2

Marketing Management

The changing marketing environment

and information management
(conclusion)
The Marketing Environment
Macroenvironment

Demographic

Microenvironment Political
/Legal
Customers
Suppliers
Social
Cultural
Company

Distributors Ecological
Competitors / Physical
Economic

Technological

2
 The demographic environment
Diversity

Tchad Japan Ecuador

California Kuwait China

3
The demographic environment
Diversity

USA 4
The demographic environment
Diversity

USA 5
The demographic environment
Diversity

France 6
The demographic environment
Diversity

Guatemala 7
The demographic environment
Diversity

India 8
The demographic environment
Diversity

https://www.featureshoot.com/2017/07/dinnertime-looks-like-different-households/
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The socio-cultural environment

Socio-cultural environment consists of institutions and

other forces that affect society’s basic values,
beliefs and behaviors.
The social-cultural environment

Core beliefs and values - have a high degree of

persistence, are passed on from parents to children,
and are reinforced by major institutions (schools,
churches, businesses, government).

Secondary beliefs and values are more open to

change >> Marketing efforts can influence/model
secondary but hardly core beliefs and values.

Existence of subcultures - groups with shared values,

beliefs, preferences and behaviours (e.g. gamers,
cosplayers, hipsters… ).
 The social-cultural environment

Source: World Economic Forum, 2020

https://www.weforum.org/agenda/2020/11/values-graphic-care-behaviour-family-love-tradition-free-speech/
 The social-cultural environment

Source: World Economic Forum, 2020

https://www.weforum.org/agenda/2020/11/values-graphic-care-behaviour-family-love-tradition-free-speech/
The social-cultural environment
Major cultural values are expressed in people’s views:

◼ of Themselves
Ex:
• value more physical activity
• more interested in a healthy lifestyle
• more concerned about personal achievement

◼ of Others
Ex:
• feel it is important to help others, to contribute to the building of a
better society and value people for who they are
• concerned about poverty, the homeless, crime and victims and
other social problems
• feel a growing need of establishing serious, long-term
relationships and avoid strangers

◼ of Organizations
Ex:
• greater cynicism and mistrust
• higher demand for ethical and socially responsible behaviour
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The social-cultural environment
…people’s views:

◼ of Society
• Preservers (defend society)
• Makers (want to run it; high achievers – eat, dress and live well);
• Changers (want to change it; usually live more frugally and tend to be more thoughtful
consumers);
• Seekers (are looking for something deeper; a major market for films, music, surfing
and camping).

◼ of Nature and Universe

Ex:
• growing concern about the
fragility of the natural environment
and an increased interest in being
in harmony and experiencing the
nature;
• renewed interest in spirituality
Source: Euromonitor International – Voice of the Consumer Lifestyles Survey, 2023
The economic environment

Economic development Prices

Income distribution Salaries

Savings, debt and credit Cost of living

Economic environment
Industrial structure

• Subsistence
economies
• Raw material
exporting economies
• Industrialising
economies
• Industrial
economies
Economic environment
Economic Development
Economic environment
Economic Development
Economic environment
Economic Development
Emerging economies
Economic environment
Economic Development

https://worldpopulationreview.com/country-rankings/emerging-countries
Economic environment
Income distribution

• Income distribution patterns:

• (1) Very low incomes
• (2) Mostly low incomes
• (3) Very low, very high incomes
• (4) Low, medium, high incomes
• (5) Mostly premium incomes
Economic environment
Income distribution

Income inequality is the difference in how income is distributed

among the population.

Inequality is also described as

the gap between rich and
poor or the wealth gap.
This indicator is measured as a
Gini coefficient.

It ranges between 0 in the case

of “perfect equality” (that is,
each share of the population
gets the same share of income),
and 1 in the case of "perfect
inequality" (that is, all income
goes to the individual with the
highest income).
Source: OECD (2024), at https://www.oecd.org/en/data/indicators/income-inequality.html
Economic environment
Income distribution

The poverty rate is the ratio of the number of people

(in a given group) whose income is below the
poverty line (half the average household income of the
total population).

Portugal went from being from 8th to 12th in the

European countries with the highest risk of poverty
and social exclusion (Eurostat, 2023). The risk of
poverty and social exclusion dropped in Portugal in
2022 and the country is now below the EU average for
this indicator.

Though, at the end of 2022, 17%of Portuguese were

living below the poverty line (a slight increase of
0,6% in regard to 2021). Inequalities have increased,
specially in the Lisbon area, pointing out to a
worsening of urban poverty. The risk of poverty
increased for children and single-parent families (INE,
2023 cited in Público, 27 of November, 2023).

Source: OECD (2024)

The ecological and physical environment
Ecological and physical
environment involves the natural
resources that are needed as inputs
by marketers, or that are affected by
marketing activities.

Trends:
• Shortages of raw materials
• Increased pollution
• Increased government intervention
• Environmentally sustainable strategies
• Green marketing - involves creating
and selling products that minimize their
negative impact on the environment
throughout their entire lifecycle, from
production to disposal.
 The ecological and physical environment
Green marketing

University building in Hanoi, Vietname

“The project is a seven-storey modern and eco-
friendly building. The facade is designed in
checkerboard style (solid and opened squares) with
trees inside the openings. The roof is covered with
grass and big plants to create a refreshing space for
staff and protect the building from sunlight”.
The ecological and physical environment
 The technological environment
• Accelerating pace of change – shorter innovation cycles
• There are unlimited opportunities for innovation
• Growing use of the Internet, social networks, mobile applications; important
developments in medicine, pharmaceuticals and engineering; development of
information technologies - Big Data; important developments in Augmented
Reality and Artificial Intelligence;
• Varying R&D budgets
• Increased regulation of technological change
IKEA rolled out 'Place' , an app for
users to preview furniture in their
home before buying. Users can
resize the furniture, reposition it in
the virtual environments, and try
various patterns and color
combinations until they find the
right fit for their home. This is a “At L’Oréal, we know that people want to
great way to increase conversions interact with their mobiles—something that’s
by showing customers how their not a person—so we launched Makeup
products will look in the Genius, a mobile-first augmented reality
surroundings of their own home, (AR) tool that alleviates the need for
before buying. shoppers to even go in-store anymore”.
The technological environment

“Gross domestic spending on

research and development
(R&D) is the total expenditure on
R&D in a country.

R&D comprise work undertaken

on a systematic basis to increase
Portugal
the stock of knowledge, and the
1,68%
use of this knowledge to devise
new applications.
This indicator includes R&D
carried out by all resident
companies, research institutes,
university, and government
laboratories.

This indicator is measured as a

percentage of GDP” (OECD, 2024). Source: https://www.oecd.org/en/data/indicators/gross-domestic-
spending-on-r-d.html
The political-legal environment
Political and legal environment consists of laws,
government agencies and pressure groups that
influence and limit organisations and individuals.

Trends:
• Increase in business legislation
• to protect companies from unfair
competition
• to protect consumers from unfair
business, to protect the interests of
society from unbridle business
behavior
• to charge businesses with the social
costs of their products/production
processes
The political-legal environment

Trends (cont.):
• Growth of special interest groups (e.g.,
consumer’s rights, women’s rights, senior
citizen’s rights, minority rights)

• Consumerism movement –
organized movement of citizens
and government designed to
strengthen the rights of buyers

• Increasingly polarized
consumers - support brands
that align with their values;
purchases reflect the causes
they support; social responsibility
or political affiliation will motivate
spend.
Source: Euromonitor International , Top Global Consumer Trends 2024
The Microenvironment

Microenvironment consists of the actors close

to the company that affect its ability to serve
its customers, namely, the company,
customers, suppliers, marketing
intermediaries, competitors, and other
relevant publics.

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The company’s microenvironment

• Company [internal environment]

• Customers
• Competitors
• Suppliers
• Marketing intermediaries
• Other publics

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The company’s microenvironment

• Company
• Customers
• Competitors

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 The company - internal environment

Internal environment includes:

• Marketing resources(e.g., market research skills, product
innovation, effectiveness of the distribution network, customer
satisfaction index, brand awareness, brand image, market share)

• Financial resources (e.g., cost and availability of capital,

financial stability, profitability)

• Technological/Physical resources (e.g., quality of

the production facilities, technological competences, ability to take
advantage of economies of scale)

• Organizational/HR resources (e.g., visionary and

capable leadership, dedicated and qualified employees)

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Suppliers

◼ Provide the necessary resources to produce the

company’s products;
◼ Should be treated as key partners in the customer
value creation process.

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Marketing intermediaries

Marketing Intermediaries are all the independent

organizations that help to make the product available for
the final consumers or business users.

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 Marketing intermediaries
Intermediaries include:

• Merchants (resellers) – the distribution channel firms that buy, take title
to and resell the product
• Wholesalers
• Retailers

• Agents – the distribution channel firms that search for customers and may
negotiate on the company’s behalf, but do not take title of the products.
• Brokers
• Representatives and sales agents

• Facilitators - assist in the distribution process but neither negotiate nor take
title of the products.
• Transportation and warehousing companies
• Marketing services agencies (marketing research firms,
advertising/communication agencies, media agencies, and marketing
consulting firms)
• Financial intermediaries (banks, credit companies, insurance
companies, etc..)
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 Other publics

Any public that has an actual or potential interest in or impact on the

organisation’s ability to achieve its objectives.

◼ Media publics carry news, features, and editorial opinion — newspapers,

magazines, and radio and television stations
◼ Government publics influence product safety and truth in advertising
◼ Citizen-action publics include consumer organizations, environment
groups, and minority groups
◼ Local publics include neighborhood residents and community
organizations
◼ General publics influence the company’s public image
◼ Internal publics include workers, managers, volunteers, and directors

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Marketing Information System

Marketing Information System (MIS) consists of

people, equipment and procedures that are used to
gather, sort, analyze, evaluate and distribute
necessary, timely and accurate information to
marketing decision makers.

MIS relies on:

◼ internal company records
◼ marketing intelligence activities and marketing
research.

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Internal records

Marketing managers rely on internal reports of orders, sales,

prices, costs, inventory levels, etc., which are critical to spot
opportunities and problems.
Sources:
◼ The order-to-payment-cycle – Sales representatives, dealers and
customers send orders to the firm. The sales department prepares invoices,
transmits copies to various departments and back-orders out-of-stock items.
Shipped items generate shipping and billing documents that go to various
departments
◼ Sales information systems – timely and accurate reports on current
sales are key to understand and anticipate consumer behavior, manage
stocks in individual stores and effectively manage supply chain; however,
sales data should be carefully interpreted.

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Marketing Intelligence

A marketing intelligence system is a set of

procedures and sources managers use to obtain
everyday information about developments in the
marketing environment (happenings data).

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Marketing Intelligence
Information Sources:

• Marketing managers who collect marketing intelligence by:

- reading books, newspapers and trade publications
- talking to customers, suppliers and distributors
- monitoring social media
- and meeting with other company managers.

◼ Sales force reports about new developments (front-line people know

and observe customer behavior firsthand)

◼ Mystery shopping - market research technique where individuals,

known as mystery shoppers, are hired to pose as ordinary
customers and evaluate the quality of a company's products,
services, or customer interactions.
◼ Competition intelligence (e.g. purchase competitor products; read
competitor’s reports; collect competitor’s ads; talk with dealers,
distributors, suppliers)
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Marketing Intelligence

Information Sources (cont.):

◼ Customer advisory panels (e.g. alumni and recruiters)

◼ Relevant statistical data resources (e.g. EUROSTAT, INE,
PORDATA statistics)

◼ Information from outside suppliers (e.g. Market Research

organizations as Nielsen, Marktest)
◼ Online customer feedback about the company and the
competition (e.g. online customer forums, review boards, chatrooms
and blogs; customer complaint forums)

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Improving the quality of the Marketing intelligence
system

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Source: https://digiday.com/marketing/artificial-intelligence-influencing-unilevers-marketing/
Databases, data warehousing, data mining

The information gathered from the company’s internal records and from the
marketing intelligence system must be properly stored and managed in
order for the company to take advantage of the information obtained.

Databases, data warehousing and data mining may assist managers in

performing these tasks.

Database marketing Data warehousing

Data mining

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Database marketing

◼ Customer database is an organized collection of

comprehensive information about individual
customers/prospects that is current, accessible and
actionable for marketing purposes (e.g. names, addresses,
past transactions, demographic and psychographic characteristics;
which will allow to rank customers according to purchaser recency,
frequency and monetary value).

◼ Database marketing is the process of building,

maintaining and using customer databases and
other databases to contact, transact and build
customer relationship.

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Data warehousing and data mining

◼ Data are organized into a data warehouse, where

marketers can capture, inquire and analyze them to
draw inferences about individual customer needs and
responses.
◼ Through data mining marketers can extract useful
information about individuals, trends and segments
from the “mass” of data. Using sophisticated statistical
and mathematical techniques such as cluster analysis,
predictive modeling. Data mining is a process of
knowledge discovery and of converting this knowledge
into actionable information.

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Databases uses and advantages

• To identify the best prospects, contact them and turn them into
customers

• To decide which customers should receive a particular offer.

• To deepen customer loyalty (e.g., by sending appropriate gifts,

discount coupons and interesting reading material)

• To reactivate customer purchases (e.g., by sending birthday cards,

Christmas shopping reminders, or off-seasons promotions)

• To avoid serious customer mistakes (e.g., two different staff

members of a bank phoned the same mortgage customer offering a
home equity loan at different prices)

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