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Principles of Marketing Video Library

Looking for additional video resources to integrate into your PowerPoint presentations?

The Principles of Marketing Video Library is a list of current news videos correlated to marketing topics. Updated regularly, these videos all have corresponding teaching notes with discussion questions.

For specially curated clips and teaching notes for Chapter 5, click here.

To explore all of our clips, click here.

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Chapter 5

Analyzing the Marketing Environment

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Learning Objectives:

5.1 Outline how customers, the company, competitors, corporate partners, and the physical environment affect marketing strategy.

5.2 Explain why marketers must consider their macroenvironment when they make decisions.

5.3 Describe various social trends that impact marketing.

5.4 Examine the technological advances that are influencing marketers.

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Understanding the Marketing Environment

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The Immediate Environment

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5.1 Outline how customers, the company, competitors, corporate partners, and the physical environment affect marketing strategy.

Because the Customer is at the center of all marketing efforts the entire business process must come from a?

Customers point of view

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Company Capabilities

Successful marketing firms focus on satisfying customer needs that match their core competencies.

Corning initially made its name by producing the glass enclosure to encase Thomas Edison’s lightbulb. But by successfully leveraging its core competency in glass manufacturing while also recognizing marketplace trends toward mobile devices, Corning shifted its focus.

Somchai Som/Shutterstock

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Company must be able to?

Focus on existing competencies as an opportunity to deliver new products to its customers

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Competitors

10'000 Hours/Getty Images

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Competitors: It’s critical to know competitors:

Strengths
Weaknesses
Likely reactions to marketing activities

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Corporate Partners

Unlike most outdoor clothing manufacturers that use synthetic, nonrenewable materials, Nau makes modern urban+outdoor apparel from renewable sources such as sustainably harvested eucalyptus and recycled plastic bottles. It was founded by a team of entrepreneurs who left companies such as Nike and Patagonia. To develop rugged and beautiful clothing from sustainable materials, these founders turned to manufacturing partners around the world to develop new fabrics that are performance-driven and technical.

(Left): Philipp Nemenz/Getty Images; (right): PeopleImages/Getty Images

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Corporate Partners are:

Parties that work with the focal firm

Few firms operate in isolation. For example, automobile manufacturers collaborate with suppliers of sheet metal, tire manufacturers, component part makers, unions, transport companies, and dealerships to produce and market their automobiles successfully. Parties that work with the focal firm are its corporate partners.

Consider an example that demonstrates the role these partners play and how they work with the firm to create a single, efficient manufacturing system. Unlike most outdoor clothing manufacturers that use synthetic, nonrenewable materials, Nau makes modern urban+outdoor apparel from renewable sources such as sustainably harvested eucalyptus and recycled plastic bottles. It was founded by a team of entrepreneurs who left companies such as Nike and Patagonia. To develop rugged and beautiful clothing from sustainable materials, these founders turned to manufacturing partners around the world to develop new fabrics that are performance-driven and technical.

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Physical Environment

Sustainable development: Includes land, water, air, and living organisms.

Physical environment examples include:

Energy trends
Deforestation
Green practices/marketing
Greenwashing

Caia Image / Image Source

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17 Global Goals of Sustainable Development

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From the United Nations, “Sustainable Development Goals: 17 Goals to Transform Our World,” Last Modified March 18, 2019. The content of this publication has not been approved by the United Nations and does not reflect the views of the United Nations or its officials or Member States. https://www.un.org/sustainabledevelopment/news/communications-material/.

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PROGRESS CHECK 1

What are the components of the immediate environment?
company’s capabilities
competitors
corporate partners
physical environment.

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5.2 Explain why marketers must consider their macroenvironment when they make decisions.

The Macroenvironment

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Identify and define the 6 components of the macro environment:

Culture
Demographics
Social
Technology
Economic
Political/legal

Macroenvironmental factors

have the following impacts on

the needs of marketing.

increase/decrease
create entirely new product

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Culture

Shared meanings, beliefs, morals, values, and customs of a group of people transmitted by words, literature, and institutions.

Country Culture

Sometimes best answer is to establish universal appeal within specific identities of country culture.

Regional Culture

For national and global chains, particularly important to cater to regional preferences.
McDonald’s – slightly different variations of staple menu.

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Demographics

Characteristics of the human population and segments, especially those used to identify consumer markets.

age
gender
income
education

Provides an easily understood snapshot of the typical consumer in a specific target market.

Marketers use data about consumers to target offers.

Shutterstock / astel design

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Exhibit 5.5: Generational Cohorts

Millennials and the Rise of the 'Experience Economy'

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Generational cohort	Gen α	Gen Z	Gen Y	Gen X	Baby Boomers
Range of birth years	2010–2025	1997–2009	1981–1996	1965–1980	1946–1964
Age in 2020	0–10	11–23	24–39	40–55	56–74

Consumers in a generational cohort—a group of people of the same generation—have similar purchase behaviors because they have shared experiences and are in the same stage of life. Applying age as a basis to identify consumers is quite useful to marketers, as long as it is used in conjunction with other consumer characteristics. Five major groups are described in the text: Gen α (also known as Generation Alpha), Gen Z (also known as Digital Natives), Gen Y (also called Millennials), Gen X, and Baby Boomers.

Group activity: Have students brainstorm a list of the defining characteristics of their generation.

Ask students: How does your generation differ from previous generations, such as you parents’? What macroenvironmental forces have had the most impact on your generation?

Technologies used by Generation Z are being developed and adopted at an unprecedented rate, creating novel marketing possibilities and channels, as Social & Mobile Marketing 5.1 What Can Pokémon Go Do for Marketers? details.

Video Link: https://www.youtube.com/watch?feature=player_embedded&v=YFN2vcBuGyQ

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Income

Purchasing power is tied to income.

Marketing opportunities exist across the broad range of income distribution.

SC Johnson targets the bottom of the income pyramid by selling pest control products in Ghana.

NNehring/iStock/Getty Images

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Income distribution in the United States has grown more polarized—the highest-income groups are growing, whereas many middle- and lower-income groups’ real purchasing power keeps declining. Although some marketers choose to target only affluent population segments, others have had great success delivering value to middle- and low-income earners. Consider, for example, SC Johnson, the parent company of many familiar household brands such as Glade, Ziploc, Windex, and Raid. SC Johnson has long been working at the bottom of the income pyramid; in the 1960s it began establishing locations in impoverished countries. Its most successful project has been in Ghana, where SC Johnson uses a direct-sales model and coaches to sell and teach customers about the benefits of pest control products and how to use them.

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Education

Education is related to income, which determines spending power.

Monkey Business Images/Shutterstock

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Gender

Male/female roles have been shifting.

Marketing has changed to reflect these shifts.

Firms may need to be careful about gender neutrality in positioning their products.

Gorodenkoff/Shutterstock

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Ethnicity

Approximately 80% of all population growth in the next 20 years is expected to come from minority communities

By 2030 the Hispanic population in the U.S. is expected to reach more than 72 million.

Image Source/Getty Images

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Macroenvironmental Factors

Available in BlackBoard

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5.3 Describe various social trends that impact marketing.

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List the 3 main social trends:

Sustainability
Health and wellness
Efficient utilization and distribution of food

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Sustainability

UN Sustainable Development Goals focus on social issues for basic needs.

Certifications from various agencies may be important.

pixelliebe/Shutterstock

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Health and Wellness

Child and adult obesity

New markets focused on healthy living

Mobile apps that support health and wellness

Shutterstock/Rawpixel.com

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Health concerns, especially those pertaining to children, are prevalent, critical, and widespread. In the past 20 years, child obesity has doubled, and teenage obesity tripled in the United States, leading to skyrocketing rates of high blood pressure, high cholesterol, early signs of heart disease, and type 2 diabetes among children. New advertising guidelines therefore require marketers to produce food in reasonably proportioned sizes. The advertising also cannot be aired during children’s programming, and companies cannot link unhealthy foods with cartoon and celebrity figures.

Consumers’ interest in improving their health has opened up several new markets and niches focused on healthy living. For example, consumer spending on yoga classes, mats, and clothing has increased consistently in recent years. Health and wellness concerns have also spurred a number of mobile apps, many of which help customers get or stay in shape by tracking exercise, calorie intake, and sleep cycles.

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Efficient Utilization and Distribution of Food

Diet-related Products

Reducing Hunger

Reducing Food Waste

Steve Cukrov / Alamy

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5.4 Examine the technological advances that are influencing marketers.

Technological Advances

List the 3 ways technology impacts marketing:

New products and services
New forms of communication
New retail channels

Growing importance of mobile devices

New cutting-edge technology:

Artificial Intelligence.
Robotics.
Internet of Things (IoT).
Privacy Concerns.

Pepper the robot is used in restaurants, hotels, and coffee shops.

Dani Metaz/Shutterstock

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Economic Situation

Affects the way consumers buy products and services and spend money.

Monitor the economic situation in home country and abroad.

Major factors to monitor:

Inflation.
Foreign currency fluctuations.
Interest rates.

Consumer Confidence Index

Customers formed in line to bank counter

Hiya Images/Corbis/Getty Images

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Political/Legal Environment

Comprises political parties, government organizations, and legislation and laws.

Firms must understand and comply with legislation regarding:

Fair competition.
Consumer protection.
Industry-specific regulation.

olegdudko © 123RF.com

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Exhibit 5.6: Consumer Protection Legislation 1

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Year	Law	Description
1906	Federal Food and Drug Act	Created the Food and Drug Administration (FDA); prohibited the manufacture or sale of adulterated or fraudulently labeled food and drug products.
1914	Federal Trade Commission Act	Established the Federal Trade Commission (FTC) to regulate unfair competitive practices and practices that deceive or are unfair to consumers.
1966	Fair Packaging and Labeling Act	Regulates packaging and labeling of consumer goods; requires manufacturers to state the contents of the package, who made it, and the amounts contained within.
1966	Child Protection Act	Prohibits the sale of harmful toys and components to children; sets the standard for child- resistant packaging.
1967	Federal Cigarette Labeling and Advertising Act	Requires cigarette packages to display this warning: “Warning: The Surgeon General Has Determined That Cigarette Smoking Is Dangerous to Your Health.”
1972	Consumer Product Safety Act	Created the Consumer Product Safety Commission (CPSC), which has the authority to regulate safety standards for consumer products.

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Exhibit 5.6: Consumer Protection Legislation 2

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Year	Law	Description
1990	Children’s Television Act	Limits the number of commercials shown during children’s programming.
1990	Nutrition Labeling and Education Act	Requires food manufacturers to display nutritional contents on product labels.
1995	Telemarketing Sales Rule	Regulates fraudulent activities conducted over the telephone. Violators are subject to fines and actions enforced by the FTC.
2003	Controlling the Assault of Non- Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act)	Prohibits misleading commercial e-mail, particularly misleading “subject” and “from” lines.
2003	Amendment to the Telemarketing Sales Rule	Establishes a National Do Not Call Registry, requiring telemarketers to abstain from calling consumers who opt to be placed on the list.
2003	Do Not Spam Law	Created to reduce spam or unwarranted e-mails.
2010	Financial Reform Law	Created the Consumer Financial Protection Bureau, whose aim is to enforce appropriate consumer-oriented regulations on a number of financial firms such as banks, mortgage businesses, and payday and student lenders. It also set up the Financial Services Oversight Council to act as an early warning system.

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Responding to the Environment

Implement strategies that respond to multiple environmental forces.

Marketers that succeed are the ones that respond quickly, accurately, and sensitively to consumers.

t_kimura/Getty Images

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PROGRESS CHECK 2

What are the six key macroeconomic factors?
culture
demographics
social trends
technological advances
economic situation
political/regulatory environment
Differentiate between country culture and regional culture.
Country culture is the entire country
Regional culture is based on the region or area within the country
What are some important social trends shaping consumer values and shopping behavior?
Sustainability
Health and wellness concerns
efficient utilization and distribution of food.

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Accessibility Content: Glossary

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Glossary-1

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Country culture involves visual nuances of a country’s culture such as artifacts, behavior, dress, symbols, physical settings, ceremonies, language differences, colors and tastes, and food preferences, as well as language.

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Glossary-2

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Culture is the shared meanings, beliefs, morals, values, and customs of a group of people.

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Glossary-3

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Demographics indicate the characteristics of human populations and segments, especially those used to identify consumer markets.

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Glossary-4

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A generational cohort is a group of people of the same generation—typically have similar purchase behaviors because they have shared experiences and are in the same stage of life.

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Glossary-5

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The political/regulatory environment comprises political parties, government organizations, and legislation and laws.

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Glossary-6

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Regional culture involves the region in which people live in a particular country.

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Chapter 5 - Text Alternative

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Ch 3: Why does Coca-Cola use influencer marketing on social media to drive marketing messages to a targeted audience?

Ch 10: How does big data and marketing analytics allow Amazon greater personalization?

Ch 16: How and why are retailers, like Walmart, increasing mobile and contactless channels?

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Exhibit 5.1: Understanding the Marketing Environment - Text Alternative

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The immediate environment of the consumers include physical environment, corporate partners, competitors, and company while the macroenvironment includes culture, demographics, social, technology, economic, political/legal and culture.

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17 Global Goals of Sustainable Development - Text Alternative

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The goals are given as follows:

1. no poverty

2. zero hunger

3. good health and well-being

4. quality education

5. gender equality

6. clean water and sanitation

7. affordable and clean energy

8. decent work and economic growth

9. industry, innovation and infrastructure

10. reduced inequalities

11. sustainable cities and communities

12. responsible consumption and production

13. climate action

14. life below water

15. life on land

16. peace, justice and strong institutions

17. partnerships for the goals

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