Wendmu A. (Ass. Prof.

of Management)
Email- Wendmu45@gmail.com

College
Chapter Two & Three
• Business and
Economics
Marketing Environment and MKIS
Department
• Management
Session objectives

 Describe the environmental forces that affect the company’s ability to serve its
customers.

 Explain how changes in the Macro environment affect marketing decisions.

 Discuss how companies can react to the marketing environment.

 The role of MIS & Marketing research for marketing

CLASS DISCUSSION
• Environment
• Marketing environment
• Microenvironment
• Macro environment
• MIS
• Marketing intelligence
• Marketing research
 Marketing Environment

• Company’s marketing environment consists of the actors and forces outside

marketing that affect marketing management’s ability to develop and maintain
successful relationships with its target customers.

• All forces that directly or indirectly influence marketing operation

• Has vital role in business…..marketing

• Environment offers both opportunities and threats.

• Marketing intelligence and research used to collect information about the environment.
 Environmental scanning

• Environmental scanning (Environmental Monitoring) – is the process of

gathering information regarding a company's environment, analysing it and
forecasting the impact of all predictable environmental changes.

• The major components of environmental scanning are:

• External Environmental analysis - Market analysis

• Customer Analysis - Company analysis

• Competitor analysis
 Studying the environment

• To identify what actors work with and against the company

• To describe what forces bring opportunities and pose threats

• To understand marketing and to develop effective marketing strategies

Structure of marketing environment

Demographic- Marketing Technological-

Economic Intermediaries Natural
Environment Environment

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M lan
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P
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A ark
Product

tin g
M

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Suppliers Place Price Publics
Consumers

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t io
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M Con

Promotion
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ta
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pl rk
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Im Ma
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Political- Social-
Legal Competitors Cultural
Environment Environment
 The Micro and Macro Environment

• Micro environment: consists of forces close to the company affect its ability to serve its
customer
• suppliers, consumers, competitors, marketing intermediaries, etc.

• short term effects.

• Macro Environment: consists of the larger societal forces that affect the whole
microenvironment
• demographics and economic conditions, socio-cultural factors, political and legal systems,
technological developments, etc.
• Log-term effect
Micro environment

Company

Publics Suppliers
Forces Affecting a
Company’s Ability to
Serve
Customers
Competitors Intermediaries

Customers
The company

Accounting HRM

marketing Company Finance

purchasing R&D
 Suppliers

• Provide resources needed to produce

goods and services.
• Important link in the “value delivery
system.”
• Most marketers treat suppliers like
partners.
Marketing Intermediaries:

• Help the company to promote, sell, and distribute its goods to

final buyers
• Resellers i.e. wholesalers and retailers

• Physical distribution firms: move g&s from origin to destination

• Marketing services agencies i.e. ad agencies, media firms, consultants

• Financial intermediaries i.e. banks, credit unions, insurance companies

 Customers

• They are reasons of marketing. Important question “who are our customers”?

• Six types of customer markets

Consumer market: individual & HH that buy G&S for personal and family consumption

Business market: buy G&S for further processing/production

Resellers: buy G&S to resell @ profit

Institutional mkt: made up of schools, hospitals, prisons etc. that provide G&S to people in
their care.

Government markets: buy G&S in order to produce public services to other who need them

International market: consists buyers in other countries

 Competitors
• Always offer customer value and satisfaction better than competitors do

• Must understand competitor’s strengths

• Must differentiate firm’s products and offerings from those of competitors

• Competitive strategies should emphasize firm’s distinctive competitive

advantage in marketplace
 Public
• 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: banks, investment houses, stockholders

• Media publics: newspapers, magazines, broadcasts

• Government publics:

• Citizen-action public:

• Local publics: neighbourhood residents

• General public:

• Internal public: workers, managers, BOD

Macro environment
Demographic

Cultural Economic
Forces that Shape
Opportunities
and Pose Threats
to a Company
Political
Natural

Technological
 Demographic environment
• Demography: study of human population in terms of size, density, age, race, occupation, religion etc.
• The demographic environment is of major interest to marketers because it involves, people, and people make up markets .
• The world’s large and highly diverse population poses both opportunities and challenges.
• As a result marketers basically focus on the following demographic issues.

• Changing age and family structures

• Geographic population shifts
• Educational Characteristics, and
• Population diversity
• Urbanization and migration
 Economic environment

• Marketers focus on Factors that affect consumer power and spending

patterns
• Changes in major economic variables such as income, cost of living, interest
rate, and savings and borrowing patters, business cycle have impact on the
market place.
 Natural environment
• Involves the natural resources that are needed as inputs by marketers or that are affected
by marketing activities.
• Marketers should be aware of four trends in the natural environments
• shortage of materials
• increased cost of energy
• increased pollution
• government intervention in natural resources management
• Global warming

• Depletion of earth’s Ozone layer

• Renewable energy
 Technological environment

• is perhaps the most dramatic forces now shaping our destiny

• Forces that create new technologies, creating new products and market
opportunities
The marketer should watch the following trends in technology:
• fast pace of technology
• concentration on minor improvements
• increased regulation
 Political environment

• Consists of laws, legislation, government agencies, and other rules and

regulation limit various organizations
• business legislation has three main purposes;
• to protect companies from unfair competition,

• to protect consumers form unfair business practices,

• to protect the interests of society against unrestrained business behaviour

 Cultural environment

• Forces that affect society's basic values, perceptions, preferences and behaviours.

• Global Environment
The global environment is also rapidly changing.
• The new concept of global village has changed how individuals and organizations relate to each other.
• The advent of worldwide terrorism has power to turn booming to stagnant economy
• The new migratory habits of the workforce
• Organizations like WTO, forces nations do business with each other
End of chapter Two!