Marketing Management –

BA3602
Nabeel Farooq
Nabeel.Farooq@szabist-isb.edu.pk
Analyzing the Marketing
Environment

LECTURE 3
OBJECTIVES
 Discuss the forces affecting marketing environment
 Microenvironment
 Macroenvironment
 Microenvironment  Macroenvironment
 Company  Demographics
 Suppliers  Economic
 Marketing intermediaries  Nature
 Competitors  Technology
 Publics  Politics
 Customers  Culture
Marketing Environment
Marketing Environment
The actors and forces outside marketing that affect
marketing management’s ability to build and maintain
successful relationships with target customers

 Marketing environment consists of a microenvironment

and macroenvironment
What should marketers do?
 Marketers must be environmental trend trackers
 Marketers should be opportunity seekers

 Every firm must organize and distribute a continuous flow

of information to its marketing managers
 Marketing information system
What should marketers do?
 Marketers should have two special aptitudes
 Disciplined methods
 Internal Records
 Marketing research
 Marketing intelligence
 They spend more time in customer and competitor
environments
 Internal Records
 Order-to-Payment Cycles
 Sales Information Systems
 Databases
 Marketing Intelligence: set of procedures and sources
that managers use to obtain information about
development in the marketing environment
 Train and motivate sales force to spot and report new
developments
 Motivate entities in value delivery network to pass important
information
 Mystery shoppers
 Take advantage of published data
 Collect information from the internet through independent forums,
feedback sites, customer complaint sites or public blogs
Microenvironment
 Microenvironment: consists of actors close to the
company that affect its ability to serve its customers
 Company
 Suppliers
 Marketing Intermediaries
 Customer Markets
 Competitors
 Publics
Microenvironment (contd.)
 Forces in microenvironment
Microenvironment (contd.)
COMPANY  COMPANY
 Concept of value chain  SUPPLIERS
 MARKETING
 Marketing management takes other
INTERMEDIARI
company groups into account ES
 Marketing managers must work closely  COMPETITORS
with other company departments  PUBLICS
 CUSTOMERS
 The whole company shares the
responsibility of understanding
customer needs and creating customer
value
Microenvironment (contd.)
SUPPLIERS  COMPANY
 Important aspect of customer value  SUPPLIERS
delivery network  MARKETING
INTERMEDIARI
 Supplier problems can seriously effect ES
marketing  COMPETITORS
 Problems due to suppliers can affect  PUBLICS
the company in the long-run  CUSTOMERS

 Treat suppliers as partners

Microenvironment (contd.)
MARKETING INTERMEDIARIES  COMPANY
 Important part of value delivery network  SUPPLIERS
 MARKETING
 Generally consists of firms that help the
INTERMEDIARIES
company to promote, sell and distribute  COMPETITORS
its goods to final buyers
 PUBLICS
 Resellers: include wholesalers and
 CUSTOMERS
retailers
Large resellers have much power to
dictate terms
Microenvironment (contd.)
 Physical distribution firms: help  COMPANY
company stock and move goods from  SUPPLIERS
their points of origin to their  MARKETING
destinations INTERMEDIARIES
 COMPETITORS
 PUBLICS
 Marketing service agencies: include
 CUSTOMERS
marketing research firms, advertising
agencies, media firms, consultancies
Microenvironment (contd.)
 Financial intermediaries: include  COMPANY
banks, insurance companies that help  SUPPLIERS
finance transactions  MARKETING
INTERMEDIARIES
 COMPETITORS
 Example: Coca-Cola as exclusive
 PUBLICS
beverage provider
 CUSTOMERS
 Studied the design of drive-through menu
boards to understand which layouts, fonts,
colors, letters, sizes induce customers order
more food
 www.cokesolutions.com
Microenvironment (contd.)
COMPETITORS  COMPANY
 Marketers must do more than simply  SUPPLIERS
adapting to the needs of target  MARKETING
INTERMEDIARI
consumers ES
 Gain strategic advantage against their  COMPETITORS
competitors  PUBLICS
 CUSTOMERS
Microenvironment (contd.)
PUBLICS: any group that has an actual  COMPANY
or potential interest in or impact on an  SUPPLIERS
organization’s ability to achieve its  MARKETING
objectives INTERMEDIARI
ES
 COMPETITORS
 Stockholders  PUBLICS
 Media  CUSTOMERS
 Environmental groups
 Community organizations
 Internal publics
Microenvironment (contd.)
CUSTOMERS  COMPANY
 Aim of the entire value delivery network  SUPPLIERS
is to satisfy the customers  MARKETING
INTERMEDIARI
ES
 Company may target any or all five  COMPETITORS
types of customer markets  PUBLICS
 Consumer markets  CUSTOMERS
 Business markets
 Reseller markets
 Government markets
 International markets
Macroenvironment
 Macroenvironment: consists of larger societal forces
that affect the micro-environment
 Demographics
 Economy
 Nature
 Technology
 Politics
 Culture
Macroenvironment (contd.)
 Forces in macroenvironment
 Demog Politica Techno Social-
Natural
raphics l-legal logy cultural
Explosive More Lead Stimulate new Change
population depletion of consumer to technological attitudes
growth natural call for more solutions and
resources laws behavior
Macroenvironment (contd.)
DEMOGRAPHICS: study of human  DEMOGRAPHICS
populations in terms of size, density,  ECONOMY
location, age, gender and other statistics  NATURE
 TECHNOLOGY
 POLITICS
 It involves people and people make up
markets  CULTURE

 Population growing at an explosive rate

 Poses challenges and opportunities
 Changes in demographics have major
implications on businesses
Macroenvironment (contd.)
 World population growth  DEMOGRAPHICS
 84% approx from developing countries  ECONOMY
 Microsoft’s pay-as-you-go FlexGo Program  NATURE
 Population age mix  TECHNOLOGY
 Pakistan’s median age 21.2 approx  POLITICS
 Sex ratio 105  CULTURE
 Ethnic and other markets
 Educational groups
 2/3 of world illiterate adults from 8 countries
 Household patterns
Macroenvironment (contd.)
ECONOMIC ENVIRONMENT:  DEMOGRAPHICS
Includes factors that affect consumer  ECONOMY
purchasing power and spending patterns  NATURE
 TECHNOLOGY
 POLITICS
 Nations vary greatly in their levels and
 CULTURE
distribution of income
 Industrial economies
 Subsistence economies
 Developing economies
Macroenvironment (contd.)
 Changes in consumer spending  DEMOGRAPHICS
 Lavish spending of American  ECONOMY
consumers  NATURE
 TECHNOLOGY
 2008/2009 recession
 POLITICS
 Adopted back-to-basics sensibility in
 CULTURE
their lifestyles and spending patterns
 Look for value
 Infiniti – car brand
 “make luxury affordable”
Macroenvironment (contd.)
 Income distribution  DEMOGRAPHICS
 Basis of segmentation as well  ECONOMY
 Created a tiered market  NATURE
 Eg: Opportunities if middle class is growing  TECHNOLOGY
 POLITICS
 Companies should take advantage of  CULTURE
changing economic conditions
Macroenvironment (contd.)
NATURAL ENVIRONMENT:  DEMOGRAPHICS
Involves the physical environment and  ECONOMY
natural resources needed as inputs by  NATURE
marketers or that are affected by  TECHNOLOGY
marketing activities  POLITICS
 Weather  CULTURE

 Natural disasters
 Earthquake and Tsunami in Japan affected
Sony and Toyota to meet their demand
Macroenvironment (contd.)
 Environmental sustainability concerns  DEMOGRAPHICS
have grown  ECONOMY
 Air and water pollution have reached  NATURE
dangerous levels  TECHNOLOGY
 POLITICS
 Shortage of raw materials  CULTURE
 Forests and food have to be used wisely
 Oil, coal, minerals pose serious problems

 Increased government intervention

Macroenvironment (contd.)
 Marketers, instead of opposing  DEMOGRAPHICS
regulations, should find solutions  ECONOMY
 Timberland  NATURE
 Wind-powered factory  TECHNOLOGY
 Earthkeepers made from recycled and organic  POLITICS
materials
 CULTURE
 Recyclable products
 Green movement
Macroenvironment (contd.)
TECHNOLOGICAL ENVIRONMENT:  DEMOGRAPHICS
Forces that create new technologies,  ECONOMY
creating new products and market  NATURE
opportunities  TECHNOLOGY
 POLITICS
 Robotic surgery
 CULTURE
 Smartphones
 Internet
 Nuclear missiles
 Chemical weapons
 Credit cards
Macroenvironment (contd.)
 New technologies create new  DEMOGRAPHICS
opportunities and new markets  ECONOMY
 NATURE
 TECHNOLOGY
 New technologies replace old
 POLITICS
technologies
 CULTURE

 Marketers should study the

technological environment closely and
prepare themselves for upcoming
trends
 Digital advertising
Macroenvironment (contd.)
POLITICAL ENVIRONMENT:  DEMOGRAPHICS
Consists of laws, govt. agencies, and  ECONOMY
pressure groups that influence or limit  NATURE
various organizations and individuals in a  TECHNOLOGY
given society  POLITICS
 CULTURE

 Sometimes new laws create new

business opportunities
 Recycling industry
Macroenvironment (contd.)
 Increase in Business Legislation  DEMOGRAPHICS
 To protect companies  ECONOMY
 NATURE
 From each other
 TECHNOLOGY
 Prevent unfair competition
 POLITICS
 CULTURE
 To protect consumers
 Consumer law
 Health and safety law

 To protect interests of society

 Consumer law
Macroenvironment (contd.)
 Growth of Special-Interest Groups  DEMOGRAPHICS
 NGOs lobby for rights of consumers, women,  ECONOMY
minorities  NATURE
 TECHNOLOGY
 POLITICS
 CULTURE
Macroenvironment (contd.)
CULTURAL ENVIRONMENT:  DEMOGRAPHICS
Institutions and other forces that affect  ECONOMY
society’s basic values, perceptions,  NATURE
preferences and behaviors  TECHNOLOGY
 POLITICS
 CULTURE
Macroenvironment (contd.)
 The persistence of cultural values  DEMOGRAPHICS
 Eg. American believe in individual freedom,  ECONOMY
hard work, success  NATURE
 Core beliefs: difficult to change
 TECHNOLOGY
 Secondary beliefs: easier to mold
 POLITICS
 Cultural swings take place:
 CULTURE
 hair styles, clothing norms

 Diminishing human interaction but mass

mingling

 Marketer should look for the changing cultural

trends