Chapter 5 – Analyzing the Marketing Environment Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
1
Chapter 5
Analyzing the Marketing Environment
Tools for Instructors
• Brief Chapter Outline
• Learning Objectives
• Extended Chapter Outline
• Answers to End of Chapter Learning Aids
• Chapter Case Study
• Additional Teaching Tips
• Connect Activities
Brief Chapter Outline
A Marketing Environment Analysis Framework
The Immediate Environment
Macroenvironmental Factors
End of Chapter Learning Aids
Chapter Case Study: A Next-Generation Cleanser
Learning Objectives
LO5-1 Outline how customers, the company, competitors, and corporate partners affect marketing
strategy.
Everything a firm does should revolve around the customer; without the customer, nothing gets sold.
Firms must discover their customers’ wants and needs and then be able to provide a valuable product or
service that will satisfy those wants or needs. If there were only one firm and many customers, a
marketer’s life would be a piece of cake. But because this situation rarely occurs, firms must monitor their
competitors to discover how they might be appealing to their customers. If a firm does not monitor its
and services.
LO5-2 Explain why marketers must consider their macroenvironment when they make decisions.
What are the chances that a fast-food hamburger restaurant would be successful in a predominantly
Hindu neighborhood? Not good. Marketers must be sensitive to such cultural issues to be successful, and
they must also consider customer demographics—age, income, market size, education, gender, and
Chapter 5 – Analyzing the Marketing Environment Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
2
services more quickly and efficiently. The general state of the economy influences how people spend
their discretionary income. When the economy is healthy, marketing success comes relatively easily. But
when the economy gets bumpy, only well-honed marketing skills can yield long-term successes.
Naturally, all firms must abide by the law, and many legal issues affect marketing directly. These laws
pertain to competitive practices and protecting consumers from unfair or dangerous products.
LO5-3 Describe the differences among the various generational cohorts
Generational cohorts are groups of consumers of the same generation. They are likely to have similar
purchase and consumption behaviors due to their shared experiences and stages of life. The four main
the world, and preferences with regard to marketing efforts.
LO5-4 Identify various social trends that impact marketing.
Social trends have a tremendous impact on what consumers purchase and consume. Understanding
customers better.
Extended Chapter Outline with Teaching Tips
I. A Marketing Environment Analysis Framework
II. The Immediate Environment
A. Company Capabilities
B. Competitors
C. Corporate Partners
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the components of the immediate environment?
Answer: The components of the immediate environment are the company’s capabilities,
III. Macroenvironmental Factors
A. Culture
B. Demographics
Chapter 5 – Analyzing the Marketing Environment Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
3
C. Social Trends
D. Technological Advances
E. Economic Situation
F. Political/Regulatory Environment
G. Responding to the Environment
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the six key macroenvironmental factors?
2. Differentiate between country culture and regional culture.
Answer: Country culture includes artifacts, behavior, dress, physical settings, ceremonies, and so
on but also includes subtle aspects of culture. Regional culture applies to a region’s references to
3. What are some important social trends shaping consumer values and shopping behavior?
Answer: The green movement, privacy concerns, and health and wellness concerns are some
Answers to End of Chapter Learning Aids
Marketing Digitally
1. Seventh Generation is the leading brand of nontoxic, environmentally safe household
products in the United States. Visit its website (http://www.seventhgeneration.com) and review
the philosophy behind the business. Next, review the site to identify the products the
company offers. Briefly summarize some of the consumer trends you think are reflected.
Describe the ways in which Seventh Generation’s products address the wants and needs of
its customers.
Seventh Generation is an example of a firm that centers its marketing strategy around green,
environmentally friendly products. In addition to the company’s principles and products, students must
Chapter 5 – Analyzing the Marketing Environment Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
4
Towels.
2. Visit The Cool Hunter (http://www.thecoolhunter.net) and identify examples that would provide
marketers insights regarding social trends.
Information on this website is constantly changing in order to highlight “all things creative.” The purpose
of this website is to be a leading authority and a global hub for “what’s cool, thoughtful, innovative, and
original.” The site showcases products, companies, and people from around the world that are doing
that are example of how changes in social trends are manifesting themselves.
3. Visit and explore the website of your favorite breakfast cereal. Identify the demographics of its
target customer. Evaluate the effectiveness of its marketing strategy.
Student answers to this question may vary widely.
Marketing Applications
1. Assume you are going to open a new store selling fitness products. Describe it. Who are your
competitors? What would you do to monitor your competitors’ actions? Who are your
customers? What are you going to do to appeal to them? What are your social
responsibilities, and how will you meet them?
This question asks students to think about what it would take to open a new store selling fitness products.
When asked to describe the store, students should consider the target market and the four Ps of the
store. In addition, the question challenges students to think about their potential competitors and how
they might stay abreast and ahead of any competitive actions. The social responsibility answer should
products.
2. How would your approach to buying a computer differ from your parents’ approach? What
about buying an outfit to wear to a party? How can firms use their knowledge of different age
or generational cohorts to market their products and services better?
Members of Generation Z were born into a world that was already full of electronic gadgets and digital
technologies. That translates into customers that are more familiar and comfortable than their parents
when purchasing computers. In addition, these Digital Natives use computers in different ways than their
parents.
example, age groups can identify the appropriate media in which firms should advertise.
3. How can firms use customer demographics like income, market size, education, and ethnicity
to market to their customers better?
Demographic data indicates more than just income distribution, levels of education, or ethnicity within a
particular geographic area; marketers use this information to better understand their customers and
Chapter 5 – Analyzing the Marketing Environment Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
5
Firms can use demographic data to target their products or services toward the customer segment that
4. Identify some of the ethnicity changes in the United States. Describe how they might affect the
marketing practices of (a) a radio station in Texas, (b) food retailers in cities, and (c) a home
furnishing store in New York City.
Because of immigration and increasing birthrates among various ethnic and racial groups, the United
States continues to grow more diverse. Here are some of the effects on marketing practices:
(a) a radio station in Texas
The majority of recent immigrants to Texas originate from Mexico, Central America, and South America.
(b) food retailers in cities
Many foreign-born Americans and recent immigrants tend to concentrate in a handful of metropolitan
(c) a home furnishing store in New York City
As immigrants arrive in New York City, they sometimes congregate in certain parts of the city. A store in
5. Identify some recent technological innovations in the marketplace and describe how they
have affected consumers’ everyday activities.
Students will provide various answers. Here are some of the more popular technological innovations:
Consumers have constant access to the Internet everywhere through services such as Wi-Fi, Mobile
Hotspots, 4G, and LTE. Smartphones using the iOS and Android systems. This allows for greater
Consumers are increasingly dependent on new technology, especially in terms of making decisions and
Chapter 5 – Analyzing the Marketing Environment Marketing 6th
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
7
Answer: (c) to offer greater value than competitors offer.
Chapter Case Study: A Next-Generation Cleanser
1. What consumer trends does Seventh Generation respond to most effectively?
Seventh Generation does a great job of responding to the social trend of green marketing. Green
marketing involves a strategic effort by firms to supply customers with environmentally friendly products.
2. Which consumer trends might it be missing?
Another popular social trend is thrifty consumers. American society has become a consumer society.
However, with the recent recession and housing crash, many consumers are spending less and taking
Additional Teaching Tips
Perhaps the most challenging aspect of this chapter is for students to truly understand the relationships
between the areas of the marketing environment. Since Exhibit 5.1 (Understanding the Marketing
Environment) appears to be self-explanatory, students tend to gloss over it in the reading since they
understand most of the vocabulary in the figure. Instructors may want to lead a group assignment in
which groups need to create a marketing situation that demonstrates the impact of the factors (instructors
can assign one per team, such as “social” to team 1, “economic” to team 2, and so on. The group also
needs to go one-step further in assessing that factor’s effect on the competition, corporate partners, the
company, and ultimately the consumer. The instructor also may elect to have teams come up with one
example of each of the factors (though this may be time consuming). Students will tend to shy away from
a marketing example so the instructor should emphasize it needs to be a clear marketing example.
Once those examples are shared (perhaps put on the whiteboard or transferred to the transparency of the
figure), class discussion should follow addressing the impact of the environmental factors on the
marketing strategy and how it may even impact the SWOT.
Online Tip: This exercise is easily transferred to either an online team assignment or separate posts with
each of the external factors becoming one of the post topics (divide the class by last name alphabetically
to answer some of the posts or have students contribute one example to each of the posts/external
factors).