Southern Business School (Institute of

Southern Punjab) Multan

Course Title: Principles of Marketing
Course Instructor: Ms. Ayesha Tanveer(ayeshakhanashi25@gmail.com)
Class Session: Spring 2020
Lecture # 3: The Marketing Environment

*Principles of Marketing by Philip Kotler and Gary Armstrong (latest edition)

*Marketing by Eric Davies and Barry Davies
*Fundamentals of Marketing by William J. Stanton & Charles Futrell,Mcgraw Hill
*Marketing Management: Concepts, Cases, Challenges and Trends by Rajan, Govinda
 Learning Outcomes

 List and discuss the importance of the

elements of the company’s
microenvironment, including the
company, marketing intermediaries,
customers, competitors and publics.
 Explain the broad concept of the
company’s macroenvironment.
 Outline the key changes occurring in
important elements of the company’s
mcroenvironment including shifts in the
demographic, economic, technological,
political, cultural and natural
environments.
 How can companies accurately measure
and forecast demand?
 The forces close to the company that
affect its ability to serve its customers--
 The Company
Microenvironment
In designing marketing plans, marketing management
takes other company groups into account----groups such as
top management, finance, research and development,
purchasing, manufacturing and accounting.
Top Management sets the company’s mission,
objectives, broad strategies and policies.
Marketing managers must make decisions within the
plans made by top management and marketing plans
must be approved by top management before they can
be implemented.
Finance is concerned with finding and using funds to
carry out the marketing plan.
 Suppliers

 Marketing managers must watch supply availability---supply

shortages 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.
Marketing Intermediaries
Firms that help the company to promote, sell and
distribute its goods to final buyers; they include
middlemen, physical distribution firms, marketing service
agencies and financial intermediaries.

Physical Distribution

Marketing Services

Financial Intermediaries
 Competitors

The marketing concept states that to be

successful, a company must provide greater
customer value and satisfaction than its
competitors.
1)Who are our direct competitors?
2)What are their profiles, e.g. scale, financial position,
marketing strategy and market positioning?
3)How do the customers perceive the competition’s
offerings?
Publics
Publics
 Demographic Environment

Demographic forces relate to people. The latter

refers to the study of human populations. This
includes size, density, age, gender, occupation
and income etc.
• World population growth
• Changing family structures
• Educational group
• Ethnicity
 Economic Environment
Some factors that should be
considered are inflation, interest
rates, exchange rates,
unemployment and the labor
supply, income distribution and
long-term prospects for economic
growth.
• Consumer psychology
• Income distribution
• Income level and consumption
 Natural Environment
• The natural environment involves all the natural resources,
such as raw materials or energy sources, needed by or
affected by marketers and marketing activities.
• Global warming has started affecting the rainfall in certain
regions. This in turn may affect the crops and cause a
shortage in raw materials such as jute, cotton, rubber etc.
• Shortages of Raw materials
• Increased cost of Energy
• Increased Pollution
• Government Intervention in
Natural Resource Mgt
 Technological Environment
• Forces that create new technologies,
creating new product and market
opportunities. Technology infrastructure
& policy can raise or lower barriers to
entry. Issues to consider include:
intellectual property rights, internet &
communication infrastructure,
government or industry spending on
R&D, technology incentives and the
rate of technological change.
• Accelerating pace of change
• Unlimited opportunities for innovation
• Varying R & D budgets
• Concentration on Minor Improvements
 Political-Legal Environment
• A key factor to asses in the political
environment is the stability of the
local government. Examine the
country's policies toward business,
including factors such as trade and
tariff policy, tax structure, anti-trust
and competition regulations, union
power and consumer protection
laws.
• Increase in business legislation
• Growth of special interest groups
• Increased Emphasis on Ethics &
Socially Responsible Actions
Socio-cultural Environment

Social factors have an

impact on decisions to
invest in a foreign country.
Consider cultural values,
including attitude toward
work, customs and beliefs
and characteristics of the
population, such as social
class and educational
attachment.
Demand Measurement
Market Demand

Market Forecast

Market Potential

Company Demand

Company Sales Forecast

Company Sales Potential

Summary