In last Lesson we discussed the marketing process. Marketing process
consists of four steps: analyzing market opportunities; developing
marketing strategies; planning marketing programs, which entails
choosing the marketing mix (the four Ps of product, price, place, and
promotion); and organizing, implementing, and controlling the marketing
effort. This marketing process is influenced by some environmental
factors that can be internal to organization or external to
organization, today we will be covering Marketing Environment:
In order to correctly identify opportunities and monitor threats, the
company must begin with a thorough understanding of the marketing
environment in which the firm operates. The marketing environment
consists of all the actors and forces outside marketing that affect the
marketing management’s ability to develop and maintain successful
relationships with its target customers. Though these factors and forces
may vary depending on the specific company and industrial group, they
can generally be divided into broad micro environmental and macro
For most companies, the micro environmental
components are: the company, suppliers, marketing channel firms
(intermediaries), customer markets, competitors, and publics which
combine to make up the company’s value delivery system. The macro
environmental components are thought to be: demographic, economic,
natural, technological, political, and cultural forces. The wise
marketing manager knows that he or she cannot always affect
environmental forces. However, smart managers can take a proactive,
rather than reactive, approach to the marketing environment.
As marketing management collects and processes data on these
environments, they must be ever vigilant in their efforts to apply what
they learn to developing opportunities and dealing with threats. Studies
have shown that excellent companies not only have a keen sense of
customer but an appreciation of the environmental forces swirling around
them. By constantly looking at the dynamic changes that are occurring in
the aforementioned environments, companies are better prepared to adapt
to change, prepare long-range strategy, meet the needs of today’s and
tomorrow’s customers, and compete with the intense competition present
in the global marketplace. All firms are encouraged to adopt an
environmental management perspective in the new millennium.
A company’s marketing environment consists of the actors and
forces outside marketing that affect marketing management’s ability to
develop and maintain successful relationships with its target customers.
1). Being successful means being able to adapt the marketing mix to
trends and changes this environment.
2). Changes in the marketing environment are often quick and
3). The marketing environment offers both opportunities and threats.
4). The company must use its marketing research and marketing
intelligence systems to monitor the changing environment.
5). Systematic environmental scanning helps marketers to revise and
adapt marketing strategies to meet new challenges and opportunities in
the marketplace. The marketing environment is made up of a:
1. Micro environmental
1. Micro environmental
The microenvironment consists of five components. The first is the
organization’s internal environment—its several departments and
management levels—as it affects marketing management's decision making.
The second component includes the marketing channel firms that cooperate
to create value: the suppliers and marketing intermediaries (middlemen,
physical distribution firms, marketing-service agencies, financial
intermediaries). The third component consists of the five types of
markets in which the organization can sell: the consumer, producer,
reseller, government, and international markets.
The fourth component
consists of the competitors facing the organization. The fifth component
consists of all the publics that have an actual or potential interest in
or impact on the organization’s ability to achieve its objectives:
financial, media, government, citizen action, and local, general, and
internal publics. So the microenvironment consists of six forces close
to the company that affect its ability to serve its customers:
a. The company itself (including departments).
c. Marketing channel firms (intermediaries).
d. Customer markets.
1. The Company’s Microenvironment
As discussed earlier the company’s microenvironment consists of six
forces that affect its ability to serve its customers. Lets discuss
these forces in detail:
a. The Company
The first force is the company itself and the role
it plays in the microenvironment. This could be deemed the internal
1). Top management is responsible for setting the company’s mission,
objectives, broad strategies, and policies.
2). Marketing managers must make decisions within the parameters
established by top management.
3). Marketing managers must also work closely with other company
departments. Areas such as finance, R & D, purchasing, manufacturing,
and accounting all produce better results when aligned by common
objectives and goals.
4). All departments must “think consumer” if the firm is to be
successful. The goal is to provide superior customer value and
Suppliers are firms and individuals that provide the resources needed
by the company and its competitors to produce goods and services. They
are an important link in the company’s overall customer “value delivery
1). One consideration is to watch supply availability (such as supply
2). Another point of concern is the monitoring of price trends of key
inputs. Rising supply costs must be carefully monitored.
c. Marketing Intermediaries
Marketing intermediaries are firms that help the company to promote,
sell, and distribute its goods to final buyers.
1). Resellers are distribution channel firms that help
the company find customers or make sales to them.
2). These include wholesalers and retailers who buy and resell
3). Resellers often perform important functions more cheaply than the
company can perform itself. However, seeking and working with resellers
is not easy because of the power that some demand and use.
Physical distribution firms help the company to
stock and move goods from their points of origin to their destinations.
Examples would be warehouses (that store and protect goods before they
move to the next destination).
Marketing service agencies (such as marketing
research firms, advertising agencies, media firms, etc.) help the
company target and promote its products.
Financial intermediaries (such as banks, credit
companies, insurance companies, etc.) help finance transactions and
insure against risks.
The company must study its customer markets closely since each market
has its own special characteristics. These markets normally include:
1). Consumer markets (individuals and households that
buy goods and services for personal consumption).
2). Business markets (buy goods and services for
further processing or for use in their production process).
3). Reseller markets (buy goods and services in order
to resell them at a profit).
4). Government markets (agencies that buy goods and
services in order to produce public services or transfer them to those
that need them).
5). International markets (buyers of all types in
Every company faces a wide range of competitors. A company must
secure a strategic advantage over competitors by positioning their
offerings to be successful in the marketplace. No single competitive
strategy is best for all companies.
A public is any group that has an actual or potential
interest in or impact on an organization’s ability to achieve its
objectives. A company should prepare a marketing plan for all of their
major publics as well as their customer markets. Generally, publics can
be identified as being:
1). Financial publics--influence the company’s ability to obtain funds.
2). Media publics--carry news, features, and editorial opinion.
3). Government publics--take developments into account.
4). Citizen-action publics--a company’s decisions are often questioned
by consumer organizations.
5). Local publics--includes neighborhood residents and community
6). General publics--a company must be concerned about the general
public’s attitude toward its products and services.
7). Internal publics--workers, managers, volunteers, and the board of