Marketing Environment

Marketing Environment consists of the actors and

forces outside marketing that affect marketing
management’s ability to build and maintain successful
relationships with target customers.
Marketers need to be good at building relationships
with customers, others in the company and external
partners. To do this effectively, they must understand
the major environmental forces that surround all of
these relationships.
The marketing environment is made up of a
microenvironment and macro-environment. The
microenvironment consists of the actors close to the
company that affect its ability to serve its customers-
the company, suppliers, marketing intermediaries,
customer markets, competitors, and various publics.
The macroenvironment consists of the larger societal
forces that affect the microenvironment- demographic,
economic, natural, technological, political and cultural
forces.
The Company’s Microenvironment
Marketing management’s job is to build relationships
with customers by creating customer value and
satisfaction. In the marketing process, there are many
actors such as other company departments, suppliers,
marketing intermediaries, customers, competitors, and
various publics, which combine to make the company’s
value delivery network.
The company
In designing marketing plans, marketing management
takes other company groups into account- i.e., top
management, finance, R&D, purchasing, operations, and
accounting. All these interrelated groups form the
internal environment of company. Top management
sets company’s mission, objectives, strategies and
policies. Marketing managers make decisions within
the strategies and plans made by top management.
The Company’s Microenvironment
Finance is concerned with finding and using firms
funs to carry out the marketing plan.
The research and development department focuses
on designing safe and attractive product.
Purchasing worries about getting supplies and
materials.
Operations is responsible for producing and
distributing the desired quality and quantity of
products.
Accounting has to measure revenues and costs to help
marketing know how well it is achieving its
objectives.
The Company’s Microenvironment
Suppliers
Suppliers form an important link in the company’s
overall customer value delivery system. They provide
the resources needed by the company to produce its
goods and services. Supplier problems can seriously
affect marketing. Marketing managers must watch
supply availability, supply shortage or delays, labor
strikes and other events can cost sales in the short run
and damage customer satisfaction in the long run.
Marketing managers also monitor the price trends of
their key inputs. Rising supply costs may force price
increases that can harm the company’s sales volume.
Most marketers’ today treat their suppliers as
partners in creating and delivering customer value.
The Company’s Microenvironment
Marketing Intermediaries
Marketing intermediaries are the firms that help the
company to promote, sell, and distribute its goods to
final buyers. They include:
a. Resellers
b. Physical distribution firms
c. Marketing service agencies
d. Financial intermediaries
Resellers are distribution channel firms that help the
company find customers or make sales to them. These
include wholesalers and retailers, who buy and resale
merchandise. Selecting and partnering with resellers is
not easy. Manufacturers now face large and growing
resellers organizations frequently having enough power to
dictate terms or even shut the manufacturer out of large
markets.
The Company’s Microenvironment
Physical distribution firms help the company to
stock and move goods from their points of origin to
their destinations. Working with warehouse and
transportation firms, a company must determine the
best ways to store and ship goods, balancing factors
such as costs, delivery, speed and safety.
Marketing services agencies are the marketing
research firms, advertising agencies, media firms,
and marketing-consulting firms that help the
company target and promote its products to the right
markets. When the company decides to use one of
these agencies , it must choose carefully because
these firms vary in creativity, quality, service, and
price.
The Company’s Microenvironment
Financial intermediaries include bank, credit
companies, insurance companies and other businesses
that help finance transactions or insure against the
risks associated with the buying and selling of goods.
Most firms and customer depend on financial
intermediaries to finance their transactions.

In conclusion, like suppliers, marketing

intermediaries form an important component of the
company’s overall value delivery system. In its quest
to create satisfying customer relationships, the
company must do more than just optimize its own
performance. It must partner effectively with
marketing intermediaries to optimize the performance
of the entire system.
The Company’s Microenvironment
Customers
The company needs to study five types of customer
markets closely.
Consumer markets consists of individuals and
households that buy goods and services for personal
consumption.
Business markets buy goods and services for further
processing or for use in their production process.
Reseller markets buy goods and services to resell at a
profit.
Government markets are made up of government
agencies that buy goods and services to produce public
services or transfer the goods and services to others
who need them.
Finally, International markets consist of these buyers
in other countries, including consumers, producer,
resellers and governments.
Each market type has special characteristics that call
for careful study by the seller.
The Company’s Microenvironment
Competitors
The marketing concept states that to be successful, a
company must provide greater customer value and
satisfaction than its competitors do. Thus, marketers
must do more than simply adopt to the needs of target
consumers. They also must gain strategic advantage by
positioning their offerings strongly against competitor’s
offerings in the minds of consumers.
No single competitive marketing strategy is best for all
companies. Each firm should consider its own size and
industry position compared with those of its
competitors. Large firms with dominant positions in an
industry can use certain strategies that smaller firms
cannot afford. But being large is not enough. There are
winning strategies for large firms, but there are also
losing ones. And small firms can develop strategies that
give them better rates of return than large firms enjoy.
 The Company’s Microenvironment
Publics
The company’s marketing environment also includes
various publics.
A public is any group that has an actual or potential
interest in or impact on an organizations ability to
achieve its objectives. We can identify seven types of
publics, such as-
 Financial publics influence the company’s ability to
obtain funds. Banks, investment houses, and
stockholders are the major financial publics.
 Media publics carry news, features and editorial
opinion. They include newspapers, magazines and
radio and television stations.
 Government publics- Management must take
government developments into account. Marketers
must often consult the company’s lawyers on issues of
product safety, truth in advertising, and other matters.
 The Company’s Microenvironment
 Citizen-action publics- Consumer organizations,
environmental groups, minority groups, and others
may question a company’s marketing decisions. Its
public relations department can help it stay in touch
with customer and citizen groups.
 Local publics include neighborhood residents and
community organizations. Large companies usually
appoint a community relation’s officer to deal with the
community, attend meetings, answer questions, and
contribute to worthwhile causes.
General public- A company needs to be concerned
about the general public’s attitude toward its product
and activities. The public’s image of the company
affects its buying.
 Internal publics include workers, managers,
volunteers, and the board of directors. Large
companies use newsletters and other means to inform
and motivate their internal publics. When employees
feel good about their company, this positive attitude
spills over to external publics.
The company’s Macroenvironment
The company and all of other actors operate in a
larger macroenvironment of forces that shape
opportunities and pose threats to the company. There
are six major forces in the company’s
macroenvironment. Each of these forces is given as:
Demographic Environment
Demography is the study of human populations in
terms of size, density, location, age, gender, race,
occupation and other statistics. The demographic
environment is of major interest to marketers because
it involves people, and people make up markets.
The explosive world population growth has major
implications for business. A growing population means
growing human needs to satisfy. Depending on buying
power, it may also mean growing market opportunities.
The company’s Macroenvironment
Economic Environment
Markets require buying power as well as people. The
Economic environment consists of factors that affect
consumer purchasing power and spending patterns.
Nation’s vary greatly in their levels and distribution of
income. Some countries have subsistence economies-
they consume most of their own agricultural and
industrial output. These countries offer few market
opportunities. At the other hand, are industrial
economies, which constitute rich markets for many
different kind of goods. Marketers must pay close
attention to major trends and consumer spending
patterns both across and within their world markets.
Changes in major economic variables such as income,
cost of living, interest rates, savings and borrowing
patterns have a large impact on the market place.
Companies watch these variables by using economic
forecasting.
The company’s Macroenvironment
Natural environment
The natural environment involves the natural resources that are
needed as inputs by marketers or that are affected by marketing
activities. In many cities around the world, air and water
pollution have reached dangerous levels. World concern
continues to mount about the depletion of the earth’s ozone layer
and the resulting ‘greenhouse effect’, a dangerous warming of the
earth.
Marketers should be aware of several trends (THREE) in the
natural environment. The first trend involves growing shortage
of raw materials. Air and water may seem to be infinite
resources, but some groups see long run dangers in case of forest,
food, oil, coal, and various minerals.
A Second environmental trend is increased pollution. Industry
will almost always damage the quality of natural environment.
Important issues are disposal of chemical and nuclear wastes, the
dangerous mercury levels in the ocean, the quantity of chemical
pollutants in the soil and food supply and pollution by
nonbiodegradable bottles, plastics, and other packaging materials.
A third trend is increased government intervention in natural
resource management. The governments of different countries
vary in their concern and efforts to promote a clean environment.
The company’s Macroenvironment
Technological Environment
It is the most dramatic force now shaping our destiny.
Technology has released such wonders as antibiotics,
organ transplants, note book computer, and the Internet.
Simultaneously it has released such horrors as nuclear
missiles, chemical weapons, and assault rifles. It has
released such mixed blessings as the automobile,
television, and credit cards. Our attitude towards
technology depends on whether we are more impressed
with its wonders or its blunders
New technology creates new markets and opportunities.
However every new technology replaces an older
technology. Thus marketers should watch the
technological environment closely. Companies that do not
keep up with technological change soon will find their
products outdated. They will miss new product and
market opportunities.
 
The company’s Macroenvironment
Political Environment
Marketing decisions are strongly affected by
developments in the political environment. The
political environment consists of laws, government
policies, and pressure groups that influence and limit
various organizations and individuals in a given
society.
Cultural Environment
The cultural environment is made up of institutions
and other forces that affect a society’s basic values,
perceptions, preferences, and behaviors. People grow
up in a particular society that shape their basic beliefs
and values. They absorb a worldview that defines
their relationships with others. The following cultural
characteristics can affect marketing decision making.
The company’s Macroenvironment
Persistence of cultural values. People in a given
society hold many beliefs and values. Their core
beliefs and values have a high degree of persistence.
These beliefs shape more specific attitude and
behaviors found in everyday life. Core beliefs and
values are passed on from parents to children and are
reinforced by schools, churches, business and
government.
Shifts in secondary cultural values. Although core
values are fairly persistent, cultural swings do take
place. Marketers want to predict cultural shifts in order
to spot new opportunities or threat. Several firms offer
futures forecast in this connection.
Peoples views of themselves. People vary in their
emphasis on serving themselves versus serving others.
Some people seek personal pleasure, wanting fun,
change and escape. Others seek self realization through
religion, recreation or the avid pursuit of careers or
other life goals.
The company’s Macroenvironment
People’s views of others. Recently it is observed a
shift from a “me society” to a “we society” in which
more people want to be with and serve others. More
and more, people are wanting to get out of the house
and be with others.
People’s views of organizations. People vary in their
attitudes toward corporations, government agencies,
trade unions, universities and other organizations. By
and large, people are willing to work for major
organizations and expect them, in turn, to carry out
societies work.
People’s views of society. People vary in their
attitudes toward their society,; patriots defend it,
reformers want to change it, malcontents want to leave
it. People’s orientation to their society influences their
consumption patterns and attitudes toward the market
place.
The company’s Macroenvironment
People’s views of nature. . People vary in their
attitudes toward the natural world. Some feel ruled by
it, others feel in harmony with it, and still others seek
to master it. A long-term trend has been people’s
growing mastery over nature through technology and
the belief that nature is bountiful. More recently,
however, people have recognized that nature is finite
and fragile, that it can be destroyed, or spoiled by
human activities.
People’s views of the universe. Finally, people vary
in their beliefs about the origin of the universe and
their place in it. People have been moving away from
materialism and dog-eat-dog ambition to seek more
permanent values- family, community, earth, faith,
and a more certain grasp of right and wrong (ethics).