【讲座会议】The Marketing Environment
The Marketing Environment
Previewing the Concepts—Chapter Objectives
1. Describe the environmental forces that affect the company’s ability to serve its customers.
2. Explain how changes in the demographic and economic environments affect marketing decisions.
3. Identify the major trends in the firm’s natural and technological environments.
4. Explain the key changes in the political and cultural environments.
5. Discuss how companies can react to the marketing environment.
JUST THE BASICS
Although the first two chapters of the text provide an overview of all of the important topics in marketing and sets the stage for the remainder of the topics covered, this third chapter starts going into detail on the first step of the marketing process—understanding the environment in which the company operates.
The chapter describes the major micro- and macroenvironments in which the company operates. The microenvironments dealt with will build on the customer and partner relationships developed in prior chapters; they include the other company departments, as well those companies in the supply chain, the value chain, and the customers themselves. Interested publics are also discussed.
The macroenvironment includes demographic changes, and the economic, natural, technological, political, and cultural environment. All of these forces need to be studied continuously to ensure that the company’s business and product portfolios are still meeting the needs of its customer base.
a. Millennial fever is an environmental factor affecting the baby-boom generation. It is defined as a “yearning to turn back the clock” to “simpler times.”
b. This nostalgia is causing companies to develop and market retro products that will appeal to those caught up in this “fever.”
c. Volkswagen has attained great success by tapping into the force and re-introducing the car that helped define the baby-boom generation, the Beetle.
d. A company’s marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.
Use Key Term Marketing Environment here.
Use Chapter Objectives 1 here.
e. There are both opportunities and threats in the marketing environment.
f. The microenvironment consists of the actors close to the company that affect its ability to service its customers.
g. The macroenvironment consists of the larger societal forces that affect the microenvironment.
Use Key Terms Microenvironment and Macroenvironment here.
2. The Company’s Microenvironment
a. Figure 3-1 shows all of the players affecting the company from a micro point of view.
b. Relationships with all these actors must be developed so that marketing management can successfully create customer value and satisfaction.
Use Figure 3-1 here.
c. All the interrelated functional groups within the company form the internal environment.
d. Marketing management must take these other groups into account:
1. Top management sets the mission, objectives, broad strategies, and policies.
2. Finance finds the money to carry out the marketing plans.
3. R&D designs safe and attractive products.
4. Purchasing gets the supplies and materials needed.
5. Operations’ produces and distributes the product.
6. Accounting measures revenues and costs, and helps marketing understand how well it is achieving objectives.
e. All these departments must work in concert and according to the “marketing concept” to “think consumer.”
f. Suppliers are an important link in the company’s value delivery system.
g. Marketing managers must pay attention to the availability of supplies, because shortages, delays, and strikes could damage customer satisfaction.
h. Suppliers today are frequently treated as partners in creating and delivering value to customers.
i. Marketing intermediaries help companies promote, sell, and distribute goods to final buyers.
Use Key Term Marketing Intermediaries here.
j. They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries.
1. Resellers are distribution channel firms that help the company find customers or make sales to them. They include wholesalers and retailers, who buy and resell merchandise.
2. Physical distribution firms assist the company in stocking and moving goods from their points of origin to their destinations.
3. Marketing services agencies perform some of the marketing functions such as market research, advertising, and media selection and placement.
4. Financial intermediaries include banks, credit companies, insurance companies and others that help finance transactions or insure against risks.
k. Marketing intermediaries are also important links in the value delivery system.
l. There are five types of customer markets that must be studied.
1. Consumer markets are made up of individuals and households that buy goods and services for personal consumption.
2. Business markets buy the goods and services for further processing or for use in their production process.
3. Reseller markets buy goods and services to resell at a profit.
4. Government markets consist of government agencies that buy goods and services to produce public services, or transfer the goods to others who need them.
5. International markets are made up of and of the above types of customers in other countries.
m. Marketers must know their competitors’ strengths so that they can develop positioning strategies that differentiate their own products against the competitors’.
n. No single competitive strategy will work for all companies.
o. A public is any group that has an actual or potential interest in or impact on an organization. There are seven types of publics:
Use Key Term Public here.
Use Discussing the Issues1 here.
1. Financial publics influence the company’s ability to obtain funds.
2. Media publics carry news, features, and editorial opinions.
3. Government publics may develop and enforce regulations on product safety, truth in advertising and other matters.
4. Citizen-action publics are consumer organizations, environmental groups, minority groups, etc. that may question a company’s decisions.
5. Local publics include neighborhood residents and community organizations.
6. General publics may be concerned about a company’s products and activities.
7. Internal publics include workers, managers, etc. who need to feel good about their company.
Applying the Concept
Describe the microenvironment for the School of Business at your University. What internal departments must the school interact with? Who are the customers and competitors? Do you know if there are any marketing intermediaries? What publics might be interested in what the School of Business is doing?
3. The Company’s Macroenvironment
a. Figure 3-2 shows the macroenvironmental forces that affect a company in the way of shaping opportunities and posing threats.
Use Figure 3-2 here.
b. Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.
Use Key Term Demography here.
Use Chapter Objectives 2 here.
Use Discussing the Issues 2 here.
c. This is interesting to marketers because it involves people; it is people that make up markets.
d. The world population is now greater than 6 billion, and will pass 8 billion people by the year 2030.
e. A growing population means growing human needs to satisfy. Market opportunities could also be growing if purchasing power is growing as well.
f. Marketers track changing age and family structures, geographic population shifts, educational characteristics, and population diversity.
g. In the United States, the single most important demographic trend is the changing age structure of the population.
1. The baby boomers were born between 1946 and 1964, and number 78 million. They have become one of the most powerful forces shaping the U.S. marketing environment.
2. Generation X is a “birth dearth” generation, numbering 45 million people born between 1965 and 1976. They tend to be cautious in their economic outlook because they grew up in a time of recession and corporate downsizing.
3. Generation Y’s members were born between 1977 and 1994, and number about 72 million. This generation is still developing their buying preferences and behaviors.
Use Key Terms Baby Boomers, Generation X, and Generation Y here.
Use Figure 3-3 here.
Use Marketing at Work 3-1 here.
h. Marketers must decide whether to develop marketing plans and strategies based on generational differences.
i. The traditional family is being redefined.
1. Married couples with children now make up only about 34% of the U.S. households; married couples and people living with other relatives are 22%; single parents, 12%; 32% are nonfamily households.
2. The number of working women has increased greatly from 1950 when it was about 30% of the U.S. workforce to just over 60% today.
Let’s Discuss This
Most of the students’ parents will be from the Baby Boom generation. Discuss how the students’ upbringing and daily lives may have differed from what their parents experienced in their own upbringing, and what those differences mean for marketers.
j. There are also great geographic shifts in populations, both between and within countries.
1. In the United States, there has been a shift toward the Sunbelt states over the last two decades.
2. Marketers are interested in these kinds of shifts because people in different regions buy differently.
3. The shift in where people live has also shifted where they work.
k. The U.S. population is becoming better educated.
1. In 2002, 84% of the population over age 25 had completed high school, and 27% completed college, up from 69% and 17% in 1980.
2. The rising number of educated people will increase demand for quality products, books, magazines, travel, personal computers, and Internet services.
l. There are also more white-collar workers in the United States.
m. Ethnic and racial make up varies among countries.
1. Japan is at one extreme with the United States at the other.
2. The U.S. population is 71% white, 12% African American and Hispanic, 4% Asian; the remaining 1% is made up of American Indian, Eskimo and Aleut peoples.
3. Many companies design products and promotions to appeal to the diverse ethnic and racial groups.
n. The gay and lesbian markets are also being recognized as important to marketers.
o. Another attractive market segment is that of the 54 million people with disabilities.
p. As the population grows more diverse, marketers will continue to diversify their marketing programs to take advantage of that diversity.
Use Speed Bump here.
Use Application Questions 1 here.
q. The economic environment consists of factors that affect consumer purchasing power and spending patterns.
Use Key Term Economic Environment here.
r. Nations vary greatly in their levels and distribution of income.
1. Subsistence economies consume most of their own agricultural and industries output. They represent few marketing opportunities.
2. Industrial economies are at the other extreme, and represent rich markets for many kinds of goods.
s. Incomes change all the time, and marketers need to track those changes.
1. The 1980s saw a consumption frenzy fueled by income growth, federal tax reductions, rapid increases in housing values, and a boom in borrowing.
2. The 1990s saw a recession hit, and consumers started to spend more carefully.
3. In the early 2000s, consumers are still spending carefully.
t. Marketers also need to pay attention to income distribution
1. At the top of income distribution in the United States are the upper-class consumers, who are generally not affected by current economic events.
2. The middle class is comfortable, but is somewhat careful in their spending.
3. The members of the working class stick to the basics of food, clothing, and shelter.
4. The underclass members are those on welfare and many retirees who must count pennies to make even the most basic purchases.
u. Ernst Engel, over a century ago, noted that people shifted their spending as their income rose. This is now known as Engel’s laws and is noted in Table 3-1.
Use Key Term Engel’s Laws here.
Use Table 3-1 here.
Use Discussing the Issues 3 here.
v. Changes in major economic variables have a large impact on the marketplace.
w. With adequate warning, companies can take advantage of changes in this environment.
x. The natural environment involves the natural resources that are needed as inputs by marketers, or that are affected by marketing activities.
Use Key Term Natural Environment here.
Use Chapter Objectives 3 here.
Use Focus on Ethics here.
y. Environmental concerns have grown over the last three decades. There are several trends that should be tracked:
1. Shortages of raw materials: both renewable (forests, food) and nonrenewable (oil, coal, minerals) resources pose serious problems.
2. Increased pollution is a problem worldwide.
3. Increased government intervention in management of natural resources varies by country.
z. Companies are developing environmentally sustainable strategies and practices in an effort to develop an economy that can be supported indefinitely.
aa. The technological environment is a dramatic force in the marketplace today creating new markets and opportunities.
Use Key Term Technological Environment here.
Use Marketing at Work 3-2 here.
bb. The United States leads the world in research and development spending.
cc. Many companies are adding marketing people to R&D teams to obtain a stronger marketing orientation.
dd. Safety is an increasing concern as technology becomes more complex.
1. The U.S. Food and Drug Administration (FDA) have regulations to test new drugs.
2. The Consumer Product Safety Commission sets safety standards for products.
3. Marketing must be aware of and adhere to regulations that affect developing new products.
ee. The political environment consists of laws, government agencies and pressure groups that influence or limit various organizations and individuals in a given society.
Use Key Term Political Environment here.
Use Chapter Objectives 4 here.
ff. Regulation can encourage competition and ensure fair markets.
gg. Governments develop public policy to help guide markets.
hh. Legislation affecting business has been increasing.
1. The United States has laws covering competition, fair trade practices, environmental protection, product safety, truth in advertising, consumer privacy, packaging and labeling, pricing, and other issues. Table 3-2 lists many of the most important laws.
2. The European Commission is also establishing a framework of laws covering many of these same issues.
ii. Business legislation is enacted to protect companies from each other; to protect consumers from unfair business practices; and to protect the interests of society.
jj. Government agencies have discretion in how they enforce the laws that are passed.
kk. Marketers need to track laws at the local, state, national, and international levels.
ll. Enlightened companies ask their managers to be socially responsible over and above existing laws.
mm. E-commerce has created an entirely new set of legal and ethical issues. Online privacy issues are a great concern.
nn. Many companies are exercising social responsibility through cause-related marketing.
Use Table 3-2 here.
Use Discussing the Issues 4 here.
oo. The cultural environment is made up of institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors.
Use Key Term Cultural Environment here.
pp. People are affected by the worldview that defines their relationships with others that their society adheres to.
qq. Cultural values are persistent; these beliefs shape specific attitudes and behaviors.
1. Core beliefs and values are passed on from parents to children.
2. Secondary beliefs are more open to change.
rr. Cultural swings do take place. Marketers want to predict these shifts in order to react to both opportunities and threats.
ss. The major cultural values of a society are expressed in the following views:
1. People’s views of themselves.
2. People’s views of others.
3. People’s views of organizations.
4. People’s views of society.
5. People’s views of nature.
6. People’s views of the universe.
Use Speed Bump here.
Use Application Questions 2 here.
Let’s Discuss This
How does the view you hold about yourself affect what and how you buy your clothing?
4. Responding to the Marketing Environment
a. Many companies think the marketing environment is an uncontrollable element they have to adapt to.
b. Other companies take an environmental management perspective to affect the publics and forces in their environment.
c. Marketing managers should take a proactive rather than reactive approach to the marketing environment.
Use Key Term Environmental Management Perspective here.
Use Chapter Objectives 5 here.
Use Marketing at Work 3-3 here.
Use Discussing the Issues 5 here.
Use Application Questions 3 here.
Use Under the Hood/Focus on Technology here.
Discussing the Issues
1. The microenvironment includes a variety of publics that have an interest in the company or can impact its operations. Discuss how the goals of some of these publics may be opposed to one another. How would opposing goals among a company’s relevant publics impact its strategy?
Responses will vary to this question. One example is that government publics and citizen action publics may find some activities (e.g., logging) undesirable, but others like the general public or the financial publics may consider the activity as a natural part of doing business. Thus, their objectives and interests are different. This has an impact on how a company plans its activities as it often cannot afford to alienate certain groups and therefore must make some concessions in the course of planning its activities.
2. The changing structure of the American family was identified as an important demographic force shaping the opportunities and threats to the company. Explain how a grocery store could change its positioning to appeal to each of the following segments: married couples with children, single parents, and adults living alone.
Students should discuss generally how the store would be positioned for each group. Then, in a more specific way, they should identify what this positioning means in terms of the marketing mix variables. That is, how will elements of the four Ps be altered to accomplish each positioning goal?
3. Value marketing—the right combination of product quality and good service at a fair price—has increased in popularity. Pick an industry and identify two competing companies, one that is good at value marketing and one that is poor at value marketing. For the company that is poor at value marketing, discuss why consumers purchase from that company. What need is it fulfilling better than the firm that is good at value marketing?
Responses will vary based on the industry and firms selected by the students. It is instructive to emphasize in class that even those firms identified as poor at value marketing are selling some product. Therefore, the question should be posed who is buying the product and why? It may be that a particular niche is actually being served well by the “poor value” company.
4. The 2002 Sarbanes-Oxley Act, among other things, has made high level corporate executives personably accountable for the accuracy of their company’s earnings statements, requires public companies to improve their financial control systems, and calls for some board members to be from outside the company. What impact might this legislation have on business operations?
Instructors can use this question when they wish to bring out examples of the political environment’s impact on business.
5. An environmental management perspective advocates taking a proactive, rather than reactive, approach to dealing with the marketing environment. Identify a company you feel characterizes this approach. What specific actions do they take to proactively influence their environment?
Individual student responses will vary based upon the specific company selected. Instructors can use this question to highlight the concept of proactive environmental management.
1. For educational institutions, the number, quality, and characteristics of its student body are heavily impacted by changes in the size and structure of the general population. Discuss how your school is likely to be impacted by the following trends: an aging population, a growing population, a changing definition of the family, geographic shifts in population, a more white-collar workforce, and increasing ethnic and cultural diversity. For those trends that have a negative impact, what strategy would you recommend for mitigating the negative influence?
This question emphasizes the impact of the demographic environment on business operations. The context of a university should be familiar to students and allow for a variety of informed opinions regarding the likely impact of these demographic forces. Students will likely come up with issues regarding the number of faculty needed, the infrastructure changes required (i.e., parking, buildings, food service, recreation, etc.). Instructors may want to encourage students to think about how those challenges will be met both financially and from an implementation standpoint.
2. The text argues that major cultural values in society are defined by individual’s views of themselves and others, as well as their views of organizations, society, nature, and the universe. Break into groups of four to five students, with each group focusing on one of these six views. Noting the shift discussed in the text for your groups assigned area, identify a company that has benefited from the shift and one whose position has worsened. For those organizations that have not fared as well under the shift, what must they do to better adjust to this trend?
Student responses will vary based on the companies they select. An instructor can use this question to highlight the impact of culture on marketing operations. Instructors may choose to limit the student teams to a particular industry. This will make this assignment a bit more difficult, but may add some interesting insights into how cultural values interact with each other.
3. The Federal Trade Commission estimates that its national do-not-call registry will contain more than 60 million phone numbers by July 2004. In response, a telemarketing trade association has challenged the legality of this consumer telemarketing call blocking service in federal court. Describe what activities might have been engaged in if the telemarketing industry had taken a more proactive environmental management perspective toward this issue. What is your opinion on balancing the privacy of consumers with the rights of legitimate telemarketing firms to conduct business?
Instructors can use this application question to show how the government is able to step in and make changes when companies perform acts that are unwelcome by consumers. Having students think back to how this situation could have been avoided is instructive in helping them to realize that a company or industry can often self-regulate themselves and avoid unwanted governmental action.
Under the Hood/Focus on Technology
Customer loyalty for online travel companies is low, with the average consumer checking three travel websites for the best price on airlines, hotels, and rental cars. Today, approximately 15% of all travel is purchased online, with airline ticket sales accounting for about half of that amount. Three online travel companies, Expedia (36% of the market), Travelocity (24%), and Orbitz (13%) account for the majority of online travel sales. Although consumers have been focused on where to get the best deals, many online travel companies have been investing in new technology that will allow them to differentiate themselves on the services they provide rather than the prices they offer.
1. What macroenvironmental forces do you feel will have the largest positive and largest negative impact on online travel companies? Why?
Technological forces (in terms of the ability to interact with consumers), economic (in terms of consumers spending patterns and level of discretionary income for travel), and demographic (in terms of the number of retired individuals engaging in more travel activity) will likely all have an impact.
2. Discuss how online travel companies should address these negative impacts.
Responses will vary depending upon the particular negative impact identified by the students.
3. What do you think is the long run future of the online travel industry?
It may be interesting to have students consider this question creatively and think in terms of 5 years and 25 years away. Instruct them to address this question in terms of not only the sales transaction, but also other issues such as how travel destinations will be marketed or how safety concerns in travel might be addressed in an online environment.
4. What do you feel are the most significant environmental issues facing the online travel industry in the next five years?
The economic situation and technological advances will likely have the greatest short-term impact.
Focus on Ethics
How many times have you or your parents purchased a new computer in the past 5 years? As computers become more and more powerful, regular updating of computer equipment has become common. Have you ever wondered where all of the old computers and monitors go? Are they sitting in your house somewhere, in the garage maybe?
Concerns over decreasing raw materials, increasing pollution levels, and global warming have gained momentum over the last several years. Although many companies have been accused of polluting the environment, some have used society’s concern over the natural environment to differentiate themselves from competitors. One such company is Dell Computer, who recently initiated a recycling program for businesses and consumers that includes computers, monitors, keyboards, and, mice—all those items that may be hanging around in your house.
How does this work? You pay a fee of $15.00 per 50 pounds of weight, and Dell has someone pick up your computers and monitors. The average computer and monitor weigh over 50 pounds but less than 100 pounds, so the cost is likely to be $30.00 to the customer. Dell then will either recycle or resell the old computer equipment, thus sparing landfills from the hazardous materials contained in much of today’s existing computer equipment.
1. Assume that the price paid by the owners of the old computer equipment does not cover Dell’s cost of recycling. What benefits might Dell gain that would be worth this expense?
Benefits such as consumer goodwill and improved corporate image might make the added expense worth the cost.
2. What actions might government take if it became concerned about the disposal of unwanted computer equipment? How can Dell’s recycling efforts be considered similar to an environmental management perspective?
Have students think about this from both a local level (i.e., the local waste disposal services provided by their city) and the federal or state level (which have the potential to pass legislation governing how computers are disposed).
3. Might Dell’s computer recycling program help to differentiate it from other computer manufacturers? How much influence would a recycling program like the one described above for Dell Computer have on your decision to buy a computer from a particular company?
Student responses will vary based on their own level of concern in this issue. Encourage students to think about the sustainability of this program as a strategic advantage. How easy would it be for others to emulate Dell’s practice?
Barriers to Effective Learning
1. This is an intense chapter, and presents a whole lot of information that might make some students’ heads swim. If it hasn’t happened before, this is where students really begin to get the picture that marketing managers need to be very analytical. Presenting the in-depth discussion of current macro trends as something that needs to be understood but not memorized helps.
2. Students will also be anxious about how a marketing manager successfully tracks these kinds of forces. Explaining the use of purchased marketing and economic reports, and what market researchers do for a living, helps relieve that anxiety.
3. As usual, examples of companies who successfully adapt to changing forces and factors will help students internalize the messages in this chapter.
1. List two examples of how the technological environment has helped marketers.
2. Should the United States regulate advertising for things that are purported to be bad for you, such as cigarettes and alcohol? How about for fast food?
3. Find an example of a company that you believe has an environmental management perspective. What is it doing to be proactive toward its environment? Describe the process you went through to discover the company’s perspective.
4. After reading the material in the chapter on the demographic environment and projected trends, pick a company or industry of your choice and cite what you believe to be the five most important demographic trends that will impact the company’s or the industry’s future. Explain why you picked the trends that you did.
Classroom Exercise/Homework Assignment
Nokia has been an extremely successful company, launching new cell phone technology usually well ahead of its competition. It’s hit some bumps recently as the economic environment has stagnated, but overall, this is a company that knows how to develop and sell technology. Visit the Nokia website at www.nokia.com and review the material there.
1. Look at the ads on the homepage and the information about Club Nokia. What generation is Nokia targeting?
Clearly, Nokia knows that its growth is going to be coming from Gen Y. Its ads on its homepage show young people, and images young people would relate to. Although Club Nokia is not yet active in the United States, again, it is targeted at the young. It offers games, cartoons, movies and alternate tones and graphics, something the Baby Boom generation, for example, is not going to be that interested in.
2. Nokia seems to be interested in preserving their natural environment. Why?
Although Nokia may well be interested in preserving nature, one of their first FAQs answers says that their recycling efforts are managed on a national level, because “legislation and recycling efforts vary by country.” Plus, they bury this information several levels down. You have to go to “Investor Information,” then “2002,” and only then can you find their environmental efforts. It appears that their interest in the natural environment may be purely based on the political environment(s) they face.
3. How has the economic environment impacted Nokia?
Nokia’s sales really took off in 2000, but since then the company has had a tough time managing any growth at all. Clearly, the overall economic climate has been a drag on the company, as, most likely, has the huge penetration, almost saturation, of cell phones in markets around the world. Nokia barely managed to eke out any growth at all in 2001, and 2002 actually saw a dip in net sales. They appear to be growing again in the first half of 2003, as this is written. Nokia’s strategy of constantly launching new models (35 planned for 2003) and new technologies will most likely keep them in the market share leadership position, and will stand it in good stead as the economic recovery strengthens.
Classroom Management Strategies
This will be the first time students will have thought about the marketing environment and what it means to companies in their marketing efforts. The concept of understanding consumer needs and wants will be totally foreign to them at worst, and at best a novel concept. Once the students begin to see the complexity of the marketing environment, however, there will be a tendency for their eyes to glaze over. As usual, working through several examples for each concept will help tremendously.
1. College is a place to break things down into their component parts to study them in isolation. The section on the company’s microenvironment may well be the first time the students will have looked at marketing as needing to pay attention to anything other than marketing concepts. At least 15 minutes should be devoted to this topic in class. The difficult concepts will most likely be in the areas of marketing intermediaries and publics; spending sufficient time on these two topics will make the follow-on chapters that much easier.
2. The majority of the class time, 30 to 40 minutes, should be spent on the macroenvironment. There is a tremendous amount of information in this section, particularly in the section describing the demographic environment. It’s helpful here to link some of these concepts back to what they learned in sociology courses, or, if the students have not taken any of the social sciences, you can point out how they interact with business. The next most intense part of this section is the political environment and the sheer number of laws passed that affect marketers. The cultural environment section is a good time to tie in principles of psychology.
3. Finally, the last part of the class will be spent on Responding to the Marketing Environment. You can have some fun with the Marketing at Work “YourCompanySucks.com” while at the same time having a serious discussion about the concepts of managing your environment, rather than reacting to it.