MARKETING MANAGEMENT N4

SUMMARY MODULE 2

THE MARKETING ENVIRONMENT

 Top management

- The general management of a company heads the company. Top management makes
strategic decisions that that influence the long term existence of the company. The
organisational structure of the company, the mission setting and objectives, long-term
planning and organisational culture are determined by management and can hold strong
and weak points for the company.

 Marketing and external relations management

- Marketing management is responsible for the development of the product, determining

the price, the distribution and the promotion of the product, market share expansion and
after-sale service. Any of these aspects can hold strong and weak points for the
organisation.

- A weak marketing department can lead to the failure of the company and can thus be a
weak point for the organisation. An innovative marketing department and competitive
marketing strategy can be a strong point and lead to phenomenal growth for the
organisation.

 Financial management

- Financial management is responsible for the provision of capital, the cash flow situation.
Cost control and maintaining good relations with financial organisation and investors.

- Finance is the backbone of any organisation. It can be seen as a strong point for the
company when the organisation is financially sound and finance is well managed.

 Human resource management

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 - Management of manpower is known as human resource management. It concerns the
management of the personnel of the organisation. The marketing environment is a key
element in motivating, skills development and training.

- Employees form the heart of the organisation. If the company has loyal, skilled, hard-
working and purposeful employees, it can be seen as a benefit to the company.

 Operational and purchasing management

- The determining of quality standards, control, management of raw materials, the

development of facilities and stock management are the responsibilities of the
operational, purchasing and material manager.

- These functions are of cardinal importance for the continued existence and purposeful
functioning of the organisation. If they are managed well, they can count as one of the
strong points of the enterprise, but the opposite can developed if they are badly managed.

 Information management

- Information management is responsible for the supply of internal information for decision
making, planning, control and cost calculation. If inaccurate information is supplied to
management, wrong decisions will be taken, cost calculations can be faulty and planning
can be a total failure. If these elements are managed correctly, they can be an advantage
to the organisation and can be seen as a true strong point.

 consumers

- They represent capital, labour, skills, and entrepreneurship to the company in the form
of human resources. In exchange, the company offers products and services that satisfy
the needs and request of consumer.
- Consumers are important in the organisation, because company’s try by all means to
satisfy them.

Classification of consumer market

- End user market; final consumers that buy goods and services for personal
consumption.
- Industrial market; organisations that buy products to produce other products or
facilitate the running of their businesses.
- Reseller market; wholesalers and retailers that buy goods to resell at a profit.
- Government market; local, provincial and national authorities that buy product to fulfil
their obligations.

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 - International market; foreign consumers, manufacturers, resellers and government
that buy from local organisations.

 suppliers

- Suppliers are the persons or organisations who offer stock in terms of products,
services, advertising assistance, financing and advice to the company.
- suppliers’ offer the organisation to buy stock in bulk, then the organisation re arrange
stock and sell it to customers in small quantity.

 intermediaries

- Consist of organisations that firstly reduce the number of transactions between

consumer and producer, and secondly contribute to a large extent to the marketing
activities that take place in the marketing channel.
- An intermediary bridges the gap of distance between manufacturers and consumers.

 competitors

- Competitors are the organisations who offer the same or similar as that of the
company. The company compete by lowering their price and therefore making it
difficult for the company to sell its products.

Competition does the following

- keep excessive profits in check

- encourage higher productivity
- encourages technological innovation
- leads to lower prices
- improves service

The external macro environment

 social environment

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 - Social environment is perhaps the most difficult external variable for marketing
managers to forecast, influence, or to integrate into marketing plans.
- Social environment includes our attitudes, values and lifestyle. social factors influence
the products people buy, the price people are prepared to pay for products, the
effectiveness of specific promotions, and how, where, and when consumers purchase
products.

Characteristics that customers are looking for in purchasing a product

- dependability
- simple maintenance
- durability
- dependable brand
- low price

 political environment

- Political environment refers to the variables determining the political situation in a

country. Marketers, like any business person, prefer a situation of relative political
stability in a country.
- Every organisation is influenced in some way or the other by constantly changing
politics in the country. These political influences have major impact on the variables in
the market.
- The government can be seen as a creator of order. The laws and regulations of the
country are represented in the constitution of the country.

 economic environment

- The economic variables in a country can have great influence on the market of the
organisation. It is therefore the task of the marketing management to be aware of the
present state of the economy and of the influence it might have on the market.
- there are three variables that can influence the economic environment to a substantial
degree namely:
 income of the consumer
 inflation
 recession

during recession marketing management can apply the following strategies

- Improve existing products and introduce new products; the objective is to reduce
production time, waste and the cost of raw material. During times of recession the

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 demand increases for lower-prices products, product that operate efficiently, and
products that provide value and are supported by client service.

- Retain and expand client services; during times of recession, the enterprise have found
that consumers tend to purchase fewer products, but that the demand for spare parts
and the servicing of equipment serve as a source of income.

- Emphasise product representing high quality; the consumer with little money will be
looking for products of high quality, durability and usability.

 technological environment

- In many instances, technology can be used as a weapon against times of recession and
high inflation. New machinery and equipment, for example, can cut production costs
and be very beneficial asset to the enterprise.
- It is the duty of the enterprise to always be aware of the most recent technology being
used by competitive enterprises.

 physical environment

- The physical environment can be seen as the environment from which the organisation
gets its resources, such as raw material, energy and food. it is also the environment in
which companies spill their waste.
- the following trends are noticed in the natural environment:
 Shortage of raw material and energy and food.
 The increase in cost of energy.
 Increase in pollution levels.
 Increased government involvement in the protection of natural resources.

 international environment

- Companies that operate internationally find themselves in a far more complex

business environment because every country has its own unique environmental
factors, with its technology, culture, laws, politics, economic and legal environment
and competitors, different from those of the local country.

Marketing management is responsible for the following duties in the marketing environment

 to identify opportunities and threats in the marketing environment

 To do market research on all variables in the marketing environment and to write a report
on them.
 To identify consumers needs.

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 To develop a need-satisfying product directed at the consumer.
 To develop an acceptable price for the product or service so that it would be profitable for
the company.
 To develop strategies for the distribution of the product from the producer to consumer.
 To develop strategies for the promotion of the product to inform, persuade and to remind
the consumer.
 To recruit, train, compensate and motivate marketing personnel for the task which they
have to complete.
 To provide an organizational structure so that the marketing department can function
efficiently.
 To coordinate marketing activities within the department, within the firm and with
external organization.
 To exercise control over the activities of the marketing department.

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