CHAPTER TWO

ANALYZING MARKETING
ENVIRONMENT
OBJECTIVES OF THE
CHAPTER;
Describe the environmental forces that affect the
company's ability to serve its customers.
Explain how changes in the demographic and
economic environment affect marketing decisions.
Discuss how companies can react to the
marketing environment.
MARKETING
MARKETING ENVIRONMENT
ENVIRONMENT
All the actors and forces influencing the company’s
ability to transact business effectively with it’s target
market.
Includes:
Microenvironment-
Microenvironment forces close to the company
that affect its ability to serve its customers.
Macro-environment-
Macro-environment larger societal forces that
affect the whole microenvironment.
THE
THE MARKETING
MARKETING
ENVIRONMENT
ENVIRONMENT
Demographic

Company
Cultural Economic

Publics Suppliers
Company
Customers
Competitors
Political Natural
Intermediaries

Technological
The
The Microenvironment
Microenvironment

Company
Company

Publics
Publics Forces
Forces Affecting
Affecting aa Suppliers
Suppliers
Company’s
Company’s Ability
Ability to
to
Serve
Serve
Customers
Customers
Competitors
Competitors Intermediaries
Intermediaries
Customers
Customers
THE
THE COMPANY’S
COMPANY’S
MICROENVIRONMENT
MICROENVIRONMENT
Company’s Internal Environment-
Environment functional areas
such as top management, finance, and manufacturing,
etc.

Suppliers - provide the resources needed to produce

goods and services.

Marketing Intermediaries - help the company to

promote, sell, and distribute its goods to final buyers.
THE
THE COMPANY’S
COMPANY’S
MICROENVIRONMENT…CONT’D
MICROENVIRONMENT…CONT’D
Customers – the five types of markets that purchase
a company’s goods and services.

Competitors - those who serve a target market with

similar products and services.

Publics - any group that perceives itself having an

interest in a company’s ability to achieve its
objectives.
CUSTOMER
CUSTOMER
MARKETS
MARKETS

International Consumer
Markets Markets

Company
Company
Government Business
Markets Markets

Reseller
Markets
MACROENVIRONMEN
MACROENVIRONMEN
TT
Demographic
Demographic

Cultural
Cultural Forces
Forces that
that Shape
Shape Economic
Economic
Opportunities
Opportunities
and
and Pose
Pose Threats
Threats
to
to aa Company
Company
Political
Political Natural
Natural
Technological
Technological
THE
THE COMPANY’S
COMPANY’S MACRO-
MACRO-
ENVIRONMENT
ENVIRONMENT
Demographic - monitors population in terms of age,
sex, race, occupation, location and other statistics.
ECONOMIC –
-FACTORS THAT AFFECT CONSUMER
BUYING POWER AND PATTERNS.

Economic
Economic Key
Key Changes
Changes
Development
Development Economic
Economic in
in Income
Income
Concerns
Concerns for
for
Marketers
Marketers

Changes
Changes
in
in Consumer
Consumer
Spending
Spending
Patterns
Patterns
 ECONOMIC …CONT’D
Business Cycle
-A pattern of economic fluctuations
Prosperity
Positive Economic Indicators

Recession Recovery

Depression

Time
 NATURAL ENVIRONMENT
It consists of natural resources, which are needed as
raw materials to manufacture products.
The marketing activities affect these natural 
resources, such as depletion of ozone layer due to
the use of chemicals.
 NATURAL
ENVIRONMENT..CONT’D.
More
More Government
Government
Intervention
Intervention

Factors
Affecting
Higher
Higher Pollution
Pollution the Shortages
Shortages of
of
Levels
Levels Natural Raw
Raw Material
Material
Environment

Increased
Increased Costs
Costs
of
of Energy
Energy
THE
THE COMPANY’S
COMPANY’S MACRO-
MACRO-
ENVIRONMENT
ENVIRONMENT
Technological - forces that create new product and
market opportunities.
TECHNOLOGICAL
TECHNOLOGICAL
ENVIRONMENT
ENVIRONMENT
Rapid
Rapid Pace
Pace of
of High
High R
R&&DD
Change
Change Budgets
Budgets

Issues
Issues in
in the
the Technological
Technological
Environment
Environment

Focus
Focus on
on Minor
Minor Increased
Increased
Improvements
Improvements Regulation
Regulation
POLITICAL ENVIRONMENT

Politics - laws, agencies and groups that

influence or limit marketing actions.
POLITICAL
POLITICAL
ENVIRONMENT
ENVIRONMENT

Increased
Increased Changing
Changing
Legislation
Legislation Enforcement
Enforcement
Key
Key
Trends
Trends inin the
the
Political
Political
Environment
Environment

Greater
Greater
Concern
Concern for
for
Ethics
Ethics
CULTURAL
ENVIRONMENT
Cultural - forces that affect a society’s basic
values, perceptions, preferences, and behaviors.
CULTURAL
CULTURAL
ENVIRONMENT
ENVIRONMENT
Of
Of Oneself Of
the Universe Others
Views
Views
That
That Express
Express
Values
Values
Of Of
Nature Of Organizations
Society
 RESPONDING
RESPONDING TO
TO THE
THE
MARKETING
MARKETING ENVIRONMENT
ENVIRONMENT
Environmental Management Perspective
–Taking a proactive and reactive approaches.
1.Reactive marketing- forces as totally uncontrollable and
difficult to predict.
–the organization tries to adjust its marketing mix and program
according to the changes in the environment.
2. Proactive marketing- to manage the microenvironment and
the macro-environment to affect changes that are favorable
for the company.

–How? Hire lobbyists , run “advertorials”, file law suits and

complaints, and form agreements.