THE MARKETING

ENVIRONMENT
PRESENTED BY
NATHIE E. MASEKO
 BUSINESS ENVIRONMENT
 Every business is affected by the world
around it or its environment.
 The business environment is constantly

changing (dynamic) and marketers must

be aware of these changes because they
could have a major impact on the
company.
MARKETING ENVIRONMENT
 The marketing environment can be
divided into two components:
 The Internal Environment
 The External Environment
 INTERNAL ENVIRONMENT
 The internal environment consists of the
organisation itself, and over which
management has almost complete control
through the decisions they make.
 It comprises:
A. The Organisational Structure

B. The Organisational Culture

C. The Organisational Resources

D. The Organisational Processes
 INTERNAL ENVIRONMENT
 The above variables (factors) are said to
be controllable since they are directly
affected by what management decide and
what employees do
 The variables also constitute the strengths
and weaknesses of the organisation of
which marketere must be aware when
deciding on strategies to compete.
 EXTERNAL ENVIRONMENT
The external environment comprises all
forces (factors) outside the organisation
that may directly or indirectly have an
impact on it.
These factors are known to be
uncontrollable since the organisation
usually cannot manage (control) them.
 EXTERNAL ENVIRONMENT
The factors of the external environment
provide the organisation with
opportunities (conditions that are
favourable or helpful to the organisation)
and threats (conditions that are harmful
or hostile to the organisation).
 EXTERNAL ENVIRONMENT
 The external environment is made up
two components:

1. The Micro Environment/ Task

Environment

2. The Societal Environment (Macro

environment)
 THE MICRO / TASK
ENVIRONMENT
The Micro /Task Environment consist
of all the forces that have a direct
influence or directly affect the day to day
operations of the organisation.
Problems in the micro/task environment
usually affect the short-term decision
making of marketers
 THE MICRO / TASK
ENVIRONMENT
 Variables in the task environment
include:
1. Customers (consumers or clients):
who are the users of the organisation’s
products or services. They are very
important to the organisation because
their decision to buy or not to buy
directly affects the company’s sales
revenue and ultimately its survival.
 THE MICRO / TASK
ENVIRONMENT
2. Suppliers: are organizations that provide
the company with resources (inputs) ( raw
materials, funds, labour, services,
equipment and energy) needed to be
productive.
 Suppliers directly affect the organisation
with the quality of goods or services
provided, the cost of the goods and
timeliness of delivery.
 THE MICRO / TASK
ENVIRONMENT
Intermediaries:- organisations that
distribute goods and services from
manufacturer/producer to end-user i.e.
wholesalers, retailers, agents, brokers and
spaza shops.
 Intermediaries can demand lower prices for the
goods and services the company produces.
 Intermediaries also control customers’ access
to the products and services the company
produces
 THE MICRO / TASK
ENVIRONMENT
 Competitors:- Organisations that produce
the same or similar products/services as the
company. Theses organisations compete
against the company for customers and needed
resources in the external environment.
 THE MICRO / TASK
ENVIRONMENT
Others variables in the Task Environment
include:
Government:- stipulates laws and regulation
for doing business in the country
Labour Unions:- employee representatives
formed to create good labour relations at the
work place
Media :- any form of mass communication
that can make or destroy the company’s image
THE MICRO / TASK
ENVIRONMENT
Financial Institutions:- banks, insurance
companies, building societies that provide
companies with capital. Companies also deposit
revenues in the banks which is lent to individuals
Employees- the people employed by the company
to carry out management and operational activities
 Shareholders- owners or shareholders of the

company who expect marketing activities to

considerably increase the return on their
investment.
 THE MACRO / SOCIETAL
ENVIRONMENT
The Societal Environment:- consist of all
the forces that indirect affect the operations of
the organisation.
It can create a climate under which the
organisation has to perform its activities and to
which it may have to respond
It may result in the formation of other groups
or individuals who then may become
stakeholders, competitors, customers or
suppliers
 THE MACRO / SOCIETAL
ENVIRONMENT
VARIABLES IN THE SOCIETAL
ENVIRONMENT INCLUDE:
Political Environment-: refers to the politics
of the country, the type of government and
how stable is it.
Political events such as social unrest, disorder,
armed conflicts have an strong impact on the task
environment i.e. materials could be scarce, value
of the currency could drop
 THE MACRO / SOCIETAL
ENVIRONMENT
 Economic Environment:- refers to such
factors as the exchange rate, inflation,
interest rates, unemployment and trade
cycles, which have an impact on the costs of
production and the selling prices of goods and
service.
 THE MACRO / SOCIETAL
ENVIRONMENT
 Sociocultural Environment- refers to the
changing values, beliefs and lifestyles of the
society in which the business operates.
 Society is becoming more and more health
conscious
 Paying more attention to environmental issues

i.e. pollution, global climate, ozone layer (this

means organisations must consider the effects of
their actions to the natural environment)
 THE MACRO / SOCIETAL
ENVIRONMENT
Sociocultural Environment
 Demographics- the different subgroups that
exist in a given population.
 Family Structure

 Age distribution

 Geographic Distribution

 Income Distribution

 Ethnic Composition
 THE MACRO / SOCIETAL
ENVIRONMENT
 The Technological Environment- refers
to the equipment and processes that develop as
a result of scientific and industrial knowledge.
 The advancement in Technological has led to

the creation of new products, advanced

production techniques, and better ways of
managing and communicating.
Environmental Variables
 The Managerial Environment
 The dynamics of environment will differ from
organisation to organisation.
 Some organisations face static environments
 Stable and Simple (associated with low levels of
uncertainty)
 Some organisations face dynamic
environments
 Dynamic and Complex (associated with high
levels of uncertainty)
 Basic Types of Managerial
Environment
S Factors in environment are Factors in environment are
I
 few  few
M
 quite similar to each other  somewhat similar to each other
P  basically the same over time  continually changing
L
E Example: Soft-drink distributors Example: Fast-food outlets

C Factors in environment are Factors in environment are

O
M  numerous  numerous
P  not similar to each other  not similar to each other
L  basically the same over time  continually changing
E Example: Basic food production Example: Computer firms
X firms

STABLE CHANGING
 PREPARING FOR
ENVIRONMENTAL CHANGES
1. Marketers must develop techniques and
methods for collecting, sorting through,
and interpreting information about the
environment (Environmental Scanning)
 Environmental Scanning can help
Marketers identify opportunities and
threats that might impact the
organisation.
 PREPARING FOR
ENVIRONMENTAL CHANGES
2. Developing strategic responses to the
environment (adapting an existing
strategy or craft a new strategy
altogether)

3. Another type of response is to adapt or

redesign the organisational structure of
the company