ANALYZING THE

MARKETING
ENVIRONMENT
Chapter 3
 Chapter Three Outline
 Marketing Environment
 The Company’s Microenvironment
 The Company
 Suppliers
 Marketing intermediaries
 Competitors
 Publics
 Customers
 The Company’s Macroenvironment
 The Demographic environment
 The Economic environment
 The Natural environment
 The Technological environment
 The Political and Social environment
 The Cultural environment
 Marketing Environment

 Marketing Environment: consists of the actors and

forces outside marketing that affect marketing
management’s ability to develop and maintain
successful relationships with target customers.
 Includes:
 Microenvironment - Forces close to the company that
affect its ability to serve its customers.
 Macroenvironment - Larger societal forces that affect the
microenvironment.
The Company’s Microenvironment
 The Company’s Microenvironment

The success of marketing depends

on building relationships with other
departments, suppliers, marketing
intermediaries, competitors, various
publics, and customers.
 The Company’s Microenvironment

 The Company

 Top management

 Finance

 R&D

 Purchasing

 Operations

 Accounting

 Marketers must work with other departments in the company and make decisions that support
the strategies and plans of top management.
 The Company’s Microenvironment

 Suppliers

 Provide the resources to produce goods and services

• Suppliers are an important link in the company’s value delivery

network.

• Supply shortage or delays can cost sales in the short run and
damage customer satisfaction in the long run.

 Treat suppliers as partners to provide customer value.

 The Company’s Microenvironment

 Marketing Intermediaries

 Help the company to promote, sell and distribute its products to final buyers.

 Types of Marketing Intermediaries

 Resellers: Are distribution channel firms that help the company find customers or make sales to
them. Example: Wholesalers and retailers.

 Physical distribution firms: Help the company stock and move goods. Example: Transportation
and warehousing companies.

 Marketing service agencies: Marketing research firms, advertising agencies.

 Financial intermediaries: Insure the risk that is connected with buying and selling of goods.
Example: banks and insurance companies.
The Company’s Microenvironment
 Competitors: Those who serve a target market with similar
products and services

 A company must gain strategic advantage against these organizations.

 Firms gain strategic advantage by positioning their offerings strongly

against competitors’ offerings

 Publics : Groups that have an interest in or impact on an

organization's ability to achieve its objectives

 Media, citizen-action, local ,general

 The Company’s Microenvironment

 Customers : Are the most important actors in the company’s microenvironment.

 Five types of customer markets that purchase a company’s goods and services are

 Consumer: Are people who buy goods and service for their personal use.

 Business: Buy goods and services for further processing our use in the their production
processes.

 Reseller: Buy goods and services to resell at a profit.

 Government : Government agencies that buy goods and services to produce public services or
transfer the goods and services to others who needs them.

 International: Buyers in other countries, including consumers, producers, resellers, and

governments.
The Company’s Macroenvironment
 The Demographic Environment

 Demography: The study of human populations-- size,

density, location, age, gender, race, occupation, and other
statistic.

 Demographic environment: Marketers are very interested

in the demographic environment because it involves
people, and people make up markets.

 Demographic trends: Shifts in age, family structure,

geographic population, educational characteristics, and
population diversity

 The Demographic Environment

 Changes in the Workforce

 More educated workers

 More white collar: More professional workers

such as engineers, doctors, and teachers.

 Generational marketing is important in segmenting

people by lifestyle of life state instead of age.
 The Economic Environment

 Economic environment consists of factors that affect consumer purchasing power and
spending patterns.

 Marketers pay attention to trends and consumer spending patterns across and within
their world markets.
.
 Types of economies:
: 

 Industrial economies: Are richer markets for many different kinds of products.

 Developing economies: Offer outstanding opportunities for the right kinds of products.

 Subsistence economies: Consume most of their own agriculture and industrial output
and offer few market opportunities.
 The Economic Environment

 Value marketing: Marketers in all industries

are looking for ways to offer today’s more
financially frugal buyers greater value-just the
right combination of product quality and good
service at a fair price.
 The Natural Environment

 Natural environment: Natural resources that are needed as inputs by

marketers or that are affected by marketing activities.

 Trends in the natural environment:

 Increased shortages of raw materials-

 Nonrenewable resources: oil and coal

 Renewable resources: forests and food

 Firms who require these scarce resources face large cost increases.
 The Natural Environment

 Increased pollution-Industries will almost always damage the

quality of the natural environment.

 Increased government intervention-Countries vary in their

concern and effort to promote a clean environment.

 Increased environmentally sustainable strategies -Meeting

present needs without harming the ability of future generations to
meet their needs.

 Companies are realizing that environmentally responsible actions

can be good business.
 The Technological Environment

 The technological environment is perhaps the most dramatic force in

changing the marketplace.

 New product opportunities

 The technological environment changes very quickly.

 New technologies replace old technologies.

 Marketers must monitor the technological environment very carefully.

 More concern for the safety of new products

 The Political Environment

 The Political Environment is made up of laws, government agencies, and pressure groups that
influence or limit various organizations and individuals in a given society.

 Legislation regulating business:

1. Protect companies from each other: Unfair competition

2. Protect consumers for unfair business practice: Misleading advertising and packaging, unfair
prices

3. Protect the interest of society against bad business practice: Ensures that companies take
responsibility for the social costs of their production or products.

.4


 The Political Environment

 More focus on ethics

 Socially Responsible Behavior: Some companies are trying to

find ways to protect the long-term interest of consumers and the
environment.

 Cause-Related Marketing: Many companies are taking up

worthwhile causes such as fighting hunger.

. 
 The Cultural Environment

 The Cultural environment consists of institutions

and other forces that affect a society’s basic
values, perceptions, and behaviors.
 People’s basic beliefs and values are shaped by the
society where they grow up.
 People absorb a worldview that defines their
relationships with others.
 The Cultural Environment

 Core Beliefs and values are passed from parents to children and are
reinforced by schools, religious institutions, businesses, and governments.

 Core beliefs and values are difficult to change.

 Secondary beliefs and values are more open to change.

 Example: Believing in marriage is a core belief, believing that people

should marry early is a secondary belief.

 Marketers have some chance of changing secondary beliefs and values but
very little chance of changing core beliefs and values.
 Reference
 Kotler, Philip and Gary Armstrong, Principles of
Marketing, 15th edition, Pearson Education
Limited, 2014.