  • Geographic population shifts
  • Educational characteristics
  • Population diversity

• Generational Cohorts:

  • Baby Boomers (born 1946-1964)
  • Generation X (born 1965-1976)
  • Millennials (born 1977-2000)
  • Generation Z (born after 2000)

• Changing American family includes more single-parent households, dual-income families, and same-sex married couples.

• Changes in the workforce include more women, fewer men, and aging populations.

• Markets are becoming more diverse:

  • International and national diversity
  • Ethnicity, gay and lesbian communities, and disabled individuals

• Geographic shifts in population include:

  • Growth in the U.S. West and South
  • Decline in the Midwest and Northeast
  • Telecommuting and home office advancements

Economic Environment

• The economic environment affects consumer spending patterns and purchasing power.
• Industrial economies have higher purchasing power.
• Developing economies offer lucrative market opportunities.
• Subsistence economies consume most of their own agricultural and industrial output.
• Changes in Consumer Spending: Value marketing offers quality and service at a fair price to financially cautious buyers.
• Income Distribution: Income inequality has increased, with the wealthy growing richer and the middle class shrinking.

Natural Environment

• The natural environment includes:
  • Physical environment: Land, air, water, and natural resources
  • Natural resources: Needed as inputs for production
• Trends in the Natural Environment:
  • Shrinking raw material reserves
  • Increased pollution
  • Government intervention to protect the environment
• Environmental sustainability: Developing practices that create a sustainable world economy.

Technological Environment

• The technological environment is a powerful force driving marketplace changes.
• It offers opportunities for:
  • New product development
  • Efficiency improvements
• Concerns:
  • Safety of new products
  • Data privacy and security

Political and Social Environment

• Legislation regulating business aim to protect:
  • Companies from each other
  • Consumers from unfair practices
  • Society from unrestrained business behavior
• Increased emphasis on ethics and socially responsible behavior
• Cause-related marketing aligns a company with a cause to benefit both stakeholders.

Cultural Environment

• The cultural environment encompasses values, perceptions, and behaviors shaping a society.
• It influences consumer preferences, buying habits, and overall consumption patterns.
• Cultural shifts impact market trends and product appeal.

The Microenvironment

• Marketers need to consider other company groups when developing marketing plans.
• Suppliers provide the resources for goods and services. Treat suppliers as partners to provide more customer value.
• Marketing intermediaries help promote, sell, and distribute products to final buyers.
  • Resellers are retailers and wholesalers who purchase products to sell to others.
  • Physical distribution firms help companies store and transport products.
  • Marketing services agencies conduct market research, advertising, and other marketing services.
  • Financial intermediaries are banks, insurance companies, and other firms that help finance transactions or ensure against risks.
• Competitors are firms that offer similar products or services. Gain a strategic advantage by positioning your offerings against competitors.
• Publics are any groups that have an interest in or impact on an organization's objectives. These include financial publics, media publics, government publics, citizen-action publics, local publics, the general public, and internal publics.
• There are several markets that companies must consider: consumer markets, business markets, reseller markets, government markets, and international markets.

Analyzing the Marketing Environment

• The macroenvironment consists of broader forces that affect the company's microenvironment.
• Demographic environment studies human populations—size, density, location, age, gender, race, occupation, and other statistics.
  • Generational marketing focuses on segmenting people by lifestyle or life stage, rather than age.
  • Generation X (born between 1965 and 1976) is a generation known for its cynicism and desire for work-life balance.
  • Millennials (born between 1977 and 2000) are tech-savvy and value experiences over material possessions.
  • Generation Z (born after 2000) is the most diverse generation and is known for being digital natives.
  • Changing American family structure (single-parent households, dual-income households, etc.) impacts consumer behavior.
  • Changes in the workforce (increasing diversity, more women working, etc.) influence marketing strategies.
  • Geographic shifts in population, such as growth in the U.S. West and South, affect regional marketing strategies.
• Economic environment consists of factors that affect consumer purchasing power and spending patterns.
  • Industrial economies are richer markets with a higher per capita income.
  • Subsistence economies are less developed economies where most people consume their own agricultural and industrial output.
• Changes in consumer spending are influenced by economic factors, like inflation and interest rates.
  • Value marketing focuses on offering products that provide a balance of quality and service at a fair price.
• Income distribution refers to the gap between the rich and the poor. Understanding income distribution is crucial for targeting specific market segments.
• Natural environment refers to physical environment and natural resources.
  • Environmental sustainability is an important consideration for companies to develop long-term strategies.
  • Shortages in raw materials, increased pollution, and government intervention influence business practices.
• Technological environment is the most rapidly changing force in the marketing environment.
  • Concerns about the safety of new technologies are important for companies to address.
• Political and social environment consists of laws, government agencies, and pressure groups that influence or limit organizations.
  • Companies must comply with regulations to protect consumers and society from unfair business practices.
• Cultural environment consists of institutions and forces that shape a society's values, perceptions, and behaviors.
  • Core beliefs and values are persistent and passed down through generations.
  • Secondary beliefs and values are more open to change and include people's views of themselves, others, organizations, etc.

Responding to the Marketing Environment

• Companies can react to the marketing environment in three ways:
  • Uncontrollable - Accepting the environmental forces and adapting to them.
  • Proactive - Taking aggressive steps to influence environmental forces.
  • Reactive - Watching and reacting to environmental forces.