DR.

HASSAN SOHAIB MURAD (Late)

 CR
Muzamil Khan
@
for updates

Email numan.aslam@umt.edu.pk
 Principles of Marketing

Philip Kotler, Gary

Armstrong

CHAPTER THREE
Analyzing the Marketing
Environment
 Chapter Learning Outcomes
Topic Outline

1. The Company’s Microenvironment

2. The Company’s Macroenvironment
3. Demographic Environment
4. Economic Environment
5. Natural Environment
6. Technological Environment
7. Political and Social Environment
8. Cultural Environment
9. Responding to the Marketing
Environment

Ch 3 - 2 Copyright © 2011 Pearson Education

 Marketing
Marketing Environment
Environment
All the actors and forces influencing the
company’s ability to transact business effectively
with it’s target market.

The marketing environment includes the actors

and forces outside marketing that affect
marketing management’s ability to build and
maintain successful relationships with
customers.
TYPES OF
MARKETING
ENVIRONMENT
Includes:
Microenvironment - forces close to the
company that affect its ability to serve
its customers.

Macroenvironment - larger societal

forces that affect the whole
microenvironment.
The
The Marketing
Marketing Environment
Environment
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3-7

Demographic

Company
Cultural Economic

Publics Suppliers
Company
Customers
Competitors
Political Natural
Intermediaries

Technological

 Copyright 1999 Prentice Hall

1.The MICRO Marketing 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 publics.

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The Company’s Microenvironment
• The company
• Suppliers
• Marketing intermediaries
• Customers
• Competitors
• Publics

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The Company’s Microenvironment
The Company
Internal environment includes:
• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting

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The Company’s Microenvironment

Suppliers
• Provide the resources to produce goods and services
• Treated as partners to provide customer value

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The Company’s Microenvironment
Marketing Intermediaries
• Help the company to promote, sell, and distribute its
products to final buyers
• Include:
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries

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The Company’s Microenvironment

Marketing Intermediaries
• Resellers are the distribution channel firms that help the
company find customers or make sales to them. These
include:
• Wholesalers
• Retailers
• Physical distribution firms are the distribution channel firms
that help the company to stock and move goods from their
points of origin to their final destination.

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The Company’s Microenvironment

Marketing Intermediaries
• Marketing service 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.
• Financial intermediaries include banks, credit companies,
insurance companies, and other businesses that help
finance transactions or insure against the risks associated
with the buying and selling of goods.

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The Company’s Microenvironment

Customers
Customer markets consist 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.

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The Company’s Microenvironment
Customers
• Reseller markets buy goods and services to resell at a profit.
• Government markets buy goods and services to produce
public services or transfer goods and services to others who
need them.
• International markets consist of buyers in other countries
including consumers, producers, resellers, and
governments.

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The Company’s Microenvironment
Competitors
• Firms must gain strategic advantage by positioning their
offerings against competitors’ offerings.
• Each firm should consider its own size and industry position
compared to those of its competitors.

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The Company’s Microenvironment
Publics
• Any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its
objectives:
• Financial publics
• Media publics
• Government publics
• Citizen-action publics
• Local publics
• General public
• Internal publics

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The Company’s Microenvironment
Publics
• Financial publics influence the company’s ability to obtain
funds—banks, investment houses, and stockholders.
• Media publics carry news, features, and editorial opinion—
newspapers, magazines, and radio and television stations.
• Government publics influence product safety and truth in
advertising.

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The Company’s Microenvironment

Publics
• Citizen-action publics include consumer organizations,
environment groups, and minority groups
• Local publics include neighborhood residents and
community organizations
• General publics influence the company’s public image
• Internal publics include workers, managers, volunteers, and
directors

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2.The MACRO Marketing Environment
The macro environment consists of the larger societal forces
that affect the microenvironment.
• Demographic
• Economic
• Natural
• Technological
• Political
• Cultural

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The Company’s Macroenvironment
Demographic Environment
• Demography is the study of human populations in terms of
size, density, location, age, gender, race, occupation, and
other statistics.
• Demographic environment is important because it involves
people, and people make up markets.
• Demographic trends include age, family structure,
geographic population shifts, educational characteristics,
and population diversity.

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The Company’s Macroenvironment
Demographic Environment

Changing Age Structure of the Population

• Generational marketing is important in segmenting
people by lifestyle of life state instead of age.

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The Company’s Macroenvironment
Demographic Environment

Changes in the Workforce

Trends include:
• More educated
• More white collar
• More professional

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The Company’s Macroenvironment
Economic Environment
• Economic environment consists of factors that affect
consumer purchasing power and spending patterns.
• Subsistence economies consume most of their own
agriculture and industrial output.
• Industrial economies are richer markets.

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The Company’s Macroenvironment

Economic Environment
Changes in Income
• Value marketing involves ways to offer financially cautious
buyers greater value—the right combination of quality and
service at a fair price.
• Income distribution
• Upper-class consumers
• Middle-class consumers
• Working-class consumers
• Underclass consumers
Changing consumer spending pattern

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The Company’s Macroenvironment

Natural Environment
• Natural 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
• Environmentally sustainable strategies
• Green marketing

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The Company’s Macroenvironment
Technological Environment
• Most dramatic force in changing the marketplace with many
positive and negative effects
• Rapid change
• Provides new markets and new opportunities
• Internet
• Medicine
• Miniaturization
• Weapons
• Credit cards
• Communication

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The Company’s Macroenvironment
Political Environment

Political environment consists of laws, government agencies,

and pressure groups that influence or limit various
organizations and individuals in a given society.

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The Company’s Macroenvironment
Political Environment
• Legislation regulating business
• Public policy to guide commerce—sets of laws and
regulations that limit business for the good of society at
large
• Increasing legislation to:
• Protect companies
• Protect consumers
• Protect the interests of society

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The Company’s Macroenvironment
Cultural Environment

The cultural environment consists of institutions and other

forces that affect a society’s basic values, perceptions, and
behaviors.

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 3.Responding to the Marketing
Environment
Views on Responding

Uncontrollable Proactive Reactive

• React and • Aggressive • Watching and

adapt to actions to reacting to
forces in the affect forces forces in the
environment in the environment
environment