Analyzing

the Marke0ng
Environment
Chapter 4

The marketing environment consists of

forces outside marketing that affect the
ability to build and maintain successful
relationships with customers. It can be
divided into:
the micro environment
and
the macro environment

The Marketing Environment

Microenvironment:
Consists of actors close to the company that
affect its ability to serve its customers
Suppliers, customers, competitors, the public,
marketing intermediaries, and the company itself

Macroenvironment:
Consists of larger societal forces that affect
the microenvironment
Demographic, economic, technological, political,
natural, and cultural forces

The Marketing Environment

Microenvironment:
Consists of actors close to the company that
affect its ability to serve its customers
Suppliers, customers, competitors, the public,
marketing intermediaries, and the company itself

Macroenvironment:
Consists of larger societal forces that affect
the microenvironment
Demographic, economic, technological, political,
natural, and cultural forces

The Marketing Environment

Publics

Company

Compe0tors

Customer

Intermediaries

Micro-
environemnt

Suppliers

The Marketing Environment

Publics

Company

Compe0tors

Customer

Intermediaries

Micro-
environemnt

Suppliers

The Microenvironment
Customers:
Companies may target any or all of the types
of markets, including:
Consumer
Business
Reseller
Government
International

The Marketing Environment

Publics

Company

Compe0tors

Customer

Intermediaries

Micro-
environemnt

Suppliers

The Microenvironment
Competitors:
Marketers must seek to gain strategic
advantage against competitive organizations
Size of firm and industry position will influence
choice of strategy when competing in the
marketplace

The Marketing Environment

Publics

Company

Compe0tors

Customer

Intermediaries

Micro-
environemnt

Suppliers

The Microenvironment
Publics:
Any group that has an actual or potential
interest in or impact on an organizations
ability to achieve its objectives
Seven types of publics:
Financial Publics

Local / Community Organizations

Media
Government
Citizen-action

General
Internal

The Marketing Environment

Publics

Company

Compe0tors

Customer

Intermediaries

Micro-
environemnt

Suppliers

The Microenvironment
The Company:
Involves groups such as top management,
finance, R&D, purchasing, operations,
accounting
Affects the marketing departments planning
strategies
All departments must think consumer and
work together to provide superior customer
value and satisfaction

The Marketing Environment

Publics

Company

Compe0tors

Customer

Intermediaries

Micro-
environemnt

Suppliers

The Microenvironment
Marketing intermediaries:
Help the company to promote, sell, and
distribute its goods to final buyers
Resellers
Physical distribution firms
Marketing services agencies

The Marketing Environment

Publics

Company

Compe0tors

Customer

Intermediaries

Micro-
environemnt

Suppliers

The Microenvironment
Suppliers:
Provide resources needed to produce goods
and services
Important link in the overall customer value
delivery system!

Most marketers treat suppliers like partners in

creating and delivering customer value

The Marketing Environment

Cultural

Technological

Economic

Demographic

Poli0cal

Macro-
environemnt

Natural

The Marketing Environment

Cultural

Technological

Economic

Demographic

Poli0cal

Macro-
environemnt

Natural

Demographic Environment
Demography:
The study of human populations in terms of
size, density, location, age, gender, race,
occupation, and other statistics
Marketers track changing age and family
structures, geographic population shifts,
educational characteristics, and population
diversity

Demographic Environment
The changing age structure of the
Canadian population is the most important
demographic trend
The three largest generational groups are:
Baby Boomers
Generation X
Millennials or Generation Y

3 Largest Genera0onal Groups

Baby Boomers

Genera0on X

Genera0on Y/
Millennials

Born
between 47
and 66

Born
between 67
and 76

Born
between 77
and 00

Demographic Environment
The Canadian family and household are
changing:
Growing crowded nest syndrome
Fewer families have children
Average Canadian household shrank to 2.5
people
More dual-income families

Needs of non-traditional households

must be considered by marketers

Demographic Environment
Geographic shifts in population:
Rural to urban (city, suburb) migration
continues
People in different regions buy differently
Shift in where people live is changing how
they work

Demographic Environment
Increasing diversity:
16% of Canadians consider themselves
visible minorities
This group is growing fast and has huge
purchasing power
Marketers target specially designed ads, products,
and promotions at ethnic groups

The Marketing Environment

Cultural

Technological

Economic

Demographic

Poli0cal

Macro-
environemnt

Natural

Economic Environment
Consists of factors that affect consumer
purchasing power and spending patterns
Changes in income and spending
Recent years: consumption frenzy, record debt
Economic crisis leading to consumer frugality
Value marketing is key to success

Economic Environment
Consists of factors that affect consumer
purchasing power and spending patterns
Changes in spending patterns
Engels laws note that consumers at different
income levels have different spending patterns

The Marketing Environment

Cultural

Technological

Economic

Demographic

Poli0cal

Macro-
environemnt

Natural

Cultural Environment
The institutions and other forces that affect
a societys basic values, perceptions,
preferences, and behaviors
Core beliefs are passed on from parents to
children and reinforced by schools, churches,
businesses, and government
Secondary beliefs and values are more open
to change
Marketers may be able to change secondary
beliefs, but not core beliefs

The Marketing Environment

Cultural

Technological

Economic

Demographic

Poli0cal

Macro-
environemnt

Natural

Technological Environment
Technology changes rapidly
Creating new markets and opportunities
Increases obsolescence of products

Challenge is to make practical, affordable

new products
Government bans unsafe products and
sets safety standards
Regulations result in higher research costs,
and longer time to market for new products

The Marketing Environment

Cultural

Technological

Economic

Demographic

Poli0cal

Macro-
environemnt

Natural

Political Environment
Includes laws, government agencies, and
pressure groups that influence or limit
organizations and individuals
Marketing activities face:
Increasing legislation
Changing government agency enforcement
Increased emphasis on ethics and socially
responsible behavior

The Marketing Environment

Cultural

Technological

Economic

Demographic

Poli0cal

Macro-
environemnt

Natural

Natural Environment
Natural resources are needed as inputs by
marketers and are affected by marketing
Key trends include:
Shortage of raw materials
Increased pollution
Increased government intervention

Many firms focus on creating

environmentally-sustainable strategies

Questions?

Marke0ng Research and

Informa0on
Chapter 5

Marketing Information
To build and maintain profitable
relationships with customers, companies
need information about :
Customers needs
Marketing environment
Competition

To make decisions, marketing managers

need information that provides true
customer insights

Customer Insights
Customer insights:
Fresh understanding of customers and the
marketplace derived from marketing
information that become the basis for creating
customer value and relationships
Used to develop competitive advantage
Customer insight teams are replacing traditional
market research departments

Marketing Information System

To gain customer insights, you need
systems to give managers relevant
information, in the right form, and at the
right time
This is known as Marketing Information
System (MIS):
Therefore, an MIS helps managers to:
Assess information needs
Develop needed information
Analyze and use information

Assessing Information Needs

A good MIS balances what information
users (marketers) want against what they
need and what is feasible to offer
Sometimes the company cannot provide the
needed information because it is not available
or due to MIS limitations
MIS efforts are costly; firms must decide if the
value of insights gained from more information
is worth the cost

Assessing Information Needs

Managers do not always know the right
questions to ask; MIS helps to make sure
relevant information is not overlooked
Ex: not all managers know to monitor word of
web

Developing Marketing Information

Once the MIS has determined the
information needs, the information must be
obtained in one of 3 ways:
Internal Data
Marketing Intelligence
Marketing Research

Internal Databases
Internal databases are electronic
collections of consumer and market
information obtained from data sources
within the company network (e.g.
customer databases)
Include information on demographics, sales
transactions, website visits

Marketing Intelligence
Competitive marketing intelligence: a
collection and analysis of publicly available
information about consumers, competitors,
and developments in the marketing
environment
For example: annual reports; brand discussions on
blogs or social media, the census
Marketing intelligence can help a marketer
understand what customers say about their brand

Market Research
Market research is the systematic design,
collection, analysis and reporting of
relevant data for specific situations
Gives insight into:
Customer motivations
Customer purchase behavior
Customer satisfaction

Market Research
Market research occurs in 4 Stages:
Identifying the Problem and Research
Objectives
Planning and Developing the Research
Collecting and Analyzing Data
Interpreting and Reporting Findings

Defining the Problem

and Objectives
This can be the most difficult step
Research objectives may include:
Exploratory research:
Descriptive research:
Causal research:

Developing the
Research Plan
The research plan outlines:
Sources of data (primary vs. secondary)
Specific research approaches
Contact methods and sampling plans
Instruments for data collection

Present research plan in a written proposal

Gathering Secondary
Data
Secondary data:
Information that already exists somewhere
which has been collected for another purpose
Common sources of secondary data:
Internal databases
Commercial data services
Government sources (Stats Canada, the Census)

Secondary Data
Advantages of secondary data:
Available more quickly and cheaper than
primary data
Can provide data individual firm cannot collect
on its own

Disadvantages of secondary data:

Needed information may not exist
Information may not be usable; must evaluate
relevancy, accuracy, currency, and impartiality

Primary Data
Collection
Secondary data rarely provides all
necessary information, requiring firms to
collect primary data
Primary data:
Consists of information collected for the
specific purpose at hand
Must be relevant, accurate, current, and
unbiased

Observational
Research
Gathering primary data by observing
relevant people, actions, and situations
Obtains information that people are unwilling
or unable to provide
Best method for exploratory research

Observational
Research
Limitations:
Cannot observe feelings, attitudes, motives,
or long-term or infrequent behavior
May not be possible to observe long-term or
infrequent behavior
Ethnographic research yields richer
understanding of consumers:
Trained observers watch and interact with
consumers in their natural habitat

Observational
Research
Ethnographic Research:
A form of observational research in which
trained observers watch and interact with
consumers in their natural habitat
Yields richer understanding of consumers
allows companies to zero in on their customers
unarticulated desires

Survey Research
Survey research:
Gathers primary data by asking people
questions about their knowledge, attitudes,
preferences, and buying behavior
Most widely used method for primary data
collection
Best method for gathering descriptive
information
Can ask directly about attitudes, expectations etc

Experimental
Research
Experimental research:
Gathers primary data by selecting matched
groups of subjects, giving them different
treatments, controlling related factors, and
checking for differences in group responses
Best method for explaining cause-and-effect
(causal) relationships

Sampling Plan
Sample:
Segment of the population selected to
represent the population as a whole

Need to determine:
Who to survey (sampling unit)
How many people to survey (sample size)
How to chose the people in the sample
(sampling procedure)

Research
Instruments
Questionnaire decisions:
What questions to ask
Form of each question; closed or open-end
Wording and ordering of questions

Mechanical instruments:
Monitor consumer behaviour
Includes people metres, checkout scanners,
eye tracking devices, neuro marketing

Implementing the
Research Plan
Collecting the data:
Most expensive phase
Subject to error

Processing the data:

Check for accuracy
Code for analysis

Analyzing the data:

Tabulate results
Compute statistical measures

Interpreting and
Reporting Findings
Interpret the findings
Draw conclusions
Report to management:
Present findings and conclusions that will be
most helpful to decision making

Analyzing and Using Marketing

Information
What is the best way to analyze and use
individual customer data?
One popular method is Customer
Relationship Management (CRM)

 Customer Relationship Management :

Sophisticated software and analytical tools
that integrate customer information from all
sources, analyze it in depth, and apply the
results to maximize customer loyalty
Provide best offers based on a customers use
of products or services
Pinpoint and target high-value customers

 Customer Relationship Management:

Ideally, companies capture information at
every possible touch point or contact
between the customer and company:
Customer purchases
Sales force contracts
Service calls
Website visits

 Many companies utilize CRM:

Captures and analyzes information from all
customer sources
Applies the results to build stronger
relationships
Use data warehouses and data mining
techniques
Findings may lead to new marketing
opportunities