Principles of Marketing

Eighteenth Edition

Chapter 3

Analyzing the Marketing

Environment

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Learning Objectives
3.1 Describe the environmental forces that affect the
company’s ability to serve its customers.
3.2 Explain how changes in the demographic and economic
environments affect marketing decisions.
3.3 Identify the major trends in the firm’s natural and
technological environments.
3.4 Explain the key changes in the political and cultural
environments.
3.5 Discuss how companies can react to the marketing
environment.

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MICROSOFT: Adapting to the Fast-
Changing Marketing Environment
“Microsoft has undergone a
dramatic transformation to better
align itself with the new digital
world. More than just making the
software that makes PC s run,
Microsoft now wants to empower
every person and every
organization on the planet to
achieve more, regardless of what
device or operating system they
use.”

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A Company’s 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 target
customers.

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Learning Objective 1
Describe the environmental forces that affect the company’s
ability to serve its customers.

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The Microenvironment and
Macroenvironment (1 of 2)
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.

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The Microenvironment and
Macroenvironment (2 of 2)
Macroenvironment consists of the larger societal forces
that affect the microenvironment—demographic, economic,
natural, technological, political, and cultural forces.

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The Microenvironment (1 of 8)
Figure 3.1 Actors in the Microenvironment

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The Microenvironment (2 of 8)
The Company

In designing marketing plans, marketing management takes

other company groups into account.
• Top management
• Finance
• Research and development (R&D)
• Information technology
• Purchasing
• Operations
• Human resources
• Accounting

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The Microenvironment (3 of 8)
Suppliers

• Provide the resources to produce goods and services

• Treat as partners to provide customer value

Suppliers: Giant furniture

retailer IKE A doesn’t just buy
from its suppliers. It involves
them deeply in the process of
delivering the trendy but simple
and affordable home furnishings
to create a better everyday life
for its customers.

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The Microenvironment (4 of 8)
Marketing Intermediaries Partnering with intermediaries:
Coca-Cola provides its retail
Marketing intermediaries are partners with much more than just
firms that help the company to soft drinks. It also pledges powerful
promote, sell, and distribute its marketing support.
goods to final buyers.

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The Microenvironment (5 of 8)
Marketing Intermediaries
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries

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The Microenvironment (6 of 8)
Competitors

Firms must gain strategic advantage by positioning their

offerings strongly against competitors’ offerings in the minds
of consumers.

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The Microenvironment (7 of 8)
Publics Publics: P&G has a long history of
giving back to its local publics. The
Any group that has an actual or
Tide Loads of Hope program brings
potential interest in or impact on an
“hope not just soap” in the form of
organization’s ability to achieve its
free mobile laundry services to
objectives
people in communities facing
• Financial publics natural disasters.
• Media publics
• Government publics
• Citizen-action publics
• Local publics
• General public
• Internal publics

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The Microenvironment (8 of 8)
Customers
• Consumer markets
• Business markets
• Reseller markets
• Government markets
• International markets

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The Macroenvironment
Figure 3.2 Major Forces in the Company’s
Macroenvironment

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Learning Objective 2
Explain how changes in the demographic and economic
environments affect marketing decisions.

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The Demographic and Economic
Environments (1 of 6)
The Demographic Environment
• Demography is the study of human populations—size,
density, location, age, gender, race, occupation, and other
statistics.
• Demographic environment involves people, and people
make up markets.
• Demographic trends include changing age and family
structures, geographic population shifts, educational
characteristics, and population diversity.

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The Demographic and Economic
Environments (2 of 6)
The Demographic Environment
• Baby Boomers – born 1946 to 1964
• Generation X – born between 1965 and 1980
• Millennials – born between 1981 and 1996
• Generation Z – born between 1997 and 2012
• Generation Alpha – born after 2012

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The Demographic and Economic
Environments (3 of 6)
The Demographic Environment
Generational marketing is important in segmenting people by
lifestyle or life stage instead of age.

Generational marketing:
Baby boomers and
millennials are now
moving over to make
room for younger
Generation Alpha.

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The Demographic and Economic
Environments (4 of 6)
The Demographic Environment

• The changing American family Working remotely: Apps like Slack let
• Geographic shifts in population people working remotely collaborate
anywhere and everywhere through the
• A better-educated, more white-collar, internet and mobile devices.
more professional population
• Increasing diversity

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The Demographic and Economic
Environments (5 of 6)
The Demographic Environment

Targeting consumers with

disabilities: Toyota’s “Start
Your Impossible” campaign
included ads highlighting
inspirational real-life stories of
athletes who overcame
mobility challenges, such
Paralympic gold medalist
alpine skier Lauren
Woolstencroft.

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The Demographic and Economic
Environments (6 of 6)
The Economic Environment
Economic environment: Consumers adopted a new back-to-basics
sensibility in their lifestyles and spending patterns. To serve the
tastes of these more financially frugal buyers, companies like
Target are emphasizing the “pay less” side of their value
propositions.

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Learning Objective 3
Identify the major trends in the firm’s natural and
technological environments.

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The Natural and Technological
Environments (1 of 4)
The Natural Environment
The natural environment is the physical environment and
the natural resources that are needed as inputs by
marketers or that are affected by marketing activities.

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The Natural and Technological
Environments (2 of 4)
The Natural Environment
Trends in the Natural Environment
• Growing shortages of raw materials
• Increased pollution
• Increased government intervention
• Developing strategies that support environmental
sustainability

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The Natural and Technological
Environments (3 of 4)
The Natural Environment The natural environment: Walmart
has emerged in recent years as the
Environmental sustainability world’s super “eco-nanny” through
involves developing strategies and its own sustainability practices and
practices that create a world its impact on the actions of its huge
economy that the planet can network of suppliers.
support indefinitely.

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The Natural and Technological
Environments (4 of 4)
The Technological Marketing technology: Disney
Environment takes full advantage of digital
technology in creating magical
• Most dramatic force in customer experiences at its
changing the marketplace Walt Disney World Resort.
• New products, opportunities
• Concern for the safety of new
products

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Learning Objective 4
Explain the key changes in the political and cultural
environments.

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The Political-Social and Cultural
Environments (1 of 5)
The Political and Social Environment
Legislation regulating business is intended to protect
• companies from each other
• consumers from unfair business practices
• the interests of society against unrestrained business
behavior

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The Political-Social and Cultural
Environments (2 of 5)
The Political and Social Environment
• Increased emphasis on ethics Cause-related marketing: Ben &
and socially responsible actions Jerry’s three-part “linked
• Cause-related marketing prosperity” mission drives it to
make fantastic ice cream
(product mission), manage the
company for sustainable
financial growth (economic
mission), and use the company
“in innovative ways to make the
world a better place” (social
mission). Both Ben & Jerry’s
and its products are “Made of
Something Better.”

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The Political-Social and Cultural
Environments (3 of 5)
The Cultural Environment
The cultural environment consists of institutions and other
forces that affect a society’s basic values, perceptions, and
behaviors.

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Cause-Related Marketing: Linking
Brands, Consumers, and Causes
Aerie’s #AerieREA L
campaign pledges that it
will use only unretouched
images and videos of real
women in its ads and other
marketing content. The
cause of body positivity
and inclusivity is an integral
part of the brand’s identity.

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The Political-Social and Cultural
Environments (4 of 5)
The Cultural Environment
Core beliefs and values are persistent and are passed on
from parents to children and are reinforced by schools,
churches, businesses, and government.
Secondary beliefs and values are more open to change and
include people’s views of themselves, others, organizations,
society, nature, and the universe.

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The Political-Social and Cultural
Environments (5 of 5)
The Cultural Environment Catering to the natural, organic, and
ethical products trend: Unilever’s Love
Shifts in Secondary Cultural Values
Beauty and Planet brand has one goal:
• People’s views of themselves “To make you more beautiful and give a
• People’s views of others little love to our planet.”
• People’s views of organizations
• People’s views of society
• People’s views of nature
• People’s views of the universe

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Learning Objective 5
Discuss how companies can react to the marketing
environment.

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Responding to the Marketing
Environment
Views on Responding
• Uncontrollable
– React and adapt to forces in the environment
• Proactive
– Take aggressive actions to affect forces in the
environment
• Reactive
– Watch and react to forces in the environment

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Real Marketing 3.2: In the Social Media
Age: When the Dialogue Gets Nasty
Today’s empowered consumers: Whole Foods Market’s decision to put
single pre-peeled oranges in individual plastic containers caused a viral
storm of #OrangeGate tweets. However, the retailer averted the potential
PR disaster by responding within hours with its own humorous, self-
critical social media posts admitting its mistake.

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