W2:The marketing enviroment

Check list

1. Describe the environmental forces that affect the company’s

ability to serve its customers

2. Explain how changes in the demographic and economic

environments affect marketing decisions

3. Identify the major trends in the firm’s natural and technological

environments

4. Explain the key changes in the political and cultural

environments

5. Discuss how companies can react to the marketing environment

1. Marketing enviroment
o 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.
 The Microenvironment: consists of the actors close
to the company that affect its ability to service its
customers. (direct impact on the company)
 The Macro-environment: consists of larger

societal forces that affect the microenvironment.

(indirect impact)
2. Microenviroment
o Actors in microenviroment:
a. The company:
o Relationships of the Marketing Management to other parts or
departments of the company.
o All groups should work in harmony to provide superior
customer value and relationships.
o Eg: A. G. Lafley became P&G’s chief executive in 2000. Back
then, P&G’s performance and profits were low and the stock was
way down. New product introductions had slowed to a trickle,
and no more than 15 percent of those wound up making
money. Mr. Lafley quickly cut jobs, sold declining brands like
Crisco shortening, and began reciting what became a familiar
mantra: Innovate, innovate, innovate. These days, he said, more
than half of Procter’s new products are commercially successful
and the products of P&G touched the lives of 3 billion people a
day worldwide.
b. Suppliers:
o Provision of necessary resources needed by the company to
produce its goods nd serivces.
o Treated as partners to provide customer value
o Marketing managers must watch:
  supply availability—supply shortages or delays,
 labour strikes, and other events that can cost sales or
damage customer’s satisfaction
 prices of materials
o Eg: Fast fashion: factories in Bangladesh (Bangladesh textile
factory – cheapest in the world)
c. Marketing Intermediaries:
Resellers
Distribution channel firms that help in finding customers or making sales
Wholesalers and retailers

Physical distribution firm

Help to stock and move goods from the factory to distribution places

Marketing services agencies

Help company to target and promote its product to the right market
Marketing research firms, advertising agencies, media firms and marketing consulting firms

Financial intermediaries
Help finance transactions or ensure against risks involved in buying or selling goods
Banks, credit companies, insurance companies and others.

d. Customers:
Consumer Business Resellers Government International

Individuals Firms, Resell at Government Buyers in

and companies profts agencies other
households Further Produce countries
Personal processing or public
consumption use in the
services
production
process

o Consumption trends in 2020:

e. Competitors:
o Must gain strategic advantages by positioning their offerings
strongly against opponents’ offerings in the minds of
consumers.
 o 2 main sources of competitors:
 Direct: from manufacturers of similar products
 Indirect: dissimilar product that satisfy same need
f. Publics:
o Any group that has an actual or potential interest in or
impact on a firm’s ability to achieve its objecives.
o Has duties to satisfy the public:
 Financial publics: influence the company’s ability to
obtain funds.
 Media publics: carry news, features, and editorial
opinions.
 Government publics: Management must take
government developments into account.
 Local publics: include neighbourhood residents and
community organizations.
 Citizen-action publics: include consumer
organizations, environment groups, and minority
groups
 General public: The general public’s image of the
company affects its buying.
 Internal publics: include workers, managers, volunteers,
and the board of directors.
3. Macroenviroment
a) Demographic enviroment: the study of human populations in
terms of size, age, gender and other statistics.
Demographic trends: age, family structure, geographic
education shifts, educational characteristics and population
diversity.
 o 3 largest age groups:
 Baby Boomers: 1946 – 1964
 Generation X: 1965 – 1976
 The Millenials (Gen Y): 1977 – 2000
b) Economic enviroment
o Consists of factors that affect the purchasing power and
spending aptterns
 Changes in income
 Changes consumer spending patterns
c) Technological enviroment
o Most dramatic forces in changing the marketplace
o Creates new products and opportunities, and kills off
older products.
d) Political/Legal enviroment
o Laws, government agencies and pressure groups that
influence or limit various organizationsand individuals
in a given society
o 3 main purposes:
  Protect companies from unfair cometition
 Protect consumers from unfair business practices
 Protect the interests of society from unbridled
business behaviour
e) Cultural enviroment:
o Consists of institutions and other forces that affect a
society’s basic values, perceptions and behaviours.
o People grow up in a world that shapes their basic beliefs
and vlues
o They absorb a view that defines their relationships with
other.
f) Respnding to the Marketing Enviroment:

4. SWOT analysis:
o The SWOT analysis: summary of the external and internal
analyses, highlighting the critical issues that must be
addressed by the marketing plan. When the SWOT analysis
is completed, the firm has a clear idea of its current
situation.
o Strengths (S) & Weaknesses (W): internal assessments of the
firm’s current capabilities and address questions such as:
 Strengths: What are our core competencies/What do
we do best? What advantages do we have over
competitors? What do customers think the
organisation does best? Etc.
 Weaknesses: What areas of the business need the most
improvement? How do customers think we could
 improve our business? Compared to competitors,
what is the organisation’s reputation in the
marketplace? Etc.
o Opportunities (O) & Threats (T): external assessments of
the firm’s marketing environment. Typically, O and T
emerge from environmental forces and their potential
impact on the brand’s future survival or demise. O and T
address questions such as:
 Social: What major social and lifestyle trends will
have an impact on the firm?
 Demographics: What impact will forecasted trends
in the size, age, profile, and distribution of
population have on the firm?
 Economic: What major trends in economic policy,
taxation, income sources will have an impact on the
firm?
 Political and Legal: What laws are now being
proposed that could affect marketing strategy and
tactics?
 Competition: What new competitive trends seem
likely to emerge?
 Technological: What major technological changes are
occurring that affect the firm?
 Ecological: Are the firm’s products, services, and
operations environmentally friendly? Etc.