The Marketing Environment

Chapter 3

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Key Environments

Marketing Environment The actors and forces that

affect a firm’s ability to build and maintain successful relationships with customers.

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Key Environments

Aspects of the marketing environment: Microenvironment:

• Actors close to the company that affect its ability to serve its customers

Macroenvironment• Larger societal forces that affect the

microenvironment

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Actors in the Microenvironment

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Marketing must consider other parts of the organization including finance, R&D, purchasing, operations and accounting

Marketing decisions must relate to broader company goals and strategies

Microenvironment

ActorsActors

1. The company2. Suppliers3. Marketing

intermediaries4. Customers5. Competitors6. Publics

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Marketers must watch supply availability and pricing

Effective partnership relationship management with suppliers is essential

Microenvironment

ActorsActors

1. The company2. Suppliers3. Marketing

intermediaries4. Customers5. Competitors6. Publics

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Help to promote, sell and distribute goods to final buyers

Include resellers, physical distribution firms, marketing services agencies and financial intermediaries

Effective partner relationship management is essential

Microenvironment

ActorsActors

1. The company2. Suppliers3. Marketing

intermediaries4. Customers5. Competitors6. Publics

Marketing Intermediaries

• Help find customers- Wholesalers & retailers

• Help to stock & move goods- transportation firms

• Help to target & promote products to right customers- ad agencies

• Help finance transactions & insure against risk- banks 3 - 8

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The five types of customer markets•Consumer•Business•Reseller•Government• International

Microenvironment

ActorsActors

1. The company2. Suppliers3. Marketing

intermediaries4. Customers5. Competitors6. Publics

Customers

• Consists of individuals & households- buy for personal use

• Buy for further processing

• Buy for resell to make profit

• Governmental agencies buy to produce public service or to transfer to others

• Includes above all3 - 10

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Conducting competitor analysis is critical for success of the firm

A marketer must monitor its competitors’ offerings to create strategic advantage

Microenvironment

ActorsActors

1. The company2. Suppliers3. Marketing

intermediaries4. Customers5. Competitors6. Publics

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A group that has an actual or potential interest in or impact on an organization

Seven publics include:•Financial•Media•Government•Citizen-action•Local•General• Internal

Microenvironment

ActorsActors

1. The company2. Suppliers3. Marketing

intermediaries4. Customers5. Competitors6. Publics

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Publics• Influence financing• Carry news,

features• Influence product

liability & safety• Influence

marketing decisions- environmental groups

• Community relationship officer maintains relationship

• Public image affects buying

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Major Macroenvironmental Forces

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Demographic Environment

Demographic Environment: The study of human populations

in terms of size, density, location, age, gender, race, occupation and other statistics

The changing nature of family Geographic shifts in population A better educated population

Economic Environment

Economic environment:•Consists of factors that affect consumer purchasing power and spending patterns.•Subsistence economies- they consume most of their own agricultural & industrial output.•Industrial economies- rich markets for different sorts of goods.

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Natural EnvironmentNatural Environment:

Involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities

Trends Shortages of raw materials Increased pollution Increased government

intervention

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Technological Environment

The most dramatic force shaping our destiny

Rapidly changing force which creates many new marketing opportunities but also turns many existing products extinct

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Political EnvironmentConsists of laws, government agencies and pressure groups that influence or limit various organizations and individuals in a given society

Legislation affecting businesses worldwide has increased

Laws protect companies, consumers and the interests of society

Increased emphasis on socially responsible actions

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Cultural Environment

Made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviors.