The Marketing Environment
Marketers do not make decisions about target markets and marketing mix variables in a vacuum. They must take into account the dynamic nature of the five dimensions of the marketing environment: competitive, political-legal, economic, technological, and social- cultural factors. Environmental concerns have led to new regulations on air and water pollution. Automobile engineers, for instance, have turned public concerns and legal issues into opportunities by developing hybrid cars for the new century. These new models are fueled by dual energy: a gasoline engine and an electric motor. Toyota was the first to enter the market with its Prius, which depends primarily on the electric motor, but includes a backup gasoline engine. The Prius currently sells in Japan for about $19,000. Changes in the legal environment regarding automobile emissions alerted automobile designers to make these changes. By accommodating future needs of consumers and meeting the more stringent legal requirements, they created a new market segment. It did not take long for competitors to follow Toyota’s lead. Honda’s new VV model runs primarily on its gasoline engine with the electric motor as its secondary energy source. Honda plans to hit the showrooms with a vehicle that offers a lower price and better gas mileage. Nissan and Fuji Heavy Industries also have models on the drawing boards for launches scheduled within the next two years. European and U.S. automakers, however, have not jumped at the chance to enter the race with their version of a hybrid car. General Motors might have a so-called green car ready in 2001; Ford and DaimlerChrysler say they may be ready by 2005.
Corporate giants are increasingly looking to foreign shores for new growth markets. Wal-Mart has been the star child of American business for years, although a mounting number of competitors has begun to chip away its market. When the going got tough, Wal-Mart got going—to other countries, that is. Within two years, it doubled its foreign sales to $7.5 billion. Currently only 6 percent of Wal-Mart’s sales are from outside the United States, but this huge potential market is a major current focus.24
Two more important characteristics in the contemporary marketing environment include cultural diversity and ethical concerns. Every chapter in this book contains detailed examples that explore the impact of these factors.