1. Chapter 3- slide 1
Chapter Three
Analyzing the Marketing
Environment

2. Analyzing the Marketing
Environment
• The Company’s Microenvironment
• The Company’s Macroenvironment
Topic Outline
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• The Company’s Macroenvironment
• Responding to the Marketing Environment

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

4. The Marketing Environment
Microenvironment consists of the actors
close to the company that affect its ability
to serve its customers, the company,
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to serve its customers, the company,
suppliers, marketing intermediaries,
customer markets, competitors, and
publics

5. The Company’s
Microenvironment
Actors in the Microenvironment
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6. The Company’s
Microenvironment
• Top management
• Finance
• R&D
The Company
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• R&D
• Purchasing
• Operations
• Accounting

7. The Company’s
Microenvironment
• Provide the resources to produce goods
and services
• Treated as partners to provide customer
Suppliers
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• Treated as partners to provide customer
value

8. The Company’s
Microenvironment
Help the company
to promote, sell and
distribute its
Marketing Intermediaries
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distribute its
products to final
buyers

9. The Company’s
Microenvironment
Resellers
Physical
distribution
firms
Types of Marketing Intermediaries
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firms
Marketing
services
agencies
Financial
intermediaries

10. The Company’s
Microenvironment
• Firms must gain strategic advantage by
positioning their offerings against
competitors’ offerings
Competitors
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competitors’ offerings

11. The Company’s
Microenvironment
Publics
• Any group that has an actual or potential interest in
or impact on an organization’s ability to achieve its
objectives
– Media publics
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– Media publics
– Government publics
– Citizen-action public
– General public

12. The Company’s
Macroenvironment
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13. The Company’s
Macroenvironment
Demography is the study of human populations
in terms of size, density, location, age, gender,
race, occupation, and other statistics
• Demographic environment is important
Demographic Environment
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• 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

14. The Company’s
Macroenvironment
• Increasing population
– Rapid growth in urban population in Asia
– In India, urban population to rise to 523 million
Demographic Environment
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– In India, urban population to rise to 523 million
by 2025

15. The Company’s
Macroenvironment
• A growing middle class
– MGI has divided the Indian population into 5
economic classes
Demographic Environment
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economic classes
– Division based on real annual disposable
income

16. The Company’s
Macroenvironment
• Deprived households have an annual
disposable income of less than Rs 90,000
– The poorest economic class
Demographic Environment
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– The poorest economic class
– Mostly unskilled or semi-skilled workers on
daily wages

17. The Company’s
Macroenvironment
• Aspirers have an annual disposable
income in the range of Rs 90,000 to Rs
200,000
Demographic Environment
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200,000
– Spend most of their income on basic
necessities
– Small-time retailers, small farmers, etc.

18. The Company’s
Macroenvironment
• Seekers have an annual disposable income
between Rs 200,000 and Rs 500,000.
Mostly white-collar employees, mid-level
government officials, newly employed
Demographic Environment
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government officials, newly employed
postgraduates, medium-scale traders

19. The Company’s
Macroenvironment
• Strivers have an annual income ranging
from Rs 500,000 to Rs 1,000,000
– Have a stable income source and access to
Demographic Environment
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– Have a stable income source and access to
amenities
– Mostly professionals such as lawyers, CAs,
senior government officials, rich farmers

20. The Company’s
Macroenvironment
• Global Indians have an annual
disposable income in excess of Rs
1,000,000
Demographic Environment
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1,000,000
– Creamy layer in society
– Globe-trotters with a high standard of living

21. The Company’s
Macroenvironment
Demographic Environment
• Growth in the rural population
• A changing family system
• The changing role of women
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• The changing role of women
• Increasing diversity

22. The Company’s
Macroenvironment
Economic environment consists of factors
that affect consumer purchasing power and
spending patterns
Economic Environment
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spending patterns
• Industrial economies are richer markets
• Subsistence economies consume most of
their own agriculture and industrial output

23. The Company’s
Macroenvironment
• The global financial crisis of 2007–2009 has
affected the consumption and production
of many products
Economic Environment
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24. The Company’s
Macroenvironment
• Ernst Engel—Engel’s Law
• As income rises:
Economic Environment
Changes in Consumer Spending Patterns
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• As income rises:
– The percentage spent on food declines
– The percentage spent on housing remains
constant
– The percentage spent on savings increases

25. The Company’s
Macroenvironment
Natural environment involves the natural
resources that are needed as inputs by
marketers or that are affected by marketing
activities
Natural Environment
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activities
• Trends
– Shortages of raw materials
– Increased pollution
– Increase government intervention
– Environmentally sustainable strategies

26. The Company’s
Macroenvironment
Technological Environment
• Most dramatic force in changing the
marketplace
• Creates new products and
opportunities
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opportunities
• Safety of new product always a
concern

27. The Company’s
Macroenvironment
Political environment consists of laws,
government agencies, and pressure groups
that influence or limit various organizations
Political Environment
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that influence or limit various organizations
and individuals in a given society

28. The Company’s
Macroenvironment
• Legislation regulating business
– Increased legislation
– Changing government agency enforcement
– New forms of nontariff barriers in trade
Political Environment
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– New forms of nontariff barriers in trade
• Increased emphasis on ethics
– Socially responsible behavior
– Cause-related marketing

29. The Company’s
Macroenvironment
Cultural environment consists of
institutions and other forces that affect a
society’s basic values, perceptions, and
Cultural Environment
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society’s basic values, perceptions, and
behaviors

30. The Company’s
Macroenvironment
Core beliefs and values are persistent and are
passed on from parents to children and are
reinforced by schools, religious institutions,
Cultural Environment
Persistence of Cultural Values
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reinforced by schools, religious institutions,
businesses, and government
Secondary beliefs and values are more open to
change and include people’s views of
themselves, others, organization, society,
nature, and the universe

31. Responding to the Marketing
Environment
Uncontrollable Proactive Reactive
Views on Responding
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• React and
adapt to
forces in the
environment
• Aggressive
actions to
affect forces
in the
environment
• Watching
and reacting
to forces in
the
environment