Copyright 2005 Pearson Education Inc.

The Marketing Environment

Chapter 5
PowerPoint slides
Express version

Instructor name
Course name
School name
Date

Principles of Marketing, Sixth Canadian Edition

Learning Objectives

5.2

Copyright 2005 Pearson Education Inc.

After studying this chapter, you should be able to:

Describe the environmental forces that affect the companys
ability to serve its customers
Explain how changes in the demographic and economic
environments affect marketing decisions
Identify the major trends in the
firms natural and technological
environments
Explain the key changes in the
political and cultural environments
Discuss how companies can react to
the marketing environment

Principles of Marketing, Sixth Canadian

The Marketing Environment

5.3

Copyright 2005 Pearson Education Inc.

Marketing environment:
Factors and forces outside of marketings direct control
Affect managements ability to develop and maintain
Successful transactions with target customers

Microenviroment:
Forces close to the company
That affect its ability to serve
customers

Macroenvironment:
Larger, societal forces that affect the
organizations microenvironment

Principles of Marketing, Sixth Canadian

The Companys Microenvironment

5.4

Copyright 2005 Pearson Education Inc.

The company:
Management, finance, research & development, purchasing,
manufacturing, accounting, and human resources

Suppliers
Marketing intermediaries:
Resellers
Physical distribution
firms
Marketing service
agencies
Financial
intermediaries

Figure 5.1

Principles of Marketing, Sixth Canadian

The Companys Microenvironment

5.5

Copyright 2005 Pearson Education Inc.

Customers:
Consumer, business, reseller, government, and international
markets

Competitors
Publics:

Financial
Media
Government
Citizen-action groups
Local
General
Internal

Figure 5.1

Principles of Marketing, Sixth Canadian

5.6

The Companys Macroenvironment

Copyright 2005 Pearson Education Inc.

Demographic environment:
Study of human population
Size, density, location, age, race, sex, occupation, and education

Trends of interest:
World population
growth
Increased diversity
Changing age
structure within
Canada
Changing households
Higher education
Geographic shifts

Figure 5.2

Principles of Marketing, Sixth Canadian

5.7

The Companys Macroenvironment

Economic environment:
Copyright 2005 Pearson Education Inc.

Factors that affect consumer buying power and spending patterns

Trends of interest:
Changes in income, continued spending by consumers
Consumer debt levels
rising, savings down
Changing spending
patterns

Figure 5.2

Engels laws: amount

spent on various
categories changes as
income rises

Principles of Marketing, Sixth Canadian

The Companys Macroenvironment

5.8

Copyright 2005 Pearson Education Inc.

Natural environment:

Growing shortages of raw materials

Increased pollution
Increased government intervention
Canadian federal law:
Environmental
Protection Act (1989)
Green movement
Focus on
environmental
sustainability
strategies

Figure 5.2

Principles of Marketing, Sixth Canadian

The Companys Macroenvironment

5.9

Copyright 2005 Pearson Education Inc.

Technological environment:

New technology creates new markets and opportunities

Replaces existing products and services
Research and development activity drives this sector
Canadian spending on
R&D is low, ranked
15th in the world
Government programs
to encourage more
Government agencies
to regulate new
product safety

Figure 5.2

Principles of Marketing, Sixth Canadian

The Companys Macroenvironment

5.
10

Copyright 2005 Pearson Education Inc.

Political environment:

Laws, government agencies, and pressure groups

Influence and limit organizations and individuals within a society
Increasing legislation
Increased emphasis on
Figure 5.2
ethics and social
responsibility
Cause-related
marketing
Business legislation is
used to protect
consumers, businesses,
and the interests of
society

Principles of Marketing, Sixth Canadian

The Companys Macroenvironment

5.
11

Copyright 2005 Pearson Education Inc.

Cultural environment:

Institutions and other forces that influence

Societys basic values, perceptions, preferences, and behaviours
Core beliefs passed on through family, reinforced by institutions
Secondary beliefs are
Figure 5.2
more open to change
Peoples views of:

Themselves
Others
Organizations
Society
Nature
The universe

Principles of Marketing, Sixth Canadian

Responding to the Marketing Environment

5.
12

Copyright 2005 Pearson Education Inc.

Passive approach:
Companies react to uncontrollable factors within their
environments

Environmental management
perspective:
Proactive approach to influence and
affect forces within their environment
Use lobbyists to influence legislation
Media events, advertorials to shape
public opinion
Use contractual agreements and legal
action when necessary

Principles of Marketing, Sixth Canadian

In Conclusion

5.
13

Copyright 2005 Pearson Education Inc.

The learning objectives for this chapter were:

Describe the environmental forces that affect the companys
ability to serve its customers
Explain how changes in the demographic and economic
environments affect marketing decisions
Identify the major trends in the
firms natural and technological
environments
Explain the key changes in the
political and cultural environments
Discuss how companies can react to
the marketing environment

Principles of Marketing, Sixth Canadian