Use Key Terms Natural Environment and Environmental Sustainability here.
Use Chapter Objective 3 here.
Use Discussion Question 3-4 here.
The Technological Environment
The technological environment is the most dramatic force now shaping our destiny.
Use Key Term Technological Environment here.
Use Online, Social Media, and Mobile Marketing here.
Technology has released such wonders as antibiotics, robotic surgery, miniaturized electronics,
laptop computers, and the Internet.
New technologies create new markets and opportunities; however, every new technology
replaces an old technology.
Political and Social Environment
The political environment consists of laws, government agencies, and pressure groups that
influence or limit various organizations and individuals in a given society.
Use Key Term Political Environment here.
Use Chapter Objective 4 here.
Use Critical Thinking Exercise 3-6 here.
Legislation Regulating Business
Governments develop public policy to guide commerce.
Legislation affecting business around the world has increased steadily over the years.
Business legislation has been enacted for a number of reasons.
1. To protect companies from each other.
2. To protect consumers from unfair business practices.
3. To protect the interests of society against unrestrained business behavior.
Because government agencies have discretion in enforcing laws, they can have an impact on a
company’s marketing performance.
Use Table 3.1 here.
Increased Emphasis on Ethics and Socially Responsible Actions
Socially Responsible Behavior. Enlightened companies encourage their managers to “do the
right thing.”
The boom in online, mobile, and social media marketing has created a new set of social and
ethical issues.
Use Marketing at Work 3.1 here.
Use Marketing Ethics here.
Cause-Related Marketing. Many companies are now linking themselves to worthwhile causes.
Cause-related marketing has stirred some controversy.
Cultural Environment
Use Key Term Cultural Environment here.
Use Critical Thinking Exercise 3-8 here.
The cultural environment is made up of institutions and other forces that affect a society’s basic
values, perceptions, preferences, and behaviors.
Persistence of Cultural Values
Core beliefs and values are passed on from parents to children and are reinforced by schools,
churches, businesses, and government.
Secondary beliefs and values are more open to change.
Shifts in Secondary Cultural Values
Marketers want to predict cultural shifts in order to spot new opportunities or threats.
People’s Views of Themselves
People vary in their emphasis on serving themselves versus serving others.
People use products, brands, and services as a means of self-expression.
People’s Views of Others
Shifts in people’s attitudes toward and interactions with others have been noted.
Trend trackers see “mass mingling”—people are using online social media and mobile
communications to connect more than ever.
People’s Views of Organizations
People are willing to work for major organizations and expect them to carry out society’s work.
Many people see work as a required chore to earn money to enjoy their non-work hours.
People’s Views of Society
People vary in their attitudes toward their society.
People’s Views of Nature
Recently, people have recognized that nature is finite and fragile, that it can be destroyed by
human activities.
The U.S. organic-food market generated $53.5 billion in sales last year, more than doubling over
the last five years.
People’s Views of the Universe
Religious conviction and practice have been dropping off gradually through the years.
33 percent of Americans (between 18 and 29 years of age) say they are not affiliated with any
particular faith.
Use Discussion Question 3-5 here.
RESPONDING TO THE MARKETING ENVIRONMENT
Many companies think the marketing environment is an uncontrollable element to which they
have to adapt.
Other companies take a proactive rather than reactive approach to the marketing environment.
Use Chapter Objective 5 here.
Use Marketing at Work 3.2 here.
Use Discussion Question 3-6 here.
Video Case: Burger King
In the fast-food burgers business, french fries are perhaps more important than the burgers
themselves. System-wide, Burger King sells 56 million orders of french fries every month—one
order of fries for every two customers. But nothing is exempt from the impact of marketing
environment forces. As health trends drove some companies to cut back on fatty foods, Burger
King saw its french fry sales dip.
So Burger King decided to let people have their fries and eat them to. To bring health-conscious
customers back to the counter, Burger King introduced Satisfries—french fries with 30 percent
less fat and 20 percent fewer calories than its regular fries. In a product category that has seen
little if any innovation, Satisfries could be a big game changer. Still, reduced fat and calories may
not be enough to make a difference to health-food lovers. And at 30 to 40 cents more per item,
Satisfries may end up as little more than a fry fiasco.
After viewing the video featuring Burger King, answer the following questions:
3-15. Considering marketing environment forces, describe how Burger King went about
developing its new Satisfries.
3-16. With Satisfries, has Burger King truly created customer value, or is it just chasing trends?
Explain.
Company Cases
3 Sony / 7 Target / 9 Coach
See Appendix 1 for cases appropriate for this chapter.
Case 3, Sony: Battling the Marketing Environment’s “Perfect Storm.” The many forces of
the marketing environment have converged to take Sony from the global leader in consumer
electronics to a company that is struggling to remain relevant.
Case 7, Target: Where Store Brands Offer More Than Low Prices. In addition to carrying
popular national brands, Target caters to current trends in consumer desire by building a portfolio
of store brands.
Case 9, Coach: Riding the Wave of Premium Pricing. Coach grew from a premium niche
brand into a $5 billion powerhouse by pursuing popular trends of selling through outlet stores at
a discount. But such tactics are taking a toll.
MyMarketingLab
If assigned by your instructor, complete these writing sections from your Assignments in the
MyLab.
3-17. What is environmental sustainability and why has it grown in importance for marketers?
(AACSB: Communication)
3-18. Discuss a recent change in the technological environment that impacts marketing. How
has it affected buyer behavior and how has it changed marketing? (AACSB: Written and
Oral Communication; Reflective Thinking)
GREAT IDEAS
Barriers to Effective Learning
1. This is an intense chapter, and it presents a whole lot of information that might make
some students’ heads swim. If it hasn’t happened before, this is where students really begin to get
the picture that marketing managers need to be very analytical. Presenting the in-depth
discussion of current macro trends as something that needs to be understood but not memorized
helps.
2. Students will also be anxious about how a marketing manager successfully tracks these
kinds of forces. Explaining the use of purchased marketing and economic reports, and what
market researchers do for a living, helps relieve that anxiety.
3. As usual, examples of companies that successfully adapt to changing forces and factors
will help students internalize the messages in this chapter.
Student Projects
1. Define the marketing environment for Starbucks (www.starbucks.com). Keep in mind that a
company’s marketing environment consists of the actors and forces outside marketing that
affect marketing management’s ability to build and maintain successful relationships with
target customers.
2. What are the fundamental differences between consumer markets, business markets, and
reseller markets?
3. Consider your college/university. What are the publics to which it must pay attention?
4. About 12 percent of the U.S. population moves every year. How is this good for marketers?
5. Describe the differences in products that appeal to the middle class, working class, and upper
class.
Small Group Assignment
Form students into groups of three to five. Each group should read the opening vignette to the
chapter on Kellogg. Each group should answer the following questions:
1. What was the foundation of Kellogg’s initial success in the marketplace?
2. What caused Kellogg to stumble and lose millions in sales?
3. What consumer preference changes may be on the horizon that could cause additional
problems for Kellogg?
Each group should share its findings with the class.
Individual Assignment
Go online and compare the marketing strategies of McDonald’s (www.mcdonalds.com), Wendy’s
(www.wendys.com), and Burger King (www.burgerking.com). What age group is each targeting?
Do you agree with their strategy?
Think-Pair-Share
Consider the following questions, formulate answers, pair with the student on your right, share
your thoughts with one another, and respond to questions from the instructor.
1. What are the fundamental differences between Millennials and Generation Z?
2. How has the typical family changed just in your lifetime?
3. Overall, the U.S. population is becoming better educated. What implication does this hold for
marketers?
4. By 2060, Hispanics will comprise an estimated 28 percent of the U.S. population. How will
this impact the manner in which some products are marketed?
5. What is the one most significant trend in the natural environment, in your opinion, and how
is it impacting marketing activities?
Classroom Exercise/Homework Assignment
Take a look at Wendy’s (www.wendys.com). How is this company attempting to set itself apart
from its primary competitors? What publics does Wendy’s appear to be concentrating on? Why
do you believe this is the case?
Classroom Management Strategies
This will be the first time students will have thought about the marketing environment and what
it means to companies in their marketing efforts. The concept of understanding consumer needs
and wants will be totally foreign to them at worst, and at best a novel concept. Once the students
begin to see the complexity of the marketing environment, however, there will be a tendency for
their eyes to glaze over. As usual, working through several examples for each concept will help
tremendously.
1. College is a place to break things down into their component parts to study them in
isolation. The section on the company’s microenvironment may well be the first time the
students will have looked at marketing as needing to pay attention to anything other than
marketing concepts. At least 15 minutes should be devoted to this topic in class. The
difficult concepts will most likely be in the areas of marketing intermediaries and publics;
spending sufficient time on these two topics will make the following chapters that much
easier.
2. The majority of the class time, 30 to 40 minutes, should be spent on the
macroenvironment. There is a tremendous amount of information in this section,
particularly in the section describing the demographic environment. It’s helpful here to
link some of these concepts back to what they learned in sociology courses, or, if the
students have not taken any of the social sciences, you can point out how they interact
with business. The next most intense part of this section is the political environment and
the sheer number of laws passed that affect marketers. The cultural environment section
is a good time to tie in principles of psychology.
PROFESSORS ON THE GO
Analyzing the Marketing Environment
Key Concepts
Microenvironmental forces
List the six actors in the company’s microenvironment. Next, go to the Walmart Web
site (www.walmart.com), scroll down to the Investor Relations section, and click on
the most recent annual report. How many of the six microenvironment actors can you
find? Briefly describe each.
Get in groups in class and role-play bringing a new product to market that the R&D
department has just developed. There should be a person for each of these roles:
R&D, Marketing, Finance, Purchasing, Suppliers, and a Marketing Intermediary.
Each should argue from their point of view and for the needs of each of their
organizations. Report your findings and your impressions to the class.
What does a marketing intermediary do?
How many publics can you name for your college or university?
Key Concepts
Macroenvironmental forces
A writer once observed, “You can watch the size of the Cadillac market shrink by just
reading the obituaries.” In the context of the external environmental forces discussed
in the chapter, what did this person mean? What has Cadillac done to counter this
trend? From an environmental management perspective, would you consider
Cadillac’s actions to be reactive or proactive? Why?
There’s an old saying that, “two good marketing people can make up for one bad
technology decision.” Is it a certainty that a company will lose out on new
opportunities if it does not keep up with new technology? Explain your position. Can
you think of an industry segment where technology may not play an important role?
Collect ten advertisements and comment on how they apply to the cultural
environment (use the areas suggested by the chapter as a place to begin). What effect
do cultural values and beliefs have on consumption? Relate this approach to what you
learned about the marketing concept and value delivery in the previous chapters.
Do you think the Internet should be regulated? Why or why not? Do you buy online?
Why or why not?