Chapter Two
Marketing Environment
2.1. Concept of Marketing environment
the actors and forces outside marketing affect
marketing management’s ability to build and
maintain successful relationships with target
customers.
the combination of external and internal factors and
forces that affect company’s ability to establish a
relationship and serve its customers.
Marketers must be environmental trend trackers and
opportunity seekers.
Marketers have two special aptitudes: Marketing research
and marketing intelligence.
a. Marketing research
The scientific process of collecting, analyzing,
interpreting, tabulating and diminishing market
data to satisfy needs and wants of customers.
b. Marketing intelligence
the systematic collection and analysis of publicly
available information about consumers, competitors,
and developments in the marketing environment.
Aimed at:
i. improving strategic decision making by
understanding the consumer environment,
assessing and tracking competitors’ actions.
ii. providing early warnings of opportunities and
threats.
2.2. Internal environment
all forces and factors inside the organization which
affect its marketing operations.
can be controlled.
It has 5m components :
1. Men: both skilled and unskilled workers.
2. Minutes: time taken for the processes of the business.
3. Machinery: required equipment by the business.
4. Materials: required factors of production or supplies r
by the business.
5. Money: financial resource used to purchase
machinery, materials, , and pay the employees.
2.3. External Environment
Marketers have less or no control over.
Comprises micro and macro marketing environment.
a. Micro environment (Task Env’t)
the actors close to the company that affect its ability
to serve its customers.
forces and factors are directly related to the business.
Includes:
1) Company: designing marketing plans.
2) Suppliers: provide resources needed by the company.
3) Customers: the most important actors in the
company’s microenvironment.
4) Intermediaries
promote, sell, and distribute products to final
buyers.
They include resellers, physical distribution
firms, marketing services agencies, and financial
intermediaries.
5) Competitors: provide greater customer value and
satisfaction than its competitors do.
6) Publics. any group that has an actual or
potential interest or impact on an organization’s
ability to achieve its objectives.
b. Macro Environment (Broad Env’t)
the larger societal forces that affect the micro
environment.
constitutes factors and forces affecting the
industry as a whole but don’t have a direct effect on
the business.
They are:
Demography
Economic
Socio-cultural
Political
Technological
Natural
1) Demography: size, density, location, age, gender, race,
occupation, religion,, education and so on.
2) Economic: factors affecting consumers’ purchasing
power and spending patterns.
3) Natural: involves needed inputs by marketers or are
affected by marketing activities.
4) Technological: forces creating new technologies,
creating new product and market opportunities. It is
the most dramatic force now shaping our destiny
5) Political and Social: laws, legislations, government
agencies, and pressure groups.
6) Socio-cultural: institutions affecting society’s values,
perceptions, preferences, and behaviors.
2.3. Responding to the marketing Environment
There are three kinds of companies regarding their
response to the marketing environment.
These are:
1. Makers
those who make things happen.
defining strategy to understand their environment.
taking proactive stance toward marketing
environment.
2. Watcher
those who watch things happen.
react and adapt uncontrollable element.
simply watching and reacting environmental events,
and take aggressive actions to affect the public and
forces in their marketing environment.
2.4. Features Of Marketing Environment
Specific forces: customers and investors directly
affect the business’s working
general forces: social, legal, technological, or political
factors indirectly affect the business’s working.
Complex
Dynamic
Uncertain
Relative