Chapter 2

MARKETING

ENVIRONMENT

Marketing EnvironmentMarketing EnvironmentAll the actors and forces influencing the

company’s ability to transact business effectively with it’s target market.

◦MicroenvironmentMicroenvironment - forces close to the company that affect its ability to serve its customers.

◦MacroenvironmentMacroenvironment - larger societal forces that affect the whole microenvironment.

The Marketing EnvironmentThe Marketing Environment

Company

Demographic

Economic

Natural

Technological

Political

Cultural Company

Customers

Intermediaries

Suppliers

Competitors

Publics

The Microenvironment

Company

Customers

Publics Suppliers

Competitors Intermediaries

Forces Affecting a Company’s Ability to

ServeCustomers

The Company’s The Company’s MicroenvironmentMicroenvironment

Company’s Internal EnvironmentCompany’s Internal Environment- functional areas such as top management, finance, and manufacturing, etc.

SuppliersSuppliers - provide the resources needed to produce goods and services.

Marketing IntermediariesMarketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers.

The Company’s The Company’s MicroenvironmentMicroenvironment

CustomersCustomers - five types of markets that purchase a company’s goods and services (individual, business, government, international and reseller

CompetitorsCompetitors - those who serve a target market with similar products and services.

PublicsPublics - any group that perceives itself having an interest in a company’s ability to achieve its objectives.

Forces Effect on firmCompany Finance department allocated the budget for

marketing activities, pricing decisionTop management decide the overall objective that effect to marketing objectiveOperation- effect to product decision, quality

Customer Is what marketing all about – needs and want, demand

Public Ability to get fund to develop and market product, publicity

Supplier Price, quality and supply of product – customer satisfaction

Competitors Positioning of the product or offering – being better quality and value

Intermediaries

Marketing value delivery system- how the product being sold, promote, delivered

The Company’s The Company’s MacroenvironmenMacroenvironmentt

DemographicDemographic - monitors population in terms of age, sex, race, occupation, location and other statistics.

EconomicEconomic - factors that affect consumer buying power and patterns.

NaturaNatural - natural resources needed as inputs by marketers or that are affected by marketing activities.

The Company’sThe Company’sMacroenvironmentMacroenvironment

TechnologicalTechnological - forces that create new product and market opportunities.

PoliticalPolitical - laws, agencies and groups that influence or limit marketing actions

CulturalCultural - forces that affect a society’s basic values, perceptions, preferences, and behaviors.

FORCES EFFECT ON FIRMNatural resources

Shortage of supply of raw material- effect on production

Economy Affect consumer buying , spending and business cycle – changes of pattern from prosperity economic condition to recession.

Demography Is a major interest to marketer because it involve people- his factor effect on consumer buying behavior

Technology Helps organization to improve the quality of product- effect on consumer satisfaction, competition- focus on R&D

Politic and legal

Effect on how organization should operate such as packaging, pricing, advertising etc. All activities involve law and regulation covered.

Culture Very important for international market.

The MacroenvironmentThe Macroenvironment

Demographic

Technological

Cultural Economic

Political Natural

Forces that ShapeOpportunities

and Pose Threatsto a Company

Demographic TrendsDemographic TrendsChanging Age StructurePopulation is getting older

Changing Family StructureMarrying later, fewer children,

working women, and nonfamily households

Geographic ShiftsMoving to the urban to sub urban

Increased EducationIncreased college attendance

and white-collar workers

Growing Ethnic and Racial Diversity

Economic EnvironmentEconomic Environment

Changesin Consumer

SpendingPatterns

EconomicDevelopment

Changes in IncomeKey

EconomicConcerns for

Marketers

Natural Natural EnvironmentEnvironment

Factors Affecting

the Natural

Environment

More GovernmentIntervention

Shortages of Raw Material

Increased Costsof Energy

Higher PollutionLevels

Technological EnvironmentTechnological EnvironmentRapid Pace of

ChangeHigh R & D

Budgets

Focus on MinorImprovements

IncreasedRegulation

Issues in the TechnologicalEnvironment

Political EnvironmentPolitical Environment

GreaterConcern for

Social responsibility

IncreasedLegislation

Changing Enforcement

KeyTrends in the

PoliticalEnvironment

Marketing environment are important to understand because ;◦It offer both opportunity and threat-

SWOT and PESTEL analyis.◦Helps marketer to revise and adapt

marketing strategies to meet new challenges

◦The environment often occur at rapid pace.