09/03/2015

i t s good and
good for you

Chapter Three
Analyzing the Marketing
Environment
1- 1

Analyzing the Marketing

Environment
Topic Outline

The Companys Macroenvironemnt

The Demographic Marketing Environment
The Economic Environment
The Natural Environment
The Technological Environment
The Political and Social Environment
The Cultural Environment
The Companys Microenvironment
Responding to the Marketing Environment
3-2

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The Marketing Environment

The marketing environment includes the
actors and forces outside marketing that
affect marketing managements ability to
build and maintain successful relationships
with customers

3-3

The Companys
Macroenvironment

3-4

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The Companys
Macroenvironment
Demographic Environment

Demography: the study of human populations-size, density, location, age, gender, race,
occupation, and other statistics
Demographic environment: involves people,
and people make up markets
Demographic trends: shifts in age, family
structure, geographic population, educational
characteristics, and population diversity

3-5

The Companys
Macroenvironment
Demographic Environment

Changing age structure of the population

Baby boomers include people born between
1946 and 1964
Most affluent Americans

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The Companys
Macroenvironment
Demographic Environment

Generation X includes people born

between 1965 and 1976

High parental divorce rates

Cautious economic outlook
Less materialistic
Family comes first

3-7

The Companys
Macroenvironment
Demographic Environment

Millennials (gen Y or echo boomers) include

those born between 1977 and 2000

Comfortable with technology

Tweens (ages 812)
Teens (1319)
Young adults (20s)

3-8

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The Companys
Macroenvironment
Demographic Environment

Generational marketing
is important in
segmenting people by
lifestyle of life state
instead of age

3-9

The Companys
Macroenvironment
Demographic Environment
More people are:
Divorcing or separating
Choosing not to marry
Choosing to marry later
Marrying without intending to have children
Increasing number of working women
Increasing number of stay-at-home dads

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The Companys
Macroenvironment
Demographic Environment
Growth in U.S. West and
South and decline in
Midwest and Northeast
Move from rural to
metropolitan areas
Change in where people
work
Telecommuting
Home office
3-11

The Companys
Macroenvironment
Demographic Environment

Changes in the Workforce

More educated
More white collar

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The Companys
Macroenvironment
Demographic Environment
Increased Diversity
Markets are becoming more diverse

International
National

Includes:

Ethnicity
Gay and lesbian
Disabled

3-13

The Companys
Macroenvironment
Economic Environment

Economic environment consists of factors

that affect consumer purchasing power and
spending patterns
Industrial economies are richer markets
Subsistence economies consume most of
their own agriculture and industrial output

3-14

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The Companys
Macroenvironment
Economic Environment
Value marketing
offering financially cautious
buyers greater value
the right combination of
quality and service at a
fair price

3-15

The Companys
Macroenvironment
Natural Environment

Natural environment: natural resources that

are needed as inputs by marketers or that
are affected by marketing activities
Trends

Increased shortages of raw materials

Increased pollution
Increased government intervention
Increased environmentally sustainable
strategies

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The Companys
Macroenvironment
Technological Environment

Most dramatic force

in changing the
marketplace
New products,
opportunities
Concern for the
safety of new
products
3-17

The Companys
Macroenvironment
Political and Social Environment

Political environment
laws, government agencies, and pressure
groups that influence or limit various
organizations and individuals in a given
society

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The Companys
Macroenvironment
Political and Social Environment
Legislation regulating
business
Increased legislation
Changing government
agency enforcement
Increased emphasis on ethics
Socially responsible
behavior
Cause-related marketing
3-19

Culture

3- 20

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A TORRE DE BABEL

"Eis que todos constituem um s povo e falam uma s lngua.

Isso o comeo de suas iniciativas! Agora, nenhum desgnio ser
irrealizvel para eles."
Jeov, um pouco antes de confundir a linguagem dos
homens
3-21
(Gnesis,11)

What is Internationalization?
the process of planning and conducting
transactions across national borders to
create exchanges that satisfy the objectives
of individuals and organizations

3-22

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Key Internationalization Questions

How will my idea, good, or service fit into
the international market?
Should I obtain my supplies domestically or
from abroad?
What marketing adjustments are or will be
necessary?
What threats from global competition
should I expect?
How can I work with these threats to turn
them into opportunities?
What are my strategic global alternatives?
3-23

What is Culture?
Culture defined
an integrated system
of learned behavior patterns
that are distinguishing
characteristics of the
members of any given
society...

Acculturation
adjusting or adapting to a specific culture other
than ones own and one of the keys
to success in international operations. 3-24

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Culture
The collective mental programming of the people in
an environment. Culture is not a characteristic of
individuals; it encompasses a number of people
who were conditioned by the same education and life
experience.
(Hofstede)

collective programming (software) of the mind

which distinguishes the members of one group
or category from another
(Hofstede)

3-25

Three levels of uniqueness in human mental programming

Specific to
the individual
Personality

Specific to a
group or
category

Universal

Inherited and
learned

Learned
Culture

Inherited
Human Nature

3-26

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Layers of Culture
national (country)
regional and/or ethnic
and/or linguistic
gender
generation level
social class

organizational or
corporate level
3-27

National Cultures
In national cultures, all spheres of life and
society are interrelated: family, school, job,
religious practice, economic behavior,
health, crime, punishment, art, science,
literature, management, leadership
There is no such thing as a separate
management or leadership culture
(Hofstede, Geert) - 2003
3-28

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National versus Organizational Cultures

National culture differences are rooted in

values learned before age 10
They pass from generation to generation
For business, they are given facts
Organizational cultures are rooted on
practices, learned on the job
Given enough management attention, they
can be changed
(Hofstede, Geert) - 2003
3-29

Expressions of Culture
SYMBOLS

HEROES
RITUALS

VALUES

PRACTICES

3-30

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Values
Values
are shared beliefs or
group norms that
have been
internalized by
individuals.

3-31

Values
Like evil good, abnormal normal,
dangerous safe, dirty clean, immoral
moral, indecent decent, unnatural
natural, paradoxical logical, ugly
beautiful, irrational - rational
What is rational is a matter of values and
differs between countries
(Hofstede, Geert) - 2003
3-32

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VALUES
Values are learned early in life and are often
unconscious
Human are born incompletely programmed
During the first 10 years of our lives our brain has
a special ability for being programmed with
complex information
This programming is provided by our societal
environment and includes all basic values
After age 10, basic values dont change
(Hofstede, Geert) - 2003
3-33

age

VALUES

family
VALUES
10

school

PRACTICES
work

20

3-34

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Key Concepts
High-context culture
is where the social context in which what is said
strongly affects the meaning of the message.
Examples: Japan and Saudi Arabia

Low-context culture
is where the meaning of the message
is explicitly expressed by the words and is
less affected by the social context.
Example: North America

Change agent
An entity that introduces new
products or ideas or practices.
3-35

High & Low Context Cultures defined

High context
cultures

context is as important
as what is being said;
speaker and listener
rely on common
understanding

Saudi-Arabia, Japan
etc.

Low context
cultures

most information is
contained explicitly in the
words

Sweden, U.S, Germany

etc.

3-36

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The Elements of Culture

Language - verbal and non-verbal

Religion
Values and Attitudes
Manners and Customs
Material Elements
Aesthetics
Education
Social Institutions

3-37

Language
Verbal

How words are spoken

Gestures made
Body position assumed
Degree of eye contact

Local language capabilitys

important role in international marketing

Aids in information gathering and evaluation

Provides access to local society
Important to company communications
Allows for interpretation of contexts
3-38

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Nonverbal Language
Hidden language of cultures

Time flexibility and sensibility

Social acquaintance and rapport
Personal physical space and personal touching
Non-verbal gestures and signaling

3-39

The Major World Religions

Christianity - 2.0 billion followers

Islam - 1.2 billion followers
Hinduism - 860 million followers
Buddhism - 360 million followers
Confucianism - 150 million followers

3-40

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Values and Attitudes

Values
are shared beliefs or
group norms that
have been
internalized by
individuals.

Attitudes
are evaluations
of alternatives
based on these
values.
3-41

Manners and Customs

Potential problem areas for
marketers arise from an
insufficient understanding of:
different ways of thinking.
the necessity of saving face.
knowledge and understanding
of the host country.
the decision-making process
and personal relations.
the allocation of time
for negotiations.
3-42

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Material Elements
Material culture
Results from technology and is directly related to how
a society organizes its economic activity.
Material culture is manifested in

Economic infrastructure
Social infrastructure
Financial infrastructure
Marketing infrastructure
Cultural convergence

The degree of industrialization

can provide a marketing
segmentation variable.

3-43

Aesthetics
What is or is not acceptable as good taste
varies widely in cultures.
The symbolism of colors, forms, and music
carries different meanings in different
cultures.

3-44

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Education
Assessing the educational level of a culture
formal and informal education
literacy rates
enrollment in secondary
or higher education
qualitative aspects of
emphasizing science

Education affects
employee training
competition for labor
product characteristics
3-45

Social Institutions
Kinship relationships
immediate and extended family

Social stratification
Reference groups
Primary reference groups
family, coworkers

Secondary reference groups

professional associations,
trade organizations

3-46

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Question
Culture can be thought of as a
societys personality. If your
culture were a person, how would
you describe its personality traits?

3-47

CULTURAL ANALYSIS
Hoefstedes dimensions to assess target markets position on
culture through four dimensions:

Individualism (I, we, and they)

Power distance (e.g. The level of equality in a society)
Uncertainty Avoidance (e.g. The need for formal rules and
regulations)

Masculinity (e.g. Attitudes toward achievement, roles of men

and women)

3-48

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Dimensions of Culture
Individualism
I consciousness versus we consciousness

Power distance
Level of equality in a society

Uncertainty avoidance
The need for formal rules and regulations

Masculinity
Attitudes toward achievement
The roles of men and women

Orientation
Long-term versus short-term results approach
3-49

5 Dimensions of Culture (Hofstede, 2003)

RELATION WITH IN-GROUP:LOOSE OR TIGHT?
Individualism versus Collectivism
I consciousness versus we consciousness

INEQUALITY: MORE OR LESS? Power distance: large

versus small
Level of equality in a society

THE UNFAMILIAR: FIGHT OR TOLERATE? Uncertainty

avoidance: strong versus weak
The need for formal rules and regulations

EMOTIONAL GENDER ROLES: DIFFERENT OR THE SAME?

Masculinity versus femininity
Attitudes toward achievement; the roles of men and women

NEED GRATIFICATION: LATER OR NOW? Orientation

Long-term versus short-term results approach
3-50

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Individualism index (PDI) values for 50 countries and 3 regions

Score rank

Country or region

PDI score

Score rank

Country or region

PDI score

USA

91

26/27

Brazil/ Arab countries

38

Australia

90

28

Turkey

37

Great Britain

89

29

Uruguay

36

4/5

Canada; Netherlands

80

30

Greece

35

New Zealand

79

31

Philiphinnes

32

Italy

76

32

Mexico

30

Belgium

75

33/35

East Africa; Yugoslavia; Portugal

27

Denmark

74

36

Malaysia

26

10/11

Sweden; France

71

37

Hong Kong

25

12

Ireland

70

38

Chile

23

13

Norway

69

39/41

West Africa; Singapore; Thailand

20

14

Switzerland

68

42

Salvador

19

15

Germany

67

43

South Korea

18

16

South Africa

65

44

Taiwan

17

17

Finland

63

45

Peru

16

18

Austria

55

46

Costa Rica

15

19

Israel

54

47/48

Pakistan; Indonesia

14

20

Spain

51

49

Colombia

13

21

India

48

50

Venezuela

12

22/23

Japan; Argentina

46

51

Panama

11

24

Iran

41

52

Equador

25

Jamaica

39

53

Guatemala

3-51

Power Distance index (PDI) values for 50 countries and 3 regions

Score rank

Country or region

PDI score

Score
rank

Country or region

Malaysia

104

27/28

2/3

Guatemala

95

29/30

Iran; Taiwan

58

2/3

Panama

95

31

Spain

57

Philiphinnes

94

32

Pakistan

55

5/6

Mexico

81

33

Japan

54

5/6

Venezuela

81

34

Italy

50

Arab countries

80

35/36

Argentina; South Africa

49

8/9

Equador

78

37

Jamaica

45

8/9

Indonesia

78

38

USA

40

10/11

India

77

39

Canada

39

10/11

West Africa

77

40

Netherlands

38

12

Yugoslavia

76

41

Australia

36

13

Singapore

74

42/44

Costa Rica; Germany FR;

Great Britain

35

14

Brazil

69

45

Switzerland

34

15/16

France; Hong Kong

68

46

Finaland

33

17

Colombia

67

47/48

Norway

31

18/19

Turkey; Belgium

66

49

Sweden

28

20

Belgium

65

50

Ireland

22

21/23

East Africa; Peru; Thailand

64

51

New Zealand

18

24/25

Portugal

63

52

Israel

13

26

Uruguay

61

53

Austria

11

27/28

Greece

60

South Korea

PDI score
60

3-52

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Uncertainty Avoidance index (PDI) values for 50 countries and 3 regions

Score rank

Country or region

PDI score

Score
rank

Country or region

Greece

112

31/32

Iran; Finland

Portugal

104

33

Switzerland

Guatemala

101

34

West Africa

Uruguay

100

35

Netherlands

5/6

Belgium; Salvador

94

36

East Africa

Japan

92

37

Australia

Yugoslavia

88

38

Norway

Peru

87

39/40

South Africa; New Zealand

10/15

France; Chile; Spain; Costa Rica;

Panama; Argentina

86

41/42

Indonesia; Canada

16/17

Turkey

85

43

USA

18

Mexico

82

44

Philippines

19

Israel

81

45

India

20

Colombia

80

46

Malaysia

21/22

Venezuela; Brazil

76

47/48

Great Britain; Ireland

23

Italy

75

49/50

Hong Kong; Sweden

24/25

Pakistan; Austria

70

51

Denmark

26

Taiwan

69

52

Jamaica

27

Arab countries

68

53

Singapore

28

Equador

67

29

Germany

65

30

Thailand

64

PDI score

3-53

Masculinity index (PDI) values for 50 countries and 3 regions

Score rank

Country or region

PDI score

Score rank

Country or region

PDI score

Japan

95

30/31

Indonesia; West Africa

45

Austria

79

32/33

Turkey; Taiwan

44

Venezuela

73

34

Panama

43

4/5

Italy; Switzerland

70

35/36

Iran; France

42

Mexico

69

37/38

Spain; Peru

41

7/8

Ireland; Jamaica

68

39

East Africa

40

9/10

Great Britain; Germany

66

40

Salvador

39

11/12

Philippines; colombia

64

41

South Korea

38

13/14

South Africa; Equador

63

42

Uruguay

37

15

USA

62

43

Guatemala

37

16

Australia

58

44

Thailand

34

17

New Zealand

57

45

Portugal

31

18/19

Greece; Hong Kong

56

46

Chile

28

20/21

Argentina; India

54

47

Finland

26

22

Belgium

53

48/49

Yugoslavia; Costa Rica

21

23

Arab countries

52

50

Denmark

16

24

Canada

50

51

Netherlands

14

25/26

Malaysia; Pakistan

49

52

Norway

27

Brazil

48

53

Sweden

28

Singapore

47

29

Israel

46

3-54

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Dimensions of Culture (Hoefstede, 2003)

SMALL PD. WEAK UA

Nordic countries
Anglo countries
Netherlands

LARGE PD. WEAK UA

China
India

SMALL PD. STRONG UA

German Spk countries
Hungary

LARGE PD. STRONG UA

Latin countries
Eastern Europe
Japan, Korea

3-55

Dimensions of Culture (Hoefstede, 2003)

COLLECTIVIST, FEMININE
Thailand, Korea
Costa Rica, Chile
Russia, Bulgaria
Portugal, Spain

COLLECTIVIST, MASCULINE
China, Japan
Mexico, Venezuela
Arab World
Greece

INDIVIDUALIST, FEMININE
France
Netherlands
Nordic countries

INDIVIDUALIST, MASCULINE
Czechia, Hungary
Poland, Italy
German spk countries
Anglo countries

3-56

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Acculturation - the process of adjusting and adapting

to a specific culture other than ones own - is a key sucess factor

(+)

Feelings

(-)
Phase 1Euphoria

Phase 2Culture
shock

Phase 3Acculturation

Phase 4Stable state

Time
3-57

Adjusting to Cultural Differences

Recognition of differences
The Self-reference Criterion
is the basis of most
international business
problems.

Ethnocentrism
regarding ones culture
as superior to others

3-58

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09/03/2015

Making Culture Work For Your

Success

Embrace local culture

Employ locals to gain cultural knowledge
Build relationships
Adapt products to local markets
Help employees understand you
Coordinate by region

3-59

The Training Challenge - Global Managers

Internal education programs that increase
cultural sensitivity
Culture-specific information
Culture-general information
Self-specific information

Specialized training for global managers

Area studies
Environmental briefings
Cultural orientation programs

Cultural assimilator
Sensitivity training
Field experience
3-60

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REMEMBER....
The primary obstacle to success in international

marketing is a persons Self-Reference Criterion

in making decisions, that is, an unconscious reference
to ones own cultural values, experiences, and knowledge
as a basis for decisions.

(SRC)

The SRC impedes the ability to assess a

foreign market in true light !!!

3-61

And remember
one culture has no absolute criteria for judging the
activities of another culture as low or noble.
However, every culture can and should apply such
judgment to its own activities, because its members
are actors as well as observers
(Claude Lvi-Strauss, French anthropologist)

3-62

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The Companys
Macroenvironment
Cultural Environment

Cultural environment consists of institutions

and other forces that affect a societys
basic values, perceptions, and behaviors

3-63

The Companys
Macroenvironment
Cultural Environment
Persistence of Cultural Values

Core beliefs and values are persistent and 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 and include peoples views of
themselves, others, organization, society,
nature, and the universe
3-64

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The Companys
Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values

Peoples view of themselves

People vary in their emphasis on
serving themselves versus serving
others.

Peoples view of others

More cocooning staying home,
home cooked meals
3-65

The Companys
Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values

Peoples view of organizations

Decline of loyalty toward companies

Peoples view of society

Patriots defend it
Reformers want to change it
Malcontents want to leave it
3-66

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09/03/2015

The Companys
Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values
Peoples view of nature

Some feel ruled by it

Some feel in harmony with it
Some seek to master it

Peoples view of the universe

Renewed interest in spirituality

Developed more permanent values
family, community, earth, faith,
ethics
3-67

Responding to the Marketing

Environment
Views on Responding
Uncontrollable

Proactive

Reactive

React and
adapt to
forces in the
environment

Aggressive
actions to
affect forces
in the
environment

Watching
and reacting
to forces in
the
environment

3-68

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09/03/2015

The Marketing Environment

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

3-69

The Companys
Microenvironment
Actors in the Microenvironment

3-70

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09/03/2015

The Companys
Microenvironment
The Company

Top management
Finance
R&D
Purchasing
Operations
Accounting

3-71

The Companys
Microenvironment
Suppliers

Provide the resources to produce goods

and services
Treat as partners to provide customer
value

3-72

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09/03/2015

The Companys
Microenvironment
Marketing Intermediaries

Help the company to

promote, sell and
distribute its
products to final
buyers

3-73

The Companys
Microenvironment
Types of Marketing Intermediaries

Resellers

Physical
distribution
firms

Marketing
services
agencies

Financial
intermediaries
3-74

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09/03/2015

The Companys
Microenvironment
Competitors

Firms must gain strategic advantage by

positioning their offerings against
competitors offerings

3-75

A identificao dos concorrentes

Concorrente de um produto outro qualquer com o qual o
cliente possa substituir o primeiro, total ou parcialmente.
ESPAO CONCORRENCIAL
A concorrncia inter-produtos
A concorrncia inter-segmentos
A concorrncia genrica
3-76

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09/03/2015

A descrio dos concorrentes

1.

A identificao e
situao dos concorrentes

2.

1.

Anlise dos concorrentes

mais importantes

2.
3.

Identificar os concorrentes
(actuais ou novos)
Situar os concorrentes
no espao concorrencial

Poder, experincia e dinamismo

de cada concorrente
Estratgia de cada concorrente
no espao concorrencial
Clculo da capacidade de reaco
dos concorrentes
3-77

A descrio dos concorrentes

1. Poder, experincia e dinamismo de

cada concorrente:

Quota de mercado (em volume e em valor)

Poder da marca
Investimentos e meios de marketing
Meios tecnolgicos
Experincia no mercado nacional e internacional;
Rentabilidade do concorrente;
Dinamismo do concorrente

3-78

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09/03/2015

A descrio dos concorrentes

2. Estratgia de cada concorrente:

Reconstituio da sua estratgia actual e possveis cenrios

futuros
Anlise SWOT (foras, fraquezas, oportunidades e ameaas)

3. Clculo da capacidade de reaco dos

concorrentes

3-79

The Companys
Microenvironment
Publics
Any group that has an actual or
potential interest in or impact on
an organizations ability to
achieve its objectives

Financial publics
Media publics
Government publics
Citizen-action publics
Local publics
General public
Internal publics
3-80

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09/03/2015

The Companys
Microenvironment
Customers

Consumer markets
Business markets
Government markets
International markets

3-81

Five Forces Analysis (Michael Porter)

Threat of New Entrants

Bargaining Power
of Suppliers

Intensive Rivalry
Amongst
Existing Firms

Bargaining Power
of Buyers

Threat of Substitutes

3-82

41