• Last week's article

• Marketing environment: “Actors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers.”

• Micronenvironment:
  • Marketing environment close to the company.
  • The company, suppliers, marketing intermediaries, customer markets, competitors, publics.
• Macroenvironment:
  • Larger marketing environment.
  • Demographic, economic, natural, technological, political, cultural forces.

• Success depends upon working with the company, suppliers, marketing intermediaries, customers, competitors, and publics.
  • These groups make up company's value delivery network.

Must take other groups within company into account:

• Top mgmt
• Finance
• R&D
• Purchasing
• Operations
• Accounting

These other groups all impact marketing's decisions through their input into product delivery.

• Supplier problems seriously affect marketing.
• Must watch availability.
• Supply problems can damage satisfaction in long run.

Intermediaries are firms that help promote, sell, and distribute goods to final buyers. There are four types:

1. Resellers
   • Distribution channel firms.
   • Help find customers and make sales to them.
   • Large resellers have power to dictate terms and shut products out of markets.
2. Physical Distribution Firms
   • Help company stock and move goods.
   • Determine best ways to ship, store.
3. Marketing Services
   • Marketing research, advertising agencies, media firms, marketing consultants.
   • Help target & promote products to the right markets.
4. Financial Intermediaries
   • Banks, credit companies, insurance co., etc.
   • Help finance transactions or insure against risks.

Marketing must partner carefully with marketing intermediaries to ensure top performance.

• Study 5 types of customer markets closely.
  • Consumer markets – end users.
  • Business markets – purchase for further processing or use in production.
  • Reseller markets – purchase for resale at profit.
  • Government markets – purchase for public services.
  • International markets – these markets in other countries.

• Position offerings stronger than competitors' in minds of consumers.
• Consider size & position vs. competitors.

Public: A group that has an actual or potential interest in or impact on an org's ability to achieve objectives.

Seven types of publics:

• Financial:
  • Banks, investment houses, stockholders.
  • Influence ability to obtain funds.
• Media:
  • Newspapers, magazines, etc.
  • Carry ads, news, editorial opinion.
• Gov't:
  • Must take gov't developments into consideration.
  • Product safety, truth in ads, etc.
• Citizen-action:
  • Consumer orgs, enviro-groups, minority groups.
  • Marketing decisions may be questioned by groups.
• Local:
  • Neighborhood residents, community groups.
  • Contribute to these orgs.
• General public:
  • Public's image of co. affects buying.
• Internal:
  • Workers, managers, volunteers, board of directors.
  • When employees feel good about co., feeling spreads externally.

Macroenvironment includes larger forces that create opportunities and pose threats to company.

Demography: “The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.

• Growing global population means growing needs to satisfy.
  • May also mean growing market opportunities.

• Most important demographic trend.
• Biggest groups include baby boomers, gen X, gen Y.

• Post WWII, 78M people born between 1946-64.
• 28% of today's population.
• Earn > half of all personal income.
• Aging boomers create good market for:
  • Housing
  • Remodeling
  • Financial services
  • Travel/entertainment
  • Eating out
  • Health/fitness
  • Luxury cars/other luxuries

• More cautious economic outlook.
• Cynical of easy success promises.
• Respond to honesty in advertising.
• Will overtake boomers by 2010 as primary market.

• Currently teenagers.
• Created large kid/teen markets.
• Fluent with computer technology.

• 32% of households are nonfamily.
• Blah blah stupid people.

• Telecommuting on the rise.

• Rising number of educated people.
• Increasing demand for quality products, books, magazines, travel, personal computers.
• Also more white-collar workforce.

• US “salad bowl.”

Economic environment: Factors that affect consumer buying power and spending patterns.

• Substinence economy: Country consumes most of its own agricultural and industrial output. (Few market opportunities.)
• Industrial economy: Creates many market opportunities.

• People are spending more carefully, focused on greater value.
• Marketers look for ways to offer greater value – perfect combination of quality, good service, fair price.
• Pay attention to income distribution.
  • Upper-class consumers:
    • Spending not affected by economic conditions.
    • Major market for luxury items.
  • Middle-class:
    • Somewhat careful about spending.
    • Affords luxury sometimes.
  • Working class:
    • Sticks close to basics.
    • Tries hard to save.
  • Under class:
    • Welfare.

People's spending patterns shift slightly as income increases.

• Decreased food.
• Decreased utilities.
• Increased entertainment.
• Increased insurance.
• Increased most things.

Natural environment: Natural resources that are needed as inputs by marketers or are affected by marketing activities.

Marketers should be aware of several trends:

• Shortage of raw materials.
• Increased population.
• Increased gov't intervention in natural resource management.

Technological environment: Forces that create new technologies, products, and market opportunities.

• New technologies replace older ones.
• Companies that do not keep up will find their products replaced.
• Gov't agencies investigate and ban unsafe products.

Political environment: Laws, gov't agencies, and pressure groups that influence various orgs and individuals in a society.