THE MARKETING ENVIRONMENT

MARKETING ENVIRONMENT:

A company’s marketing environment consists of the factors and forces outside marketing that affect a company’s
ability to build and maintain successful relationships with its target customers. The marketing environment offers
both opportunities and threats.

Marketing managers spend more time in the customer and competitor environments. Good marketers have two
special aptitudes for collecting information about the marketing environment.

a) marketing intelligence
b) marketing research

TYPES OF MARKETING ENVIRONMENT:

There are two types of marketing environment:

1. Micro-environment
2. Macro-environment

THE COMPANY’S MICROENVIRONMENT :

Marketing management’s job is to build relation- ships with customers by creating customer value and satisfaction.

COMPONENTS:

• the company
• suppliers
• market intermediaries
• customers
• publics

THE COMPANY:

Although, Top management sets the company’s mission, objectives, broad strategies, and policies but Under the
marketing concept, all managers, supervisors, and employees must “think consumer.” They should work in harmony
to provide superior customer value and satisfaction.

• FINANCE DEPARTMENT :(finding and using the funds required to carry out the marketing plan)
• ACCOUNTING DEPARTMENT : (measure revenues and costs to help marketing)
• HOUSEKEEPING (responsible for delivering clean rooms)

EXISTING COMPETITORS:

A company should monitor three variables when analyzing each of its competitors:

• SHARE OF MARKET : The competitor’s share of the target market

• SHARE OF MIND : The percentage of customers who named the competitor in responding to the statement,
“Name the first company that comes to mind in this industry.”
• SHARE OF HEART : The percentage of customers who named the competitor in responding to the statement,
“Name the company from whom you would prefer to buy the product.”

Every company faces four levels of competitors:

1. Same product-same market

2. Same product-different market
3. Same market-different product
4. Different product-different market
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SUPPLIERS:

Suppliers are firms and individuals that provide the resources needed by the company to produce its goods and
services. For instance, if their services will not reasonable and timely that will affect the production time and the
sales due to delayed process of production.

MARKETING INTERMEDIARIES :

Marketing intermediaries help the company promote, sell and distribute its goods to the final buyers. Intermediaries
are business firms that help hospitality companies find customers or make sales.

They include travel agents, wholesale tour operators, and hotel representatives, and online travel agencies (OTAs).

The Internet has created both DISINTERMEDIATION and pricing transparency. Disintermediation is the elimination of
intermediaries.

• MARKETING SERVICES AGENCIES: suppliers that help the firm formulate and implement its marketing strategy
and tactics. These suppliers include public relations agencies, advertising agencies, and direct mail houses
• FINANCIAL INTERMEDIARIES: include banks, credit companies, insurance companies, and other firms that help
hospitality companies finance their transactions or ensure the risks associated with the buying and selling of
goods and services

CUSTOMERS:

TYPES OF GENERAL CUSTOMER MARKETS :

1. Consumer markets: individuals and households

2. Business markets: hospitality services to facilitate their business
3. Government markets: made up of government agencies
4. international markets: consist of buyers in other countries

TYPES OF CUSTOMER :

1. Potential customer
2. New customer
3. Loyal customer

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

1. Financial publics
2. Media publics
3. Government publics
4. Citizen-action publics
5. Local publics
6. General public
7. Internal publics
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The Company’s Macroenvironment

Consists of all the forces that shape opportunities, but also pose threats to the company.

1. Competitive forces
2. Demographic forces
3. Economic forces
4. Natural forces
5. Technological forces
6. Political forces
7. Cultural force

COMPETITORS:
A company in the same industry or a similar industry which offers a similar product or service. The
presence of one or more competitors can reduce the prices of goods and services as the companies
attempt to gain a larger market share.
Barriers to Entry, Exit, and Competition:

• ENTRY: prevent firms from getting into a business

• EXIT: prevent them from leaving

DEMOGRAPHIC ENVIRONMENT:
DEMOGRAPHY is the study of human populations in terms of size, density, location, age, gender, race, occupation, and
other statistics. This is a very important factor to study for marketers and helps to divide the population into market
segments and target markets

example of demography is classifying groups of people according to the year they were born.

BABY BOOMERS

The post–World War II baby boom produced 78 million baby boomers, born be- tween 1946 and 1964. Today the
baby boomers have been one of the most powerful forces shaping the marketing environment, account for nearly
25 percent of the population and hold three-quarters of the nation’s financial assets. 70 percent of Americans
between the ages of 45 and 74 plan on working in their retirement years. This creates a new workforce for
quick-service restaurants and hotels.

The youngest boomers are now in their mid-forties; the oldest are in their sixties. The maturing boomers are
rethinking the purpose and value of their work, responsibilities, and relationships. the boomers constitute a
lucrative market for travel and entertainment, eating out, spas, and other leisure activities.

GENERATION X

The baby boom was followed by a “birth dearth,” creating another generation of 49 million people born between
1965 and 1976. Author Douglas Coupland calls them Generation X because they lie in the shadow of the boomers
and lack obvious distinguishing characteristics. Others call them the “baby busters” or the “generation caught in the
middle” (between the larger baby boomers and later Millennials).

The Generation Xers are defined as much by their shared experiences as by their age. Having grown up during times
of recession and corporate downsizing, they developed a more cautious economic outlook. They care about the
environment and respond favorably to socially responsible companies.

They seek success, they are less materialistic; they prize experience, not acquisition.
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MILLENNIALS :

Millennials (also called Generation Y or the echo boomers). Born between 1977 and 2000. these children of the baby
boomers’ number 83 million. This group includes several age cohorts: teens (13 to 19) and young adults (20 to 35).
With total purchasing power of more than $733 billion, Gen Y represents a huge and attractive market.

• One thing all of the Millennials have in common is their utter fluency and comfort with computer, digital,
and Internet technology.
• An article in Successful Meetings states that Generation Y likes com- fort food that is easy to eat while
walking. This would include macaroni and cheese in ceramic dishes, dim sum in takeout containers, and
burgers.

GENERATIONAL MARKETING:

marketers can segment by defining people by their birth date may be less effective than segmenting them by their
lifestyle, life stage, or the common values they seek in the products they buy.

INCREASING DIVERSITY:

Diverse groups from many nations and cultures have melted into a single, more homogeneous whole.

• Example: America

As the population in the United States grows more diverse, successful marketers will continue to diversify their
marketing programs to take advantage of opportunities in fast-growing segments.

THE CHANGING AMERICAN F AMILY:

Marketers must increasingly consider the special needs of nontraditional households because they are now growing
more rapidly than traditional households.

For example, people in their thirties who are marrying for the first time have gotten used to going out to eat
frequently. When they do have children, they continue to dine out, taking their children with them. Those in
households without children do not have the expense of children and have more discretionary income for dining and
travel.

GEOGRAPHIC SHIFTS IN POPULATION:

This is a period of great migratory movements between and within countries.

for example: America

U.S. population has shifted toward the Sunbelt states. The West and South have grown, whereas the Midwest and
Northeast have lost population.

• As companies look for new locations, they need to understand both national and local geographic trends
relating to shifting populations.

A BETTER EDUCATED, MORE WHITE-COLLAR, MORE PROFESSIONAL POPULATION :

The U.S. population is becoming better educated. The rising number of educated people will increase the demand
for quality products, including luxury hotels, travel, wine, and dining at restaurants that have interesting menus.

ECONOMIC ENVIRONMENT:
The economic environment consists of factors that affect consumer purchasing power and spending patterns.
Nations vary greatly in their levels and distribution of income.

CHANGES IN INCOME:

The income effect describes how the change in the price of a good can change the quantity that consumers will
demand of that good and related goods, based on how the price change affects their real income.
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THE GLOBAL ECONOMY:

International economic factors such as currency exchange rates, tariffs and shipping impact your costs and the prices
of your goods. ... Sometimes mass-produced goods cost less than locally-made custom products, and your marketing
strategy can price your products to achieve wide acceptance.

NATURAL ENVIRONMENT:
The natural environment involves the natural re- sources that are needed as inputs by marketers or that are affected
by marketing activities.

ENVIRONMENTAL CONCERNS:

• air and water pollution

• growing shortages of raw materials
• Nonrenewable resources

The natural environment consists of many amenities that attract tourists, such as forests, clean beaches, pristine
streams, wildlife, and clean air.

Today companies are developing environmentally sustainable strategies and practices in an effort to create a world
economy that the planet can support indefinitely. They are responding to consumer demands with more
environmentally responsible products.

TECHNOLOGICAL ENVIRONMENT:

The most dramatic force shaping our destiny is technology, which has given us wireless access to the Internet. This
has made it possible for individuals to have interactions with others involving both audio and visual connections
using programs.

Many organizations now accept a document that has been signed, scanned, and e-mailed instead of a hard copy of
the original document. The end result is that speed at which business is occurring has increased dramatically.

POLITICAL ENVIRONMENT:
The political environment is made up of laws, government agencies, and pressure groups that influence and limit the
activities of various organizations and individuals in society.

INCREASED LEGISLATION AND REGULATION AFFECTING BUSINESS :

As products become more complex, public concern about their safety increases. Governmental agencies have
become involved in the investigation and regulation of everything from fire codes to food-handling practices.

Legislation and regulation affecting business have been enacted for three reasons.

1. protects companies from each other

2. protecting consumers from unfair business practices
3. to protect society’s interests against un- restrained business behavior

Regulation aims to make firms responsible for the social as well as private costs of their production and distribution
activities.

SOCIALLY RESPONSIBLE BEHAVIOR:

Enlightened companies encourage their managers to look beyond what the regulatory system allows and simply “do
the right thing.” These socially responsible firms actively seek out ways to protect the long-run interests of their
consumers and the environment.

CAUSE RELATED MARKETING :

To exercise their social responsibility and build more positive images, many companies are now linking themselves to
worthwhile causes. Cause-related marketing has become a primary form of corporate giving.
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CULTURAL ENVIRONMENT:
The cultural environment includes institutions and other forces that affect society’s basic values, perceptions,
preferences, and behaviors. As a collective entity, a society shapes the basic beliefs and values of its members.

PERSISTENCE OF CULTURAL VALUES:

People in any society hold certain persisting core beliefs and values. Marketing always exists in an environment
shaped by culture. Organizations that intend to market products in different countries must be sensitive to the
cultural factors at work in their target markets.

Such as language, beliefs etc.

SUBCULTURES:

Each society contains subcultures, groups of people with shared value systems based on common life experiences or
situations, whose members share common beliefs, preferences, and behaviors.

• subcultural groups have specific wants and buying behavior, marketers can choose subcultures as their
target markets.