Marketing environment consists of the

actors and forces outside marketing that

affects marketing management’s ability to
build and maintain successful relationships
with target customer.

Marketing environment in general offers

both opportunities and threats.
 These environmental forces enables the
marketers to make marketing strategies to
meet new marketing trends, challenges and
opportunities.

 The marketers must be good at customer

relationship management and partner
relationship management.

 For these the firm should understand the

major environmental forces that surround
all these relationships.
 Creates an increased general awareness of
environmental changes on the part of
management.
 Guides with greater effectiveness in matters
relating to government.
 Helps in marketing analysis and
designing/changing marketing mix.
 Suggests improvements in diversification
and resource allocations.

3
Factors
Influencing
Company’s
Marketing
Approach

4
 These are the factors up on which the
manager has no full control.
 These environments contain forces that
can have a major impact on the actors in
the task environments.

 They are interrelated dynamic forces that

are subjected to change and at an
increasing rate.

 The general environmental forces that can

have a major impact include:
 The major once include:

1. Demographic environment

2. Economic environment

3. Political environment

4. Natural environment

5. Technological environment

6. Cultural Environment
 Demography is the study of human populations
in terms of size, density, location, age, gender,
race, occupation, and other statistics.

 It involves people, and people make up

markets.

 Changes in the world demographic

environment have major implications for
business.

 The characteristics in this environment are

important to marketers because they are
closely related to the demand for many
products.
 They help us anticipate the needs and wants
of the population.

 Marketers keep close track of demographic

trends and developments in their markets,
both at home and abroad.

 They need to track changing age and family

structures, geographic population shifts,
educational characteristics, and population
diversity.
 The economic environment consists of
factors that affect consumer purchasing
power and spending patterns.

 People must have money to spend and be

willing to spend it.
 The economic environment is a significant
force that affects the marketing activities of
any organization.
 A marketing program is affected especially
by such economic factors as the current and
anticipated stage of the business cycle,
inflation, unemployment, interest rates, and
income.

 Changes in major economic variables have a

significant impact on the market place.

 How people deal with their money is

important to marketers.
 Nations vary greatly in their levels of
distribution of income.
◦ Subsistence economies are ones in which the
population consumes most of their own
agricultural and industrial output.
◦ Industrial economies are those with rich
markets for many different kinds of goods
 Value marketing has become the
watchword(aim or belief) for many marketers.
They are looking for ways to offer today’s
more financially cautious buyers greater
value.
 Marketers should pay attention to income

distribution as well as average income.

 The natural environment involves 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.

◦ The first involves growing shortages of raw materials. Air

and water may seem to be infinite resources, but some
groups see long-run dangers.

◦ A second environmental trend is increased pollution.

Industry will almost always damage the quality of the
natural environment.
◦ A third trend is increased government intervention in natural
resource management. The governments of different countries
vary in their concern and efforts to promote a clean
environment.
◦ Concern for the natural environment has spawned the so-called
green movement.

◦ Enlightened companies are developing environmentally

sustainable strategies and practices in an effort to create a
world economy that the planet can support indefinitely.
 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.
 Technological break through can affect
markets in three ways
 By starting entirely new industries.
 By radically altering, or virtually destroying existing
industries.
 By stimulating markets and industries not related to
the new technology.
 Advance in technology; also affect how marketing
is carried out.
 technology is mixed blessings
◦ improve our lives
◦ creating environmental and social problems
 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.

 Governments develop public policy to guide

commerce.

 Legislation affecting business around the

world has increased steadily over the years.
 Understanding the public policy implications of a particular
marketing activity is not a simple matter. Marketers must
work hard to keep up with changes in regulations and their
interpretations
 Business legislation has been enacted for a number of reasons.
◦ to protect companies from each other.
◦ to protect consumers from unfair business practices.
◦ to protect the interests of society against unrestrained
business behavior.

 Business is also government by social codes and rules of

professional ethics.
◦ Enlightened companies encourage their managers to look
beyond what the regulatory system allows and simply “do
the right thing.”
 ◦ The recent rash of business scandals and increased concerns
about the environment have created fresh interest in the issues
of ethics and social responsibility.
◦ The boom in e-commerce and Internet marketing has created a
new set of social and ethical issues. Online privacy issues are
the primary concern.

 To exercise their social responsibility and build more

positive images, companies are now linking
themselves to worthwhile causes.
 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.
◦ Core beliefs and values are passed on from parents to
children and are reinforced by schools, churches, business,
and government.
◦ Secondary beliefs and values are more open to change.

 Although core values are fairly persistent, cultural

swings do take place. Marketers want to predict
cultural shifts in order to spot new opportunities or
threats.
 The major cultural values of a society are
expressed in people’s views.
 The task environment includes the
immediate actors involved in producing,
distributing and promoting the offering.

 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.
 Suppliers are organizations and individuals that
provide the resources needed to produce goods
and services.
 They 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.
 Marketing intermediaries form an important
component of the company’s overall value
delivery 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.
 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. It is
imperative for an organization to know
their customers, how to reach them and
when customers' needs change in order to
adjust its marketing efforts accordingly.
 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.
 ◦ 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
- 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.
  Local publics include neighborhood residents and
community organizations.

 The general public may be concerned about the

company’s products and activities.

 Internal publics include workers,

managers, volunteers, and the board of
directors
◦ 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 man need to
 Coordinate company internal marketing activities
 Coordinate marketing with other functional areas
◦ He has to work in persuasion rather than authority

◦ Other departments resist bending their effort to

meet customer’s interest

◦ They stress on the importance of their tasks.

◦ They also need to identify the competencies,

capacities and resources of the organization.
◦ Many companies view the marketing
environment as an uncontrollable element in
which they must react and adapt. They passively
accept the marketing environment and do not try
to change it.
◦ Other companies take a proactive stance toward
the marketing environment.
A. Rather than simply watching and reacting, these
firms take aggressive actions to affect the publics
and forces in their marketing environment.
B. Such companies hire lobbyists to influence
legislation affecting their industries and stage
media events to gain favorable press coverage.

They press lawsuits and file complaints with

regulators to keep competitors in line.