Analyzing the Marketing Environment

The Marketing Environment and its Fundamental Forces

• The marketing environment consists of the outside forces that influence the ability of marketing management to build and maintain successful relationships with target customers.

• Success in marketing requires adapting to a fast-changing digital environment. For instance, Microsoft transformed itself into an essential brand in the post-PC, cloud-driven world.

• The marketing environment is divided into two distinct components:

  • Microenvironment: This consists of the actors located close to the company that directly affect its ability to serve customers.

  • Macroenvironment: This consists of larger societal forces that affect the entire microenvironment.

Actors within the Microenvironment

• To create value for customers, marketers must partner with other firms in the company’s value delivery network and work in harmony with various internal departments.

The Company

• Interrelated groups within a company constitute the internal environment.

• Departments such as finance, R&D, purchasing, operations, and accounting must share the responsibility of understanding customer needs and creating customer value.

Suppliers

• Suppliers provide the essential resources needed by the company to produce goods and services.

• Marketing management must monitor supplier-related problems as they can seriously affect marketing, including:

  • Supply shortages or delays.

  • The impacts of natural disasters.

  • Other unforeseen events.

• High-performing companies like L’Oréal focus on building long-term supplier relationships based on mutual benefit and growth. L’Oréal aims to be one of the most respected companies, which includes maintaining respect with their suppliers.

Marketing Intermediaries

• These are firms that help the company promote, sell, and distribute its products to final buyers. They include:

  • Resellers: Distribution channel firms that help the company find customers or make sales to them.

  • Physical distribution firms: Help the company stock and move goods from their points of origin to their destinations.

  • Marketing services agencies: Research firms, advertising agencies, and media firms that help the company target and promote its products.

  • Financial intermediaries: Banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against risks.

• Example: Apple partners with retail intermediaries by providing not only products like phones and smartwatches but also dedicated technical support.

Competitors

• Marketers must gain a strategic advantage by positioning their products strongly against those of competitors in the minds of consumers.

• There is no single competitive strategy that is inherently best for all companies; strategies must be tailored to the firm's specific market position and resources.

Publics

• A public is any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. There are seven types of publics:

  • Financial publics: Groups that influence the company’s ability to obtain funds (e.g., banks, investment analysts).

  • Media publics: Groups that carry news, features, and editorial opinion (e.g., newspapers, magazines, television stations).

  • Government publics: Management must take government developments into account (e.g., product safety, truth in advertising).

  • Citizen-action publics: Marketing decisions may be questioned by consumer organizations, environmental groups, or minority groups.

  • Local publics: Includes neighborhood residents and community organizations.

  • General public: The company must be concerned about the general public’s attitude toward its products and activities.

  • Internal publics: Includes workers, managers, volunteers, and the board of directors.

Customers

• Customers are established as the most important actors in the microenvironment. The entire value delivery system aims to serve target customers and create strong relationships.

• There are five types of customer markets:

  1. Consumer markets: Individuals and households that buy goods and services for personal consumption.

  2. Business markets: Buy goods and services for further processing or use in their production processes.

  3. Reseller markets: Buy goods and services to resell them at a profit.

  4. Government markets: Government agencies that buy goods and services to produce public services or transfer them to others who need them.

  5. International markets: Buyers in other countries, including consumers, producers, resellers, and governments.

Forces in the Company's Macroenvironment

• The macroenvironment consists of six major forces that shape opportunities and pose threats to the company.

Demographic Environment

• Demography is the study of human populations regarding size, density, location, age, gender, race, occupation, and other statistics.

• Marketers analyze key demographic trends:

  • Changing Age and Family Structures: The U.S. population is segments into generational groups:

    • Baby Boomers

    • Generation X

    • Millennials (Generation Y)

    • Generation Z: Targeted by companies like Netflix, which created a "Just for Kids" portal specifically for this tech-savvy segment.

    • Generation Alpha: The youngest generation currently gaining market focus.

  • Geographic Population Shifts: Movement of people between regions.

  • Educational and Occupational Characteristics: A trend toward a better-educated, more white-collar, and more professional population.

  • Increasing Diversity: Growing differences in race, ethnicity, and lifestyle choices.

Economic Environment

• Consists of factors that affect consumer purchasing power and spending patterns.

• Marketers must track changes in consumer spending and differences in income distribution.

Natural Environment

• Involves the physical environment and natural resources that are needed as inputs or affected by marketing activities.

• Trends in the natural environment include:

  • Shortages of raw materials.

  • Increased pollution levels.

  • Increased government intervention in natural resource management.

  • The rise of the "green movement" and environmental sustainability. Example: Timberland develops products designed to do less harm to the environment.

Technological Environment

• New technologies create new markets and opportunities but also replace old technologies.

• Significant trends include:

  • Digital Technology: Inseparable from modern consumer life.

  • The Internet of Things (IoT): Connects physical devices to the internet, creating new marketing landscapes.

  • Radio-frequency identification (RFID): Used to track products through the distribution chain.

• Government agencies may investigate and ban potentially unsafe products created by new technology.

Political and Social Environment

• Consists of laws, government agencies, and pressure groups that influence or limit organizations and individuals.

• Legislation regulating business is intended to protect:

  • Companies from each other.

  • Consumers from unfair business practices.

  • The interests of society against unrestrained business behavior.

Major U.S. Legislation Affecting Marketing ($1990-2020$)

• Nutrition Labeling and Education Act ($1990$): Requires food product labels to provide detailed nutritional information.

• Children’s Online Privacy Protection Act (COPPA) ($2000$): Prohibits the online collection of information from children without parental consent and allows parents to review collected information.

• Do-Not-Call Implementation Act ($2003$): Collects fees from telemarketers to enforce a national Do-Not-Call Registry.

• CAN-SPAM Act ($2003$): Regulates the distribution and content of unsolicited commercial e-mail.

• Financial Reform Law ($2010$): Created the Bureau of Consumer Financial Protection; enforces the Truth-in-Lending Act and Home Mortgage Disclosure Act.

• Exports Promotion Act ($2010$): Authorizes the Commerce Department to strengthen global markets for U.S. goods, especially those from small, medium, and rural businesses.

• Internet of Things Cybersecurity Improvement Act ($2020$): Increases cybersecurity for IoT devices connecting to the internet.

Social Responsibility and Marketing Ethics

• Socially responsible companies seek to protect the long-run interests of consumers and the environment.

• Cause-Related Marketing: Used by companies to exercise social responsibility and build positive brand images. It is a primary form of corporate giving, though it can be controversial if viewed as a strategy to increase sales rather than a genuine charitable effort.

• Example: Warby Parker operates on a cause-based model; for every pair of glasses sold, one pair is distributed to someone in need. This represents brand activism where social good is integral to profitability.

Cultural Environment

• Consists of institutions and forces that affect a society’s basic values, perceptions, preferences, and behaviors.

• Persistence of Cultural Values:

  • Core beliefs and values: High degree of persistence (e.g., belief in work, marriage, charity) and are passed from parents to children.

  • Secondary beliefs and values: More open to change. Marketers focus on shifts in people's views about themselves, others, organizations, society, nature, and the universe.

• Example: Unilever’s Love Beauty and Planet brand caters to the trend of natural, organic, and ethical products with the goal of giving "a little love to our planet."

Responding to the Marketing Environment

• Companies can take two different approaches to the marketing environment:

  • Reactive firms: These firms passively accept the environment as it is. They do not attempt to change it and only react to shifts when they occur.

  • Proactive firms: These firms develop strategies to change the environment. They take aggressive actions to affect the publics and forces in their environment rather than simply observing them.

Questions & Discussion

• Dialogue on Brand Activism: Some cause-related marketing efforts go beyond simple fund-raising and become an integral part of a brand's identity and positioning.

• Question: What are some examples of brand activism?

• Discussion Context: The session concludes with the acknowledgment that for companies like Warby Parker, doing good is the core of their business model, suggesting that students identify other brands that use their platform to advocate for social or environmental causes.

Mikro dan makro saling mempengaruhi. Lingkungan makro, seperti perubahan ekonomi atau undang-undang, boleh mempengaruhi lingkungan mikro. Sebagai contoh:

• Jika keadaan ekonomi menjadi buruk (makro), pelanggan mungkin membeli kurang banyak barang (mikro).

Sebaliknya, jika syarikat mengubah cara mereka beroperasi dengan menawarkan produk baru (mikro), ini juga dapat mempengaruhi bagaimana pelanggan melihat brand tersebut, yang akhirnya dapat memberikan dampak pada lingkungan makro melalui tren baru dalam pasaran.

• Lingkungan pemasaran adalah semua perkara di luar syarikat yang boleh mempengaruhi cara syarikat menjual barang atau perkhidmatan.

• Ada dua bahagian besar dalam lingkungan pemasaran:

  1. Lingkungan Mikro: Ini adalah benda-benda dekat dengan syarikat yang mempengaruhi penjualan.

  • Syarikat: Semua bahagian dalam syarikat seperti kewangan dan operasi perlu bekerjasama untuk memahami apa yang pelanggan mahu.

  • Pembekal: Mereka memberi barang atau bahan yang diperlukan untuk membuat produk. Jika mereka tidak dapat menghantar bahan tepat pada masa, itu boleh mengganggu syarikat.

  • Pelanggan: Mereka adalah orang yang membeli barang yang kita jual. Kita perlu tahu apa yang mereka suka agar mereka mahu beli.

  1. Lingkungan Makro: Ini adalah perkara besar yang mempengaruhi semua syarikat.

  • Persekitaran Demografi: Ini tentang orang. Kita perlu tahu umur, tempat tinggal, dan apa yang mereka suka. Contohnya, kanak-kanak mungkin suka barang mainan.

  • Ekonomi: Keadaan duit dalam negara. Jika ekonomi buruk, orang mungkin tidak beli barang sebanyak biasa.

  • Teknologi: Perubahan dalam teknologi yang boleh bantu pemasaran. Contohnya, ada aplikasi baru yang membantu jual barang lebih mudah.

  • Perundangan: Aturan dan undang-undang yang mesti diikuti ketika menjual barang. Ini memastikan kita jual dengan cara yang betul dan adil.

• Strategi Pemasaran: Syarikat perlu ada cara untuk menjual produk mereka dengan baik. Mereka perlu tahu pelanggan dan pesaing mereka.

• Tanggungjawab Sosial: Syarikat perlu juga berfikir mengenai kebaikan masyarakat. Mereka boleh buat kerja amal atau projek yang baik untuk masyarakat.