Chapter 3

The Marketing Environment

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Copyright ©2022 John Wiley & Sons Canada, Ltd.

 Learning Objectives
1. Discuss the 2 major components of the marketing
environment—the micro-environment and the macro-
environment.
2. Identify the 7 main components of the micro-
environment.
3. Identify the 5 main components of the macro-
environment (SPENT).

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 1. The Marketing Environment
The combination of controllable and uncontrollable forces
that affect a marketing decision.
1. Micro-Environment: the internal environment
o Anything that directly affects or is directly affected by the
marketing managers decision
2. Macro-Environment: the external environment
o Have more indirect impact on the company’s marketing
strategy
o Less controllable than the
micro-environment

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 The Micro-
Environment (1)
1. Market (collection of buyers and sellers)
• Market share: sales of one brand divided by the total
sales in a market.
• Established market (stable competitors & customers)
• Evolving market (changing rapidly)
2. Company
3. Customers (The opposite partner, of the seller, in
an exchange)
• End consumers: purchase product for personal use
• Resellers: don’t use product; buy to exchange with
others
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 4. Competitors
The Micro- • Primary competitors: Brands in the same market
targeting the same customer group
Environment • Secondary competitors: Offers different products
that could be substituted for your product
(2) • Unexpected competitors: offer same core benefit
with completely different product

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 The Micro-
Environment (3)
5. Suppliers (Companies that
provide materials or components
that are used in final products)
6. Intermediaries (Companies that
perform functions that help
connect the company to the
customer)
7. Publics (include groups not
directly involved in the business
that have an interest in the
business)
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 Influences
• Company: most directly controllable
of all potential influences
• Customers: the most important micro-environment element
• Competitors: three types of competitors in any given market
• Suppliers: companies are increasingly choosing suppliers who echo or
enhance their marketing goals for strategic advantage.
• Intermediaries: the most common intermediaries offer marketing
support, providing financing support to customers or logistic services
including transportation or warehousing.
• Publics: for example, investors don’t have an immediate role in the
business, but they do have an influence since the company must take
into consideration how their actions will impact investors.

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 3. The Macro-Environment (SPENT)
S - Social/Cultural Forces
P- Political/Regulatory/Legal Forces
E - Economic/Financial Forces
N - Natural/Environmental Forces
T - Technological Forces

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 Social/Cultural Forces
• Customers are the most important
element in the micro-environment.
• Trends related to the customers are
most important in the macro-
environment.
• Several cultural trends affect
marketing.
• Different generations view the world
differently.
• Shift in diversity
• Healthy and active living trend
• Time-poor convenience seekers
• Eco-conscious consumers

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 Generations
The changing importance and relative influence of
these groups are significant for marketing practice.

Figure 3.6

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 Diversity
The South Asian population is growing faster than any other group, and one in
five Canadians is now considered a member of a visible minority.

Figure 3.7 Diversity in Canada’s Ethnic Backgrounds

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 Political/Regulatory/Legal Forces
TABLE 3.1 Representative Canadian Legislation Affecting Marketing

Legislation Marketing Implication

Federal Competition Act Prevents anti‑competitive practices in the marketplace.
Protects consumers and businesses from the misuse of digital technology, including
Canadian Anti-Spam Legislation
spam and other electronic threats.

Federal Personal Information Protection and Governs how businesses collect, use, and disclose personal information (e.g.,
Electronic Documents Act (PIPEDA) customer data, in the course of commercial business).

Provincial Freedom of Information and In BC and Ontario, these Acts set out the access and privacy rights of individuals as
Protection of Privacy Acts they relate to the public sector.

Provincial Privacy Legislation (Alberta, British These three provinces have general private-sector laws that have been deemed
Columbia, Quebec) substantially similar to PIPEDA.

Allows individuals a limited right of access to personal information about themselves

Federal Access to Information Act and Federal
held in government records and sets out rules and fair practices for the management
Privacy Act
of personal information by federal institutions.

Provincial consumer protection legislation

Safeguards consumers against unfair practices in the marketplace, including
(e.g., Ontario Consumer Protection Act,
consumer product packaging and labelling; anti-competitive practices, such as price
British Columbia Business Practices and
fixing and misleading advertising; privacy complaints; and more.
Consumer Protection Act)

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Political/Regulatory/Legal Forces (con’t)
TABLE 3.1 Representative Canadian Legislation Affecting Marketing

Legislation Marketing Implication

Protects any original work as soon as it is “fixed in any material form.” The
Copyright Act
legislation protects the expression of an idea but not the idea itself.
Trademarks Act Provides protection to trademarks by statute.
Requires that pre-packaged consumer products bear accurate and meaningful
Consumer Packaging and Labelling Act
labelling information to help consumers make informed purchasing decisions.
Governs the production, import, export, transport across provinces, and sale of
Food and Drugs Act
food, drugs, contraceptive devices, and cosmetics.
Canada Consumer Products Safety Act Protects consumers by addressing or preventing dangers to human health or safety.

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 Economic Forces
• The economic environment includes financial and
monetary influences on marketing.
• Income represents how much money a person receives,
whereas wealth represents how much a person has
accumulated in financial resources over time.
• Consumer purchasing behaviour
1. Consumer income
2. Inflation
3. Recession

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 1. Consumer Income

How much money customers have

to spend is based on two related
but separate factors — income and wealth.

Figure 3.10

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 2. Inflation
• Inflation pressures
consumers to make more
economical purchases &
still maintain their
standard of living
• Marketers must be very
cognizant of inflation on
consumer’s ability to
purchase

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 3. Recession
• A period of economic activity
characterized by negative growth
• In a recession, consumers consider
the price–value relationship
deliberately before making
purchases

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Natural/Environmental Forces

• Primarily includes issues

related to natural resources
and sustainability.
• Environmental corporate social
responsibility aims to reduce
any damaging effects on the
environment from a company’s
processes.
• Sustainability: not using up
natural resources; companies
use the term to refer to efforts
to create more environmentally
friendly approaches to doing
business.

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 Technological
Forces
Important element of the marketing
environment:
• Companies have new ways to
interact with customers
• Customers can interact with each
other
• Review companies
• Offer advice
• Customers can help design and
fund products
Advances happen at a rapid pace
Paradox of Technology: technology
can offer both benefits and negative
consequences at the same time in a
market for both customers and sellers.
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 SPENT Forces Activity
• Conduct a SPENT Forces Analysis for Tim Hortons. Describe 2 facts/trends
for each, if it is positive/neutral/negative for Tim Horton’s and an idea to
overcome or take advantage of it using the Marketing Mix (4 Ps).
Force Facts/Trends Positive/ Marketing Ideas (4 Ps)
Neutral/
Negative

1. Social/Cultural Time poor convenience Positive Offer new combo meals for on-the-go
seekers

2. …
Political/Regulatory/Legal

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