Chapter 3

Marketing Environment
Marketing Environment

MARKETING

Micro-
Environment

Macro-
Environment
Micro-Environment
• The ACTORS CLOSE to the company that affect its
ABILITY to serve its customers.
Micro-Environment
Company

Publics Suppliers

Marketing

Competitors Marketing
intermediaries

Customer
markets
Micro-Environment
• The company
• SWOT of the company
• Top management (long term goals)
• Finance
• Research and Development
• Accounting department
• HRM department
• Operations
• Procurement department
• Suppliers
• How many are they?
• Where are they?
• How good is our relationship with them?
Micro-Environment
• Intermediaries
• Resellers
• Wholesalers
• Retailers
• Physical Distribution firms (Resellers )
• Firms that help the company stock and move goods form company to
destination.
• Marketing services agencies
• Marketing research firms
• Advertising agencies
• Media firms
• Marketing consultants
• Financial intermediaries
• Banks
• Credit companies
• Insurance companies
Micro-Environment
• Customers
• Consumer markets
• Business markets
• Reseller markets
• Government markets
• International markets
• Competitors
• How many?
• How strong?
• How differentiated?
• How ethical?
 Micro-Environment
• Publics
• Financial publics
• Influence company’s ability to obtain funds. Banks, investment houses, and stock holders
etc.
• Media publics
• They carry news, features, and editorial opinions.
• Newspapers, TV stations, radio stations and magazines.
• Government publics
• Government regulations on product safety, honest advertising, environmental damage etc.
• Citizen-action publics
• Consumer organizations, environmental groups, minority groups etc.
• Public Relations department is necessary.
• Local publics
• Neighborhood residents and community organizations.
• Its good to have a community relations officer.
• General publics
• The overall population’s perception of the company can affect the sales.
• Internal publics
Macro-Environment
• The LARGER SOCIAL Forces that AFFECT the Micro-
Environment.
Macro-Environment
Demographical

cultural Economical

Company

Political Natural

Technological
Macro-Environment
• Demography
• Gender
• Age
• Education
• Income
• Health
• Culture
• Religion
• Etc etc
Demography
• Age structure
• Baby boomers (between 1940-1960)
78 millions
• Generation X (1965-1976)
45 millions
• Generation Y (1977-1994)
72 millions
• Millennials (1994-present)
Micro-Environment
Assignment
Real marketing
Toyota’s Scion:
Targeting Gen Y without Shouting “Buy This Car”
(Principles of Marketing, 12th Edition, page 68-69)
Demography
• Changing family size & style
• More white color population
• Increasing diversity
Economic Environment
• Changing income
• Upper class
• Middle class
• Lower class
• Changing consumer spending patterns
• Ernest Engle’s research on Shifts in spending as income rises.
• Engle’s law illustrates:
• How people shift their spending across food, housing, transportation,
health care and other goods WHEN family income rises.
Natural Environment
• Shortages of Raw Materials
• Increased pollution
• Increased governmental intervention
• EPA (Environmental Protection Agency, 1970)
• Concern for the natural environment has given birth to the
so-called “green movement”.
• These force companies to adopt “Environmentally
Sustainable Strategies and Practices”
Micro-Environment
Assignment
Real Marketing
Gibson:
Making Money and Leaving the World a Better Place
(Principles of Marketing, 12th Edition, page77)
Technology
• Forces that create new technologies, creating new
product and market opportunities.
Political Environment
• Legislation (public policy guiding commerce)
• Competitive behavior
• Product standards
• Product liability
• Thailand forces food suppliers to offer low-price food too so that
poor families can benefit.
• Three main reasons for governmental legislation
• Protect companies from each other
• Protect consumers from unfair business practices
• Protect society from all kinds of damage caused by production and
products.
• Increased emphasis on ETHICS and SOCIALLY
Responsible Actions
Culture
• Institutions and other forces that affect society’s basic
VALUES, PERCEPTIONS, PREFERNCES and
BEHAVIORS.
Culture
• Primary values
• Believing in marriage is a primary value.
• Secondary values
• Believing in late or early marriage is a secondary value.
• Shift in secondary values is possible but not in primary.
• People’s view of
• Self
• Some people seek personal pleasure, fun, change and escape
• Other seek recreation and self-actualization
• Both prefer products that help them express themselves.
• Others
• Do people prefer to go out with others or be a “cocoon or nesting”.
• Whichever prevails should help a marketer.
• Society (people’s view of society affects their consumption)
• Patriots defend it.
• Reformers want to change it.
• Malcontents want to leave it.
• Nature (People feel ruled by it, in harmony with it or want to master it)
• Universe (origin of universe, meaning of life. People are moving towards religions, hence it
affects their choices from eating to reading and so on.)
Responding to the Environment
• There are THREE kinds of companies
• Those who make things happen
• Those who watch things happen; and
• Those who wonder what’s happened.
• Being reactive or proactive is a company’s choice, its
manager’s choice.
• Some forces can not be changed.
• Geographic shifts
• Economic fluctuations etc.
• Some forces can be controlled, depends on how you take
them;
• Influencing legislations through lobbyists
• Advertorials (ads expressing editorial opinions)