Class Exercise: Marketing Environment

1. Demography does not include ……………………………

(a) Lifestyle (c) Occupation
(b) Age (d) Race

2. Which of the following is NOT a factor of a company’s microenvironment?

(a) Suppliers (c) Publics
(b) Technology (d) Competitors

3. An example of the Micro environment for “SingTel” is …………………………….

(a) Demographic (c) Customer
(b) Political (d) Environmental

4. The …………………. analysis is a process that helps you in analysing the macro-environment. Put the
following choices in order to spell out this acronym. A few of the environments it focuses on include
social, political and economic.
(a) PEST / SEPTE/ PESTL (c) None of the above
(b) SWOT (d) All of the above

5. The …………………..consists of larger social forces that affect all players in the environment.
(a) Microenvironments (c) None of the above
(b) Macro-environment (d) Both (a) and (b)

6. A company’s macro-environment includes factors associated with …………………………….

(a) political environment, cultural environment, competitors, publics
(b) demographic, economic, political and the cultural environments
(c) public, demographics, economic environment, and cultural environment
(d) suppliers, customers, competitors, and publics

7. Demographics help define characteristics of a group based on their lifestyle, personality and
social class. (T/F)

8. The …………………………..is the immediate environment that effects the companies ability to
serve customers.
(a) Microenvironments (c) None of the above
(b) Macro-environment (d) Both (a) and (b)

9. Examples of demographics include all of the following, except………………

(a) Education (d) Age
(b) Social class (e) Gender
(c) Race (f) Occupation

10. Which of the following macro-environment has the most dramatic changes in marketing environment?
(a) Legal and Political environment (c) Technological environment
(b) Economy environment (d) Social-cultural and demographic
1
11. The ………………………. has potentially affecting environment in building and maintain relationship
with its target markets.
(a) Microenvironments (c) None of the above
(b) Macro-environment (d) Both (a) and (b)

12. The company’s staff are part of its …………………………. public.

(a) General (c) Citizen-action
(b) Local (d) Internal

13. A company’s ……………………. consists of its suppliers, marketing intermediaries, customers,

competitors and public.
(a) Macro-environment (c) Business environment
(b) Microenvironment (d) Marketing environment

14. What do you understand by the following terms in Macro-environment?

(i) Legal – Political Environment
(ii) Demographic Environment
(iii) Culture Environment
(iv) Technological Environment
(v) Economy environment

15. Define the following terms in Microenvironment: Provide an example for each
(i) Suppliers
(ii) Customers
(iii) Competitor
(iv) Publics

Defining key terms and concepts

1. How would you define a company’s marketing environment?

2. Define the two broad types of marketing environment.

(a) Micro-environment
(b) Macro-environment

3. Briefly describe each of the six elements in a company’s micro-environment, identify the key
components of each one, and indicating how each can affect a company’s marketing decisions.
(a) The company
(b) Suppliers/vendors:
(c) Marketing intermediaries:
(d) Customers:
(e) Competitors
(f) The Publics

2
4. Define the following terms in the macro environment and identify three (3) significant changes or
potential changes that could affect marketers in building relationship with target markets.

(a) Demographic
(b) Economic
(c) Natural
(d) Technological
(e) Political or legal
(f) Cultural and social

READING

 Macro environment (PESTL)

1. Demographic forces refer the study of human populations in term of size, density, location, age, gender,
race, occupation and other statistics. The demographic environment is of major interest to marketers because
it involves people, and people make up the market. Marketers need to keep close track of demographic
trends and development in their markets, both at home and abroad. They track changing population, age
structures, the nature of ethnic markets, educational standards, household patterns and geographical shifts in
populations.

2. Economic forces consist of factors that affect consumer purchasing power and spending patterns. These
factors include current income level, prices, saving, debt and credit availability. Changes in major economic
variables such as income, cost of living, interest rates, and saving and borrowing patterns have a large
impact on the market place. Economics forces will determine the level of investment, spending, and saving.
Marketers need to attune their marketing program to fit the spending power of its local market. The type of
products being made on offer will reflect the general economic standard of living in the market.

3. Technological forces are perhaps the most dramatic force now shaping our destiny. Technology has
released such wonders as antibiotics, organ transplants, notebook computer, phablets, smart phone and the
Internet. New technology changes the way firms do business and it also brings new business or
opportunities, for example, internet.

4. Political forces consist of law, government agencies, and pressure group that influence or limit various
organizations and individuals in the given society. Political and legal forces create opportunities or
otherwise “close the door” on marketers in a given market. Political factors refer to the systems of
government, such as central control (DPRK), to free enterprises in countries such as Japan, South Korea and
Singapore. Political forces determine the stability of the market economics and affect investment climates
and consumer outlook.

5. Cultural forces are made up of institutions and other factors that affect a society’s basic values,
perceptions, preferences, and behaviours. People grow up in a particular society that shapes their basic
beliefs and values. They absorb a world view that defines their relationships with others. Culture is like a
filter that moderates consumer’s perceptions, attitudes, and behaviours and how they respond to the firm’s
marketing program.

3
6. Natural forces involve the natural resources that are needed as inputs by marketers or that are affected by
marketing activities. Environmental concerns have grown steadily during the past three decades. Marketers
should be aware of several trends in the natural environment, like growing shortage of raw materials,
increased pollution, increased government intervention in natural resources management. Concern for the
natural environment has spawned the so-called green movement that are developing environmentally
sustainable strategic and practices in an effort to creates a world economy that the planet can support
indefinitely.

 Microenvironment

1. Suppliers: Suppliers or vendors form an important link in the company’s overall customer value delivery
system. The suppliers provide the resources needed by the company to produce its goods and services. If the
suppliers are having problems (e.g. employees went on strike, shortage of stocks, delay in delivery and the
like), it affects the company directly. Marketing managers must watch supply availability. They also
monitor the price trends of their key inputs. Most marketers today treat their suppliers as partners in creating
and delivering customer value.

2. Customers: The company needs to study five types of customer market closely. Consumer markets consist
of individuals and households that buy goods and services for personal consumption. Business markets buy
goods and services for further processing or for use in their production process. Reseller markets buy goods
and services to resell at a profit. Government markets are made up of government agencies that buy goods
and services to produce public services. International markets consist of buyers in other countries, including
consumers, producers, resellers, and government. As consumers taste and preferences change, marketing
managers need to study the trends carefully.

3. Competitors: In today competitive environment, marketers must work harder to provide greater customer
value and satisfaction if it does not want to lose out to its competitors. Company must gain strategic
advantage by positioning their offers strongly against competitors’ offering in the mind of consumers. No
single competitive marketing strategy is best for all companies. Each firm should consider its own size and
industry position compared to those of its competitors. Competitors’ price, quality, location, size, reputation
would affect firms in creating customer relationship with customers.

4. Marketing Intermediaries: Marketing intermediaries help the company to promote, sell, and distribute its
goods and to final buyers. These are people who fall into the groups of resellers, physical distribution firms,
marketing services agencies and financial intermediaries.

Resellers are distribution channel firms that help the company find customers or make sales to them. These
include wholesalers and retailers who buy and sell merchandise. Physical distribution firms help the
company to stock and move goods from their point of origin to their destinations. Working with
warehousing and transportations firm, a company can then decide the best way to transport, store, and ships
its goods at the most cost efficient way. Marketing services agencies are the marketing research firms,
advertising agencies, media firms, and marketing consulting firms that help the company target and promote
its products to the right markets. Financial intermediaries help finance transactions or insure against the
risks associated with the buying and selling of goods.

4
Marketing intermediaries form an important component of the company’s overall value delivery system. It
must be partnered effectively to optimize the performance of the entire system. Today’s marketers recognize
the importance of working with their intermediaries as partners rather than simply as channels through
which they sell their products.