Marketing Strategy and
Competitive Positioning
Seventh Edition
Part 2
Competitive market analysis
Chapter 3
The changing market
environment
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Learning Objectives
3.1 Describe the environmental forces that affect the
company’s ability to serve its customers.
3.2 Explain how changes in the demographic and economic
environments affect marketing decisions.
3.3 Identify the major trends in the firm’s natural and
technological environments.
3.4 Explain the key changes in the political and cultural
environments.
3.5 Discuss how companies can react to the marketing
environment.
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A Company’s Marketing Environment
The marketing environment includes the actors and forces
outside marketing that affect marketing management’s ability
to build and maintain successful relationships with target
customers.
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The Microenvironment and
Macroenvironment (2 of 2)
Macroenvironment consists of the larger societal forces
that affect the microenvironment—demographic, economic,
natural, technological, political, and cultural forces.
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The Macroenvironment
Figure 3.2 Major Forces in the Company’s
Macroenvironment
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Figure 3.3
The economic and political environment
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The Demographic and Economic
Environments
The Demographic Environment
• Demography is the study of human populations—size,
density, location, age, gender, race, occupation, and other
characteristics.
• Demographic environment involves people, and people
make up markets.
• Demographic trends include changing age and family
structures, geographic population shifts, educational
characteristics, and population diversity.
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The Demographic and Economic
Environments (2 of 8)
The Demographic Environment
• Baby Boomers – born between 1946 and 1964
• Generation X – born between 1965 and 1980
• Millennials – born between 1981 and 1996
• Generation Z – born between 1997 and 2012
• Generation Alpha – born after 2012
Generational marketing: Baby
boomers and millennials are now
moving over to make room for
younger Generation Alpha.
Shutterstock
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Figure 3.4
The social and cultural environment
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The Natural and Technological
Environments (3 of 4)
The Natural Environment
Environmental sustainability involves developing strategies and
practices that create a world economy that the planet can support
indefinitely.
The natural environment: At The
North Face, sustainability is about
more than just doing the right thing
—it also makes good business
sense. Sustainability efforts such as
its “Clothes the Loop” program are
good for the company, its
customers, and the planet.
G RO G L/Shutterstock
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The Microenvironment and
Macroenvironment (1 of 2)
Microenvironment consists of the actors close to the
company that affect its ability to serve its customers—the
company, suppliers, marketing intermediaries, customer
markets, competitors, and publics.
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The Microenvironment (1 of 8)
Figure 3.1 Actors in the Microenvironment
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The Microenvironment (2 of 8)
The Company
In designing marketing plans, marketing management takes
other company groups into account.
• Top management
• Finance
• Research and development (R&D)
• Information technology
• Purchasing
• Operations
• Human resources
• Accounting
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The Microenvironment (3 of 8)
Suppliers
• Provide the resources to
produce goods and services
• Treat as partners to provide
customer value
L’Oréal builds long-term supplier
relationships based on mutual
benefit and growth. It “wants to
make L’Oréal a top performer
aslysun/Shutterstock; G K Images/Alamy Stock
and one of the world’s most Photo
respected companies. Being
respected also means being
respected by our suppliers.”
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The Microenvironment (4 of 8)
Marketing Intermediaries
Marketing intermediaries are
firms that help the company to
promote, finance, sell, and
distribute its goods to final
buyers.
Partnering with intermediaries:
Coca-Cola provides its retail
partners with much more than
just soft drinks. It also pledges
powerful marketing support.
The Coca-Cola Company
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The Microenvironment (5 of 8)
Marketing Intermediaries
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries
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The Microenvironment (6 of 8)
Competitors
Firms must gain strategic advantage by positioning their offerings
strongly against competitors’ offerings in the minds of consumers.
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The Microenvironment (7 of 8)
Publics: The Home Depot
Publics
Foundation gives back to local
Any group that has an actual or communities through support for
potential interest in or impact on local nonprofits, grants, and
an organization’s ability to countless orange-shirted “Team
achieve its objectives Depot” employee volunteer hours. It
• Financial publics is committed to a culture of service
• Media publics that doesn’t stop at the checkout
• Government publics counter.
• Citizen-action publics
• Local publics
• General public
• Internal publics
Jim West/Alamy Stock Photo
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Figure 3.7
Five forces driving competition
Source: from Competitive Strategy: Techniques for Analyzing Industries and Competitors (by Michael E. Porter, 1998) Reprinted with the permission of Free Press, a division of
Simon & Schuster, Inc., Copyright © 1980, 1998 by The Free Press. All rights reserved.
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