Introduction to the environment

INTRODUCTION TO THE ENVIRONMENT

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  Information acquisition situations include physical and social stimuli in the environments where consumers acquire information about products, prices, promotions, and places to buy. Two important behaviors in these situations are information contact and communication (with marketers and with other consumers).
  

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  Shopping situations include the physical environment of stores and buildings where shopping behaviors occur, as well as other environments in which consumers shop, such as telephone or mail order shopping. Two important behaviors in shopping situations are product and store contact (how does the consumer come into contact with products and stores?).
  

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  Purchasing situations include the stimuli present in the environment where the actual purchase takes place (a retail store or a living room for catalog sales). The purchasing environment may or may not have substantial overlap with the shopping environment. Two important behaviors in purchasing situations are funds access (how consumers get access to their money) and the final transaction (the actual purchase).
  

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  Consumption situations include the physical and social stimuli present in the environments where consumers use and consume a product or service as well as the consumption behaviors, and related affective and cognitive responses.
  

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  Disposition situations concern the physical and social stimuli present when consumers dispose (get rid of) products. The key behaviors concern actual disposal of the product (placing an ad in the paper for a used car, showing it to possible buyers, etc.).
  

Marketers will find it useful to identify and study how the environmental, behavioral and cognitive/affective factors interact in these four situations. They can use this understanding to develop more effective marketing strategies to influence consumers' behaviors in each situation.

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  Functional environment
  

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  Differences between physical, social and marketing environments
  

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  Elements of marketing strategy--product, promotion, price and place factors--as major environmental stimuli affecting consumers' cognitions and behaviors
  

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  Key aspects of the macro social environment--culture, subculture, and social class
  

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  Key aspects of the micro social environment--reference groups and family
  

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  Aspects of the physical environment and their influence on consumers' affect, cognition and behavior
  

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  Situations as goal directed behaviors, along with affective and cognitive responses in an environment
  

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  Aspects of situational analysis
  

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  Types of marketing situations--information, shopping, purchasing, consumption, and disposition situations
  

1. The social environment

2. The physical environment

a. Time

c. Lighting

3. Marketing implications
D. Situations

1. Analyzing situations

2. Generic consumer situations

a. Information acquisition situations

b. Shopping situations

c. Purchasing situations

d. Consumption situations

e. Disposition situations

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  describe the functional or perceived environment.
  

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  distinguish between aspects of the social, physical, and marketing environments.
  

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  recognize and define the key aspects of the social environment--culture, subculture, social class, reference groups, and family.
  

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  recognize that the four major strategic elements in the marketing mix--product, promotion, price and place factors--are stimuli in the physical and social environment that can affect consumers' affect, cognitions and behaviors.
  

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  define a situation and describe its relationship with the environmental factors, behaviors, and affect and cognition.
  

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  describe five different marketing situations--information, shopping, purchase, consumption and disposition situations--and identify the key behaviors in each.
  

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  Show the wheel of consumer analysis and point out how/where environmental factors fit and remind students of the sections on affect/cognition and behavior already covered in the course.
  

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  You might review, briefly, the concept of the functional (perceived) environment. Since marketers usually deal with groups of people (in segments), the functional environment, as interpreted by consumers, is of most interest.
  

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  Begin by reviewing the differences between the social and physical environment as covered in the text.
  

The physical environment concerns all nonhuman factors, including spatial elements (places and objects) and nonspatial concepts (temperature, noise, etc.). The opening example in this chapter describes the physical environments of elaborately decorated resort hotels in Las Vegas, which were designed to influence customers' behaviors.

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  Then, ask students to discuss those aspects of the social and physical environment that are under the control of the marketing manager (see page 270 in the text). We might call this the “marketing environment.”
  

Many of the social and physical stimuli that are under the control of the marketing manager will be related to the product or service being marketed. Essentially, these are the "4 P's" of marketing--price, product, promotion, and place (distribution). The stimuli associated with each of these marketing strategies are experienced by consumers as aspects of their immediate environment. Thus, marketing strategies are part of the environment. The marketing environment can influence consumers' affect, cognitions and behaviors.

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  To help students understand these distinctions, ask them to identify various aspects of the social, physical, and marketing environments in a somewhat complex purchase situation such as shopping for a personal computer at a local retailer.
  

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  To further reinforce this point, ask students to describe how a new product introduction, or a special price promotion, or an advertising campaign, or a change in retail store all involve changes in the environment.
  

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  Alternatively, describe a couple of specific marketing strategies derived from the business press, or assign the Marketing Strategy in Action case--America's Movie Theaters.
  

These examples can stimulate a detailed analysis of environmental factors that can influence consumer behavior.

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  Emphasize that the influence of the environmental factors in a marketing strategy depends on consumers' behaviors, their affective and cognitive responses, and how these environmental factors interact with behaviors, affect, and cognition.
  

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  Ask students to discuss these reciprocal interactions in terms of the Wheel of Consumer Analysis (show a transparency of the model to guide the discussion).
  

For instance, certain behaviors may be necessary for consumers to come into contact with the marketing strategy (to see the ad consumers must first read the newspaper). Then, the ad must be interpreted. The resulting affect and cognition might influence subsequent behaviors such as going to the store to look at the product, and so on. In addition, consumers' cognitive reactions to the marketing strategy are strongly influenced by their mental processes and the knowledge they have stored in memory. In turn, the marketing strategy might change knowledge in memory, which could influence behavior, and so on.

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  Ask two or three students to describe a simple situation in which they use some product such as salty snack products (chips or pretzels) or soft drinks.
  

Students could follow the same format in the text by describing the environment in which they often consume snacks, the major goal they seek to achieve, their affective feelings and cognitive

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  Then, ask students to discuss the marketing implications of these snacking situations (assuming that they represent sizable market segments).
  

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  Select a product purchase such as buying a personal CB player, or any other product of interest.
  

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  Ask students to discuss the key environmental characteristics (both social and physical) in each type of situation and the major behaviors of interest. The major affective and cognitive responses could also be discussed.
  

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  Environmental factors include ads, brochures, news articles, media (TV, newspapers, magazines), clutter from competing ads.
  

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  Behaviors include searching for relevant information looking at newspaper ads, seeking advice from friends, reading articles in stereo magazines.
  

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  Feelings and cognitions could include interest, boredom, anxiety, beliefs and attitudes about alternatives, intentions to buy.
  

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  Environmental factors include the store location, the layout of the store, the merchandise displayed for sale, salespeople in the store, other people shopping in the store, temperature, crowding and noise in the store.
  

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  Behaviors include traveling to the store, looking for the products in the store, trying the different brands, talking to the salesperson.
  

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  Feelings and cognitions could include knowledge of store location, feelings of hassle, interest and excitement of seeing different models, changes in beliefs, attitudes, and purchase intentions.
  

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  Environmental factors could include the cash register counter, credit policies, and the salesperson.
  

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  Behaviors include paying with your credit card or by writing a check, filling out the warranty card, carrying the product out of the store.
  

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  Feelings and cognitions could include anxiety at whether a good decision was made, pride of ownership, excitement, and satisfaction in making a good buy, relief, intentions to take good care of it.
  

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  Environmental factors include social and physical aspects of where ever one listens to the CD player (e.g., in one's living room or bedroom, or car).
  

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  Behaviors include unpacking and "assembling" the player; using the controls; listening to it in one's living room, bedroom, or car; carrying it with you while jogging along the beach.
  

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  Feelings and cognitions could include relaxation or arousal, pride, status feelings, beliefs about the product, attitudes and intentions.
  

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  Throughout the discussion, reinforce the point that all marketing strategies are experienced by consumers as aspects of the social and physical environments in these situations.
  

Implementing a new marketing strategy necessarily changes consumers' environments. In turn, these environmental factors may influence consumers' affect, cognitions and behaviors. (The effects of specific marketing strategies are covered in more detail in the last chapters of the text.)

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  Challenge students to identify the specific social and physical stimuli that marketers control in some of the situations/environments discussed in class. Ask students to speculate about the probable success of these strategies and how/why they worked.
  

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  Ask students to describe the "contents" of the various marketing situations for several alternative marketing channels--such as retail stores, catalogs, Web, and a flea market.
  

Each channel of distribution can be analyzed in terms of the five generic situations described above--information acquisition, shopping, purchasing, consumption, and disposition. For each channel, students should be able to identify the key environmental characteristics, the major behaviors, and the critical affect and cognition factors in each situation.

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  As a guide to the discussion, show a transparency in the shape of a matrix.
  

List the five main situations down the left and the four channel types across the top. Students should be able to "fill in" each cell with the environmental, behavioral, and cognitive/affective factors of greatest importance. This exercise should point out the advantages and special insights that can be gained by looking closely at the characteristics of different situations.

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  Challenge students to identify the important environmental factors and situations in this description of an increasingly popular type of shopping environment.
  

Several companies have experimented with movable shopping environments. KFC, for example, rolled out a new concept in 1991—mobile merchandising. They build a KFC restaurant in a 42-foot-long trailer. Towed by a truck, the mobile KFC unit can be set up at fairs, outdoor concerts, and amusement parks to pursue customers wherever they go. KFC is not alone. Pizza Hut and Taco Bell also have mobile kiosks and carts in place, many in airports.

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  Ask students to discuss some of the following questions about this example.
  

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  Analyze the mobile shopping strategy in terms of the situations outlined in the text. What environmental and behavioral factors are relevant in the information contact, shopping, purchasing, consumption, and communication situations?
  

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  Identify some of the major environmental factors that affect consumers’ tendencies to buy at these mobile shopping areas.
  

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  What types of benefits and values do various types of consumers receive from buying food from these mobile units?
  

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  What are some of the ways different consumers might view food that is served at these mobile units?
  

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  Speculate about the longer-range impact of these mobile shopping environments. Will they become more prevalent? In what new locations might we see them? Will they remain exclusively a fast food domain?
  

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  Describe the various components of the marketing environment for a retail business of your choice. Pick a store that you are familiar with--perhaps a clothing store, or a favorite restaurant.
  

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  Discuss the information, shopping, purchasing, and consumption environments in this overall marketing environment.
  

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  Then, describe and evaluate the store's marketing strategies for each part of the marketing environment. What is the store doing and what do you think about it?
  

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  Write up your analysis to be handed in for evaluation, or come to class prepared to present your analysis to the class for discussion.
  

1. 
   Go to the Mirage homepage at www.themirage.com and explore the various environments at this hotel—including a volcano that erupts every few minutes, a tropical rain forest, a giant aquarium with live sharks, gourmet restaurants, waterfalls and connected lagoons, a spa, a European-style shopping boulevard, Siegfried & Roy’s jungle habitat for white tigers, a pool for Atlantic bottlenose dolphins, and over 3,000 deluxe rooms and suited. Describe how these environments might appeal to consumers in different market segments. How might these environments influence consumers’ behaviors (stay at the Mirage and gable there)?
   

This is a web exercise aimed at getting students to find information about the Mirage from the web. It also aims at getting them to think about the various environmental factors that influence consumers. This, the use of several different, but related, elements at the Mirage hotel like the waterfalls, the volcano, etc., are deigned to keep consumers interested in the hotel. They are also designed to create an atmosphere of outdoors and relaxation in a luxurious setting. Having other things to do besides gamble may stimulate consumers to stay longer. Thus, there is diversion for those who do not wish to gamble but who are traveling with consumers who do.

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   Contrast the two approaches marketers can take to analyzing environmental effects—considering the direct effects of specific environmental factors versus considering environmental factors in the context of situations. Under what circumstances might each of these two approaches be more appropriate?
   

The differences between the “environmental” and “situational” approaches are the basis for the organization and content of this chapter.

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   Use the situation of shopping for a personal CD player to describe the relationships between the physical and social environments. Point out those aspects that marketers could control.
   

This review/application question concerns the differences and interrelationships between these two "types" of environments.

The CD player example should have enough relevance and consensual meaning for undergraduate students to generate a good discussion. Students should develop specific examples of the physical and social factors in each environment that influence similar factors in other environments. Students should also discuss how these environmental factors influence consumers' behaviors, affect and cognition.
For instance, spatial and nonspatial elements in the physical environment constrain specific strategies in the marketing environment (You can't build a new store on the corner if the current owner won't sell). Marketing strategies can affect the general social environment.
For instance, in 1990, marketing strategies to promote the Simpsons (a cartoon family on TV) were so effective that they influenced the general physical and social environments (people were talking about the Simpsons, new stories were written about them, various commentators analyzed what this craze meant about American society, and so on).
5. What is a situation? Use several of your own recent purchases to show how situations differ from environments.
The definition answer to this question is covered on pages 270-271 in the text. The section on situations in the Teaching Ideas and Suggestions above reviews this point in detail. Reviewing this material is recommended since some students may find the definition of situations somewhat complex and a bit subtle.
Situations are not the same as the so-called "raw" environment. The term “environment” refers only to the physical and social features or stimuli in the environment.
Students should recognize that the "raw" environment does not include a goal-oriented actor (a person who is pursuing goals and objectives, perhaps even trying to satisfy basic values). Therefore, the environment does not include people's affective and cognitive interpretations of the environment, or their behavioral responses to it. Of course, the raw environment can not account for the reciprocal interactions between these factors.
In contrast, situations involve an actor (a consumer) who is acting (behavior) in an environment with some purpose (affect and cognition are present). Students should recognize that situations are structured, perceived, or constructed by consumers. That is, people define situations that are meaningful to them. In terms of the Wheel of Consumer Analysis, situations are meaningful "chunks" of the reciprocal interactions, over time, between environment, behavior, and affect and cognition.

Thus, consumers might describe a situation using terms from all three domains--environment, behavior, and affect and cognition. Situations often are defined in terms of the behavior involved (with the specific goals left unstated)--I am having lunch. I am shopping. I am watching TV. But behaviors are not random. People do have some purpose in mind for nearly all voluntary behaviors.

7. Use the Wheel of Consumer Analysis to describe how affect, cognitions and behaviors interact with environmental factors in a textbook purchase situation.

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  To help organize and focus the discussion, make a transparency of a matrix with the five situations down the left and the components of the Wheel of Consumer Analysis across the top.
  

The five situations are information acquisition, shopping, purchasing, consumption, and disposition. Students should "fill in" the cells by identifying the key aspects of the environment, the major behaviors, and the critical affective and cognitive factors in each situation.

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  If you discuss the question in class, make up a transparency showing a matrix of situations by controllable and uncontrollable factors.
  

Students should be able to recognize that some environmental factors are not controllable by the marketing manager. Behaviors associated with these characteristics would not be influenced. These factors could be considered aspects of the marketing environment. Other environmental factors can be controlled by the marketing manager, which could influence the probabilities of behavioral responses.