Chapter 2

Marketing Environment

 Meaning of marketing environment

 Types of marketing environment

 Company environment

• Macro environment

• Micro/industry environment

Meaning of Marketing Environment

 Means a situations within which a business enterprise has to operate

 consists of the actors and forces outside marketing functions that affects
marketing management’s ability to build and maintain successful
relationships with target customer.

 Is the sum total of political, economic, social, technological and other forces
which moves around the business enterprise

 Marketing environment in general offers both opportunities and threats.

Types of marketing environment

A firm is exposed to:

1. External environments

Macro environment

Micro environments

2. Internal Environments
The Macro Environment
• Are the factors up on which the manager has no full control.
• can have a major impact on the actors in the task environments.
 They are interrelated dynamic forces that are subjected to change at an
increasing
• The general environmental forces that can have a major impact include:
1. Demographic environment
2. Economic environment
3. Natural environment
4. Technological environment
5. Cultural Environment
Demographic Environment
• Demography is the study of human populations in terms of size, density,
location, age, gender, race, occupation, education, and other statistics.
• Changes in the world demographic environment have major implications
for business.
• Analyzing them help us anticipate the needs and wants of the population.
Economic Environment
• The economic environment consists of factors that affect consumer
purchasing power and spending patterns.
• The economic environment is a significant force that affects the marketing
activities of any organization.
A marketing program is affected by stage of the business cycle, inflation,
unemployment, interest rates, income, tax rate
Cultural Environment
• The cultural environment is made up of institutions and other forces that
affect a society’s basic values, perceptions, preferences, and behaviors.
People grow up in a particular society that shapes their basic beliefs and
values
Natural Environment -Ecosystem
• involves the natural resources that are needed as inputs by marketers or
that are affected by marketing activities.
• Marketers should be aware of several trends in the natural environment.
– The first involves growing shortages of raw materials.
– -A second environmental trend is increased pollution. Industry will
almost always damage the quality of the natural
 Technological Environment
• The technological environment refers to new technologies, which create
new product and market opportunities.
• The technological environment is perhaps the most dramatic force now
shaping our destiny.
• It has tremendous impact on our life-styles, our consumption patterns, and
our economic well being.
• New technologies create new markets and opportunities. Marketers should
watch the technological environment closely.
Political Environment
• The political environment consists of laws, government agencies, and
pressure groups that influence or limit various organizations and individuals
in a given society.
• Well-conceived legislation can encourage competition and ensure fair
markets for goods and services.
• Legislation affecting business around the world has increased steadily over
the years.
The macro environment-
• They are described separately, but their interactions will lead to new
opportunities and threats.
For example:
• Explosive population growth (demographic) leads to more resource
depletion and pollution (natural), which leads consumers to call for more
laws (political-legal), which stimulate new technological solutions and
products (technological) that, if they are affordable (economic), may
actually change attitudes and behavior (social-cultural).
The Task Environment
• The task environment includes the immediate actors involved in producing,
distributing and promoting the offering.
• The firm can manage these environment
• The main actors are:
• Suppliers
• Distributors
 • target customers
• Competitors
• the public.
Suppliers
• form an important link in the company’s overall customer value delivery
system.
• are organizations and individuals that provide the resources needed to
produce goods and services.
• are critical to an organization's marketing success and an important link in
its value delivery system.
• 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.
Marketing Intermediaries
• help the company to promote, sell, and distribute its goods to final buyers.
The intermediaries between an organization and its markets constitute a
channel of distribution. These include:
• Resellers are distribution channel firms that help the company
find customers or make sales to them.
• Physical distribution firms help the company to stock and
move goods from their points of origin to their destinations.
• 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.
Customers
• Organizations closely monitor their customer markets in order to adjust to
changing tastes and preferences
• Each target market has distinct needs, which need to be monitored.
 • The company needs to study five types of customer markets closely.
1. Consumer markets consist of individuals and households that buy goods
and services for personal consumption.
2. Business markets buy goods and services for further processing or for use
in their production process.
3. Reseller markets buy goods and services to resell at a profit.
4. Government markets are made up of government agencies that buy
goods and services to produce public services or transfer the goods and
services to others who need them.
5. International markets consist of buyers in other countries, including
consumers, producers, resellers, and governments.
Competitors

*Marketers must gain strategic advantage by positioning their offers strongly

against competitors’ offerings in the minds 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.

* Adopting the marketing concept mean that an organization must provide

greater customer value than its competitors.

• Three levels of competition exist.

1. Direct competitors are firms competing for the same customers with the
similar products

2. Competition exists between products that can be substituted for one

another

3. Competition exists among all organizations that compete for the

consumer’s purchasing power.

Publics

A public is any group that has an actual or

potential interest in or impact on an organization’s

ability to achieve its objectives.

 Financial publics influence the company’s ability to obtain funds.

 Media publics carry news, features, and editorial opinion.
 Government publics regulate public safety, truth in advertising, and
other matters.
 Citizen-action publics include consumer organizations, environmental
groups, minority groups, and others.
 Internal publics include workers, managers, volunteers, and the
board of directors
The Internal Environment (The Company)
• In designing marketing plans, marketing management takes other
company groups into account. These interrelated groups form the
internal environment.

• All departments need to think customer and work together.

• Marketing managers must work closely with other company

departments

• The marketing executives need to

• Coordinate company internal marketing activities

• Coordinate marketing with other functional areas