Marketing Environment

Chapter 2

By Rafique Ahmed

Principles of Marketing Chapter 2The Marketing Environment

Microenvironment

Macroenvironment

Everybody has some marketing experience

The marketing environment is a set of forces that affects the ability to build and maintain successful relationships with customers

Environment

All the actors and forces influencing the company’s ability to transact business effectively with it’s target market.

It Includes:Micro EnvironmentMacro Environment

- Forces close to the company that affect its ability to serve its customers.

Microenvironment

- larger societal forces that affect the whole microenvironment.

Macro Environment

The Marketing Environment

It consists of the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers.

Marketing Environment

Company

Demographic

Economic

Natural

Technological

Political

Cultural Company

Customers

Intermediaries

Suppliers

Competitors

Publics

The Microenvironment

CompanyCompany

CustomersCustomers

PublicsPublics Suppliers Suppliers

CompetitorsCompetitorsIntermediariesIntermediaries

Forces Affecting a Company’s Ability to

ServeCustomers

Forces Affecting a Company’s Ability to

ServeCustomers

The Company’s Microenvironment

Suppliers –

They provide the resources needed to produce goods and services.

Marketing Intermediaries –

They help the company to promote, sell, and distribute its goods to final buyers.

Customers –

Five types of markets that purchase a company’s goods and services.

CompanyCompany

ConsumerMarkets

InternationalMarkets

GovernmentMarkets

BusinessMarkets

ResellerMarkets

Competitors – Those who serve a target market with similar products and services.

Publics – Any group that perceives itself having an interest in a company’s ability to achieve its objectives.

The functional areas inside a company that have an impact on the marketing department’s plans.

Company’s Internal Environment-

Marketing

Production

Manufacturing

Acco

un

ting

R & D

Fina

nce

Top

Man

agem

ent

Macro environment

The MacroenvironmentThe Macroenvironment

DemographicDemographic

TechnologicalTechnological

CulturalCultural EconomicEconomic

PoliticalPolitical NaturalNatural

Forces that ShapeOpportunities

and Threatsto a Company

Forces that ShapeOpportunities

and Threatsto a Company

Demographic

Monitors population in terms of age, gender, race, occupation, location and other statistics.

Demographic -

Economic Environment

factors that affect consumer buying power and spending patterns.

Economic Environment -

Changesin Consumer

SpendingPatterns

Changesin Consumer

SpendingPatterns

EconomicDevelopment

EconomicDevelopment

Changes in Income Changes in Income

KeyEconomic

Concerns forMarketers

KeyEconomic

Concerns forMarketers

Rapid Changes

Interest Rates

Inflation

Business Life cycle

Business & Industry Growth

Global Economy

Natural Environment

Natural Environment-

Natural resources needed as inputs by marketers or that are affected by marketing activities.

Shortage of raw materials

Increased pollution

Disasters

Natural Environment

Factors Affecting

the Natural

Environment

More GovernmentIntervention

More GovernmentIntervention

Shortages of Raw Material

Shortages of Raw Material

Increased Costsof Energy

Increased Costsof Energy

Higher PollutionLevels

Higher PollutionLevels

Technology Environment

Technological Environment

Forces that create new technologies, creating new product and market opportunities.

Communications capabilities

◦Cellular communications

◦The internet Virtual reality

Main Problem:It can make your product

obsolete.

Political Environment

Laws, government agencies and pressure groups that influence marketing actions.

Political Environment

GreaterConcern for

Ethics

GreaterConcern for

Ethics

IncreasedLegislation

IncreasedLegislation

Changing Enforcement

Changing Enforcement

KeyTrends in the

PoliticalEnvironment

KeyTrends in the

PoliticalEnvironment

Cultural Environment

Cultural Environment-

Forces that affect a society’s basic values, perceptions, preferences, and behaviors.

Responding to the Marketing Environment

Reactive:

Acceptance and Adaptation ◦Companies design strategies that avoid threats and capitalize upon opportunities.

Proactive: Environmental Management◦ Use of PR, lawsuits, complaints, and contractual

agreements to influence environmental forces.