Scanning the

Environment
 Outline
 Introduction
 The Company’s Microenvironment
 The Company’s Macroenvironment
 Introduction
Definition:
The Company’s environment consists of "the
actors and forces outside marketing that
affect marketing management's ability to
develop and maintain successful
transactions with its target customers"
Kotler et al, 1994
 Introduction (cont’d)
 Companies must evaluate both micro and macro-
environment to identify
 any trends that may affect their marketing strategies,
and
 opportunities that can be developed into competitive
advantages
Analysing the Macroenvironment
 Needs and Trends
 Fad – “unpredictable, short-lived, and without
social, economic, and political significance”
 Trend – more predictable and durable. E.g.
health awareness
 Megatrend – “large social, economic, political
and technological change that is slow to form
and once in place, influences us for some time”
 Some megatrends
 Urbanisation
 Smart city
 Generation Y
 Women Empowerment
 Rise of middle class
 Reverse Brain Drain
 Future Outsourcing hotspots
- Eastern & Central Asia,
Latin America
 N11 – BRIC, Bangladesh,
Indonesia, Egypt, Iran,
Mexico, Nigeria, Pakistan,
Philippines, South Korea,
Turkey, Vietnam
 Cloud computing
 Virtual world
 Robotics
 Satellite Technology
Company’s Microenvironment
Relates to the internal forces or forces close to the
company over which some control is possible
 Top management
 Other functions e.g. finance and accounting, R& D,
manufacturing and purchasing
 Suppliers
 Marketing intermediaries (channel partners)
 Customers
 Competitors
 Public
The Micro Environment
 Customers: needs,  wants and providing benefits for
their customers. Failure = failed business strategy.
 Employees: correct and motivated staff is essential to
strategic planning. Training and development, service
sector, competitive edge. (Cereality)
 Suppliers: Price of raw material affect the marketing
mix. Closer supplier relationships benefit strategy.
 Shareholders: inward investment for growth.
Satisfying shareholder needs can cause a change in
strategy. (Sharwoods+internet companies, Birds Eye)
 Media: Positive or adverse attention. Consumer
programs
 
 Company’s Macro-environment

 Relates to the larger forces having an

impact on society as a whole
 A company has little influence on these
forces and therefore can only adapt its
marketing mix to account for the resulting
opportunities and threats
Major forces of the macro-
environment
 Demographic
 Economic
 Natural
 Technological
 Cultural
 Political/legal
Demographic Environment
Demographic trends:
 Changing age structure
 Changing family structure
 Geographic shifts in population
 Higher education level & more white
collar job holders
 Increasing globalization of cities
 Economic Environment
Economic trends affecting consumers
buying power and spending pattern
 Change in per capital real income
 Disposable
 Discretionary
 Income distribution
 Savings & debt
 Consumer expenditures
 Change in interest rates and cost of living
 Natural environment
Natural trends include those natural
resources used in production or those
affected by marketing activities
 Raw material shortages
 Increase in energy cost
 Increase pollution levels
 Increase in Governmental intervention in
natural resource management
 Technological Environment
Consists of forces that affect new
technology, new product development
and market opportunities
 Faster pace of technological change
 Shorter PLC
 Higher R&D budgets
 Concentration on minor improvements
 Increased regulations
 Cultural Environment
Affect society's basic values, perceptions,
preferences and behaviors
 Views of – ourselves, others, society,
organizations, society, nature, universe
 Core cultural values and beliefs
 Sub cultures
Legal and Political Environment
Trends in the legal and political environment
include
 Increased legislation regulating business
 Singapore’s Fair Trading Act (impending)
 Changing government agency enforcement
 Growth of public interest groups
 Regional groupings
 ASEAN FTZ