Chapter Two

Marketing
Environment
 Overview
 Marketing environment
 Organizations operate not in a vaccum rather in a complex
and changing environment.
 Actors and forces outside & inside marketing
 All forces affecting the result of a company's marketing
efforts

INTERNAL Vs. EXTERNAL

A . Internal environment
 Factors essentially emenated from the organizations own teritory
and thus a company can have full control over such factors
 Company can exercise full control over its resource and activities
such as marketing , production, finance, etc.
 It is basic source of the organization’s strength and weakness

B . External environment
 All external forces affecting the result of a company's
marketing efforts
Sources of opportunities and threats
 levels of external environment
1. Macro environment
2. Micro environment
Macro environmental forces
 It is Larger force affecting all the companies in the market
 Demographic
 Economic
 Technological
 Cultural
 Natural
 Political
 Macro…
1. Demographic Env’t
The study of human population in terms of size, density,
location, age, gender, race, occupation, education and
other statistics
(Popn. growth, national demographic factors, Proportion of
literate, household pattern composition, …)
2. Economic Env’t
Factors that affect customers purchasing power Vs.
spending patterns
 Level of Economy (Subsistent Vs. Industrial )
 Income distribution
 Economic situation (booming Vs. depression)
 Inflation Vs. deflation
 Savings, debt and credit availability and interest rate
 Macro…
3. Technological Env’t
Perhaps the most dramatic force now shaping our destiny
New technology creates new markets and opportunities
It is a mixed blessing in some ways
4. Cultural Env’t
•Institutions and other forces that affect society's basic values,
perceptions, preferences, and behaviors
People in every society hold many core beliefs and values
that tend to exist for a long
5. Natural Env’t
Refers to the physical environment (natural resources- needed
as input vs. affected by activities)
Resources: infinite(water, air,…), finite but renewable (food,
forest,…) & finite but nonrenewable (gas, coal, petroleum, …)
Macro…..
6. Political Env’t
 Laws, government agencies, pressure groups that influence
and limit how a company may operate
Countries have Legislations
 To protect companies from unfair competition
 To protect consumers from unfair business practices
To protect the interests of the society
Micro environmental forces
 Forces close to the company – Affects its ability to serve its
customers
 The company itself
 Suppliers
 Marking channel firms
 Customer markets
 Competitors
 Publics
Micro..
1. Suppliers
Must watch supply availability and Must monitor prices of key inputs
2. Marketing intermediaries
Retailers
Physical distribution firms
Marketing services agencies
Financial intermediaries

3. Competitors
Brand competition
Substitute pdt’s competition
General competition
4. Customers
 END
OF
CHAPTER TWO