Kotler Pom17e PPT 03

Principles of Marketing
Seventeenth Edition
Chapter 3
Analyzing the Marketing
Environment
Copyright © 2018, 2016, 2014 Pearson Education, Inc. All Rights Reserved.
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.
Learning Objective 1
Describe the environmental forces that affect the company’s ability
to serve its customers.
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.
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.
Macroenvironment consists of the larger societal forces that affect the

microenvironment—demographic, economic, natural, technological, political,
and cultural forces.
The Microenvironment
The Company
In designing marketing plans, marketing management takes other
company groups into account.
• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting
Suppliers
• Provide the resources to produce goods and services
• Treat as partners to provide customer value
Marketing Intermediaries
Marketing intermediaries are firms that
help the company to promote, sell, and
distribute its goods to final buyers.
Marketing Intermediaries
Competitors
Firms must gain strategic advantage by positioning their

offerings strongly against competitors’ offerings in the minds of
consumers.
Publics
Any group that has an actual or potential interest in or impact on an
organization’s ability to achieve its objectives:
• Financial publics
• Media publics
• Government publics
• Citizen-action publics
• Local publics
• General public
• Internal publics
Customers
• Consumer markets
• Business markets
• Reseller markets
• Government markets
• International markets
Explain how changes in the demographic and economic
environments affect marketing decisions.
The Macro environment
The Macroenvironment
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.
• Baby Boomers – born 1946 to 1964
• Generation X – born between 1965 and 1976
• Millennials – born between 1977 and 2000
• Generation Z – born after 2000
Generational marketing is important in segmenting people by
lifestyle or life stage instead of age.
• Changing American family

• Changes in the workforce
Geographic Shifts in Population
• Growth in U.S. West and South and decline in
Midwest and Northeast
• Change in where people work
 Telecommuting
 Home office
Markets are becoming more diverse.

• International
• National
• Ethnicity
• Gay and lesbian
• Disabled
Economic Environment
Changes in Consumer Spending
Value marketing involves offering financially cautious buyers
greater value—the right combination of quality and service at a
fair price.
Income Distribution
Over the past several decades, the rich have grown richer, the
middle class has shrunk, and the poor have remained poor.
Identify the major trends in the firm’s natural and technological

environments.
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.
The Natural Environment
Trends in the Natural Environment
• Growing shortages of raw materials
• Increased pollution
• Increased government intervention
• Developing strategies that support environmental sustainability
Natural Environment
Environmental sustainability involves
developing strategies and practices that
create a world economy that the planet
can support indefinitely.
Technological Environment
• Most dramatic force in changing the
marketplace
• New products, opportunities
• Concern for the safety of new products
Explain the key changes in the political and cultural environments.
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
Political and Social Environment
• Increased emphasis on ethics
• Socially responsible behavior
• Cause-related marketing
Cultural Environment
The cultural environment consists of institutions and other forces
that affect a society’s basic values, perceptions, and behaviors.
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.
Discuss how companies can react to the marketing environment.
Responding to the Marketing Environment
Views on Responding
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Principles of Marketing

Macroenvironment consists of the larger societal forces that affect the

Firms must gain strategic advantage by positioning their

• Changing American family

Markets are becoming more diverse.

Identify the major trends in the firm’s natural and technological

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