MGT 2306MARKETING MANAGEMENT

Lesson 4

LESSON 4 OBJECTIVES

• Examine the marketing environment by which all organizations operate within

• Distinguish between Internal and External environmental factors that will affect an organization’s marketing efforts

WHAT’S A MARKETING ENVIRONMENT?

• Actors and forces that affect a firm’s ability to build and maintain successful relationships with customers.

External EnvironmentExternal EnvironmentWhat the Firm Might DoWhat the Firm Might Do

Internal EnvironmentInternal EnvironmentWhat the Firm Can DoWhat the Firm Can Do

SustainableCompetitiveAdvantage

The 2 MARKET ENVIRONMENTS AN ORGANIZATION FACES

THE MICROENVIRONMENT

company suppliers

Consumerscompetitors

Public

Micro

MarketingIntermediaries

The micro environment refers to the business itself and to all the challenges that come from inside the business. There are altogether 6 factors involved.

COMPANY

• The company’s vision, mission, objectives are all aligned, made known to everyone in the organization and receives everyone’s commitment (Iltizam).

SUPPLIERS

• An organization is dependent on its suppliers for the quantity, quality, timing and information in order to be able to serve its customers

COMPETITORS

• A firm needs to monitor within its own industry market leaders, challengers, followers and nichers to always know its standing in the market and its customers.

PUBLIC

• Firms have to be profitable but also socially responsible to its stakeholders, the community, special interest groups and the government

DISTRIBUTION CHANNEL (ALSO KNOWN AS MARKETING INTERMEDIARIES)

• Firms rely on intermediaries for distribution coverage, speed, efficiency and special services in distributing the company’s products to where customers will buy them

CONSUMERS

• Understanding the behavior of end-users and organizational users and continue to develop products that will satisfy them

THE MACROENVIRONMENT

Company

CulturalEconomic

Demography

Natural

Technology

Legal

The major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies.

DEMOGRAPHY• Lots to do with world population data:

- size : Population quantity & growth rate

- density : Where most people stay

- location : specific places where people converge

- age : Work, income & spending

- gender : More males/females in occupation

- race : cultural diversity & influences on purchasing

ECONOMY

• A country’s economy affects consumer purchasing power, spending patterns and what to spend on with greater emphasis on value

NATURAL

• Concerns on natural resources, increased pollution and usage of pesticides

TECHNOLOGICAL

• Rapid pace of advancement, new opportunities but rapid obsoletes, R&D costs

LEGAL

• Increased legislations to protect businesses as well as consumers, changes in governmental agency enforcement, increased emphasis on ethical behavior and social responsibility

CULTURAL

• Composed of institutions and other forces that affect a society’s basic values, perceptions and behaviors

RESPONDING TO THE MARKETING ENVIRONMENT

Reactive : Passive acceptance and adaptation

- Companies design strategies that avoid threats and capitalize upon opportunities.

Proactive : Environmental management

- Use of lobbyists, Public relations, advertorials, lawsuits, complaints and contractual agreements to

influence environmental forces.