Chapter 3:

The Marketing Environment

Chapter outline:
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.
 A Company’s Marketing Environment

The marketing
environment includes Microenvironment consists of the actors close to the
company that affect its ability to serve its customers—
the actors and forces the company, suppliers, marketing intermediaries,
outside marketing that customer markets, competitors, and publics.
affect marketing
management’s ability Macroenvironment consists of the larger societal
to build and maintain forces that affect the microenvironment—
successful relationships demographic, economic, natural, technological,
with target customers. political, and cultural forces.
 The Microenvironment

Actors in the Microenvironment

 The Microenvironment
Suppliers

• Provide the resources to produce goods and services

• Treat as partners to provide customer value

Suppliers: Giant furniture retailer IKEA 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.
 Example: Tourism industry

• Shifts in tourism
behavior could
result in high-end
domestic trips.
• Price cuts could be
used to stimulate
demand but aren’t
sustainable for the
long term
 The Microenvironment

Competitors
Firms must gain strategic advantage by
positioning their offerings strongly
against competitors’ offerings in the
minds of consumers.
 The Microenvironment
Publics Publics: P&G has a long history of giving
back to its local publics. The Tide Loads
of Hope program brings “hope not just
Any group that has an actual or potential soap” in the form of free mobile laundry
interest in or impact on an organization’s services to people in communities facing
ability to achieve its objectives natural disasters.

» Financial publics
» Media publics
» Government publics
» Citizen-action publics
» Local publics
» General public
» Internal publics
 The Microenvironment

Customers
• Consumer markets
• Business markets
• Reseller markets
• Government markets
• International markets
https://viracresearch.com/thi-truong-thoi-trang-viet-nam-va-
xu-huong-thoi-trang-2021/
 Example: Fashion industry

• Fashion brands,
manufacturers and
retailers are
increasingly
preparing to adopt
new production
practices.

https://hanoitimes.vn/vietnams-fashion-industry-to-focus-more-on-sustainability-317364.html
 The Microenvironment

Marketing Intermediaries
Marketing intermediaries are firms
that help the company to promote,
sell, and distribute its goods to final
buyers.

• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries
 The Microenvironment

The Company Top

management
In designing
marketing plans, Human
Finance
marketing resources
management takes
other company Research and
groups into account. Operations development
(R&D)

Information
Purchasing
technology
 The Macroenvironment

Major Forces in the Company’s Macroenvironment

 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.
 The Demographic Environments

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.
 The Demographic Environments
The Demographic Environment
• The changing family structure
• Geographic shifts in population
• A better-educated, more white-
collar, more professional population
• Increasing diversity
 The Economic Environments

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.
 The Natural Environments

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.

Trends in the Natural Environment

• Growing shortages of raw materials
• Increased pollution
• Increased government intervention
• Developing strategies that support
environmental sustainability
The Natural Environments
 The Natural Environments
The Natural Environment

Environmental sustainability
involves developing strategies and
practices that create a world
economy that the planet can
support indefinitely.

The natural environment: Walmart has emerged in

recent years as the world’s super “eco-nanny” through
its own sustainability practices and its impact on the
actions of its huge network of suppliers.
 The Technological Environments

• Most dramatic force in 7 Futuristic Technological Advancements in the Retail Industry

changing the •Internet of Things. ...

•Facial recognition. ...
marketplace •Autonomous delivery robots and store assistants. ...
•Cashierless stores. ...
• New products, •Augmented Shopping. ...
opportunities •Voice Commerce. ...
•And of course, it's all underpinned by AI.
• Concern for the safety
of new products
 Vietnam Internet Statistics 2020

According to the
statistical report, there
are currently 68.17
million people using
internet services in
Vietnam in January
2020.

https://www.vnetwork.vn/en/news/thong-ke-internet-viet-nam-2020
 The Political-Social and Cultural
Environments
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
behaviour
 The Political-Social and Cultural
Environments
The Political and Social Environment
• Increased emphasis on ethics and socially responsible actions
• Cause-related marketing
 The Cultural Environments

The Cultural Environment

The cultural environment consists of institutions
and other forces that affect a society’s basic values,
perceptions, and behaviors.

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.
 The Cultural Environments

The Cultural Environment

Shifts in Secondary Cultural Values
• People’s views of themselves
• People’s views of others
• People’s views of organizations
• People’s views of society
• People’s views of nature
• People’s views of the universe
 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
References

KOTLER, P. and ARMSTRONG, G. (2018) Principles of Marketing, 17th edition. London: Prentice Hall.