ANALYZING THE MARKETING
ENVIRONMENT
Chapter 3
MARKETING ENVIRONMENT
• Consists of forces and actors outside marketing that affect marketing management’s
ability to build and maintain successful relationship with target customers
• Marketers must be environment trend setter and opportunity seeker
• Marketing environment consists of Micro environment and Macro environment
MICRO ENVIRONMENT
• Consists of the actors close to the company that affect its ability to engage
and serve its customers
• Effects specific business
• Can be controlled
• Has a direct impact on company’s daily operations
THE COMPANY
• While designing marketing plans, marketing department takes other
company groups into account such as top management, finance, R&D, IT,
operations, HRM and accounting
• All these interrelated groups make the internal environment
• Marketing managers must work closely with all other departments by taking
a lead
• They share the responsibility for understanding customer needs and creating
customer value
SUPPLIERS
• They provide the resources (input) needed by the company to produce its good and
services
• Supplier problems can seriously affect marketing
• Marketing managers should watch supply availability and costs
• Shortage of resources or delays, natural disasters and other events can costs sales
in the short run and damage customer satisfaction in the long run
• Rising supply costs may force price increases which harm the company sales
volume
MARKETING INTERMEDIARIES
• Entities that help the company promote, sell and distribute its products to final
buyers
• They include resellers, physical distribution firms, marketing services agencies and
financial intermediaries
• They are called intermediaries because they are in the middles of a series of firms
that distribute goods
• They help manufacturers distribute their products and help consumers easily find
and obtain the products
MARKETING INTERMEDIARIES
• Resellers are distribution channel firms that help the company find customers or
make sales to them. These include wholesalers and retailers that buy and re sell
merchandise
• Physical distribution firms help the company stock and move goods from their
points of origin to their destinations
• Financial intermediaries include banks, credit companies, insurance companies
and other businesses that help finance transactions or insure against the risks
associated with buying and selling of goods
• For example: Apple
COMPETITORS
• They are other businesses who offer more or less similar goods and services
to the customers
• A company must provide greater customer value and satisfaction than its
competitors do
• Thus marketers need to adapt to the changing demands of target customers
• They also gain strategic advantage by positioning their offerings strongly
against competitors offerings in the minds of customers
PUBLICS
• A public is any group that has an actual or potential interest in or impact on
an organization’s ability to achieve its objectives
• Financial public: this group influence the company’s ability to obtain funds.
Banks, investors and stockholders are the major financial publics
• Media public: this group carries news, features, editorial opinions and other
content. It includes TV stations, newspaper, magazines and blogs etc
• Government publics: marketers must consult the company’s lawyers on
issue of product safety, advertising and such related matters
• Citizen action public: public relation departments can help to stay in touch
with consumer and citizen groups. A company’s marketing decisions may be
questioned by consumer organizations, environmental groups minority
groups etc
• Internal public: includes workers, managers, volunteers and the board of
directors. Large companies use newsletter and other means to inform and
motivate their internal publics
• General public: a company need to be concerned about the general
public’s attitude towards its products
• Local publics: this group includes local community and organizations. Large
companies try to become responsible members of the local communities in
which they operate
CUSTOMERS
• Resellers markets buy goods and services to resell at a profit
• Government markets consists of government agencies that buy goods and
services to produce public services or transfer to others who need them
• International markets consists of those buyers in other countries
CUSTOMERS
• They are the most important actors in the company’s micro environment
• The aim of the entire value delivery network is to engage target customers
and create strong relationship with them
• Consumer markets consists of individuals and households that buy goods
and services for personal use
• Business markets buy goods and services for further processing or use in
their production process
MACRO ENVIRONMENT
• Effects the industry
• Cannot be controlled
• Has an indirect impact on company but direct impact on market conditions
• Includes demographics, technological, political, socio cultural and
environmental factors
• The major external and uncontrollable factors that influence an
organization’s decision making and affects its performance and strategies
ECONOMIC ENVIRONMENT
• Important to know the purchasing power of people, stability of economy,
fluctuation in prices organization offer to their customers
• Demand goes down during recession
• Higher the interest rate, lower the investment
• Economic growth
• Inflation rate
• Exchange rates
TECHNOLOGICAL ENVIRONMENT
• It refers to the state of technology in the areas of construction,
manufacturing, mining, transportation etc
• The progress of business depends upon the level of technology available
• Important determinant of success of firm as well as economic and social
development of nation
