Marketing Micro and Macro Environment

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MARKETING ENVIRONMENT

In order to correctly identify opportunities and monitor threats, the company must begin with athorough 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

managements 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 environmental

components. For most companies, the micro environmental components are: the company,

suppliers, marketing channel firms (intermediaries, customer markets, competitors, and publicswhich combine to make up the companys 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 affectenvironmental forces. !owever, smart managers can take a proactive, rather than reactive,

approach to the marketing environment.

"s 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 withthreats. #tudies have shown that e$cellent companies not only have a keen sense of customer but

an appreciation of the environmental forces swirling around them. %y constantly looking at the

dynamic changes that are occurring in the aforementioned environments, companies are betterprepared to adapt to change, prepare long&range strategy, meet the needs of todays and

tomorrows customers, and compete with the intense competition present in the global

marketplace. "ll firms are encouraged to adopt an environmental management perspective in thenew millennium.

" companys marketing environment consists of the actors and forces outside marketing that

affect marketing managements ability to develop and maintain successful relationships with its

target customers.'. %eing successful means being able to adapt the marketing mi$ to trends and changes this

environment.

. )hanges in the marketing environment are often *uick and unpredictable.

+. The marketing environment offers both opportunities and threats.. The company must use its marketing research and marketing intelligence systems to monitor

the changing environment.

-. #ystematic environmental scanning helps marketers to revise and adapt marketing strategies

to meet new challenges and opportunities in the marketplace. The marketing environment ismade up of a:

1. Micro environmental

2. Macro-environment.


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1. Micro Environmental

The microenvironment consists of five components. The first is the organiations internal

environment/its several departments and management levels/as it affects marketingmanagement0s decision making. The second component includes the marketing channel firms

that cooperate to create value: the suppliers and marketing intermediaries (middlemen, physicaldistribution firms, marketing&service agencies, financial intermediaries. The third componentconsists of the five types of markets in which the organiation can sell: the consumer, producer,

reseller, government, and international markets. The fourth component consists of the

competitors facing the organiation. The fifth component consists of all the publics that have anactual or potential interest in or impact on the organiations ability to achieve its ob1ectives:

financial, media, government, citien action, and local, general, and internal publics. #o the

microenvironment consists of si$ forces close to the company that affect its ability to serve its

customers:

a. The company itself (including departments.

b. #uppliers.c. 2arketing channel firms (intermediaries.

d. )ustomer markets.e. )ompetitors.

f. 3ublics.

1. The Company! Microenvironment

"s discussed earlier the companys microenvironment consists of si$ forces that affect its ability

to serve its customers. 4ets 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 environment.

'. Top management is responsible for setting the companys mission, ob1ectives, broad

strategies, and policies.

. 2arketing managers must make decisions within the parameters established by top

management.+. 2arketing managers must also work closely with other company departments. "reas such as

finance, 5 6 7, purchasing, manufacturing, and accounting all produce better results when

aligned by common ob1ectives and goals.. "ll departments must 8think consumer9 if the firm is to be successful. The goal is to provide

superior customer value and satisfaction.

". #$pplier!


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#uppliers 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 companys overall

customer 8value delivery system.9

'. ne consideration is to watch supply availability (such as supply shortages.

. "nother point of concern is the monitoring of price trends of key inputs. 5ising supply costsmust be carefully monitored.

c. Mar%etin& Interme'iarie!

2arketing intermediaries are firms that help the company to promote, sell, and distribute its

goods to final buyers.'. Re!eller! are distribution channel firms that help the company find customers or make sales

to them.

. These include wholesalers and retailers who buy and resell merchandise.+. 5esellers often perform important functions more cheaply than the company can perform

itself. !owever, seeking and working with resellers is not easy because of the power that somedemand and use.

(hy!ical 'i!tri"$tion )irm! help the company to stock and move goods from their points oforigin to their destinations. ;$amples would be warehouses (that store and protect goods before

they move to the ne$t destination.

Mar%etin& !ervice a&encie! (such as marketing research firms, advertising agencies, media

firms, etc. help the company target and promote its products.

*inancial interme'iarie! (such as banks, credit companies, insurance companies, etc. help

finance transactions and insure against risks.

'. C$!tomer!

The company must study its customer markets closely since each market has its own special

characteristics. These markets normally include:

'. Con!$mer mar%et! (individuals and households that buy goods and services for personalconsumption.

. +$!ine!! mar%et! (buy goods and services for further processing or for use in their

production process.

+. Re!eller mar%et! (buy goods and services in order to resell them at a profit.

. Government mar%et! (agencies that buy goods and services in order to produce publicservices or transfer them to those that need them.

-. International mar%et! (buyers of all types in foreign countries.

e. Competitor!


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;very company faces a wide range of competitors. " company must secure a strategic advantage

over competitors by positioning their offerings to be successful in the marketplace.


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ethnic heritage. ne the important markets of the future are that disabled people (a market larger

any of our ethnic minority groups.

b. ;conomic ;nvironment

The economic environment includes those factors that affect consumer purchasing power andspending patterns. 2a1or economic trends in the Cnited #tates include:'. 3ersonal consumption (along with personal debt has gone up ('DEs and the early 'DDs

brought recession that has caused ad1ustments both personally and corporately in this country.

Today, consumers are more careful shoppers.. Val$e mar%etin& (trying to offer the consumer greater value for their dollar is a very serious

strategy in the 'DDs. 5eal income is on the rise again but is being carefully guarded by a value&

conscious consumer.+. Income 'i!tri"$tion is still very skewed in the C. #. and all classes have not shared in

prosperity. In addition, spending patterns show that food, housing, and transportation still

account for the ma1ority of consumer dollars. It is also of note that distribution of income has

created a 8two&tiered market9 where there are those that are affluent and less affluent. 2arketersmust carefully monitor economic changes so they will be able to prosper with the trend, not

suffer from it.

c.


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The so&called green movement has encouraged or even demanded that firms produce strategies

that are not only environmentally friendly but are also environmentally proactive. Firms are

beginning to recognie the link between a healthy economy and a healthy environment.

d. Technological ;nvironment

The technological environment includes forces that create new technologies, creating newproduct and market opportunities.

'. Technology is perhaps the most dramatic force shaping our destiny.

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f. )ultural ;nvironment

The cultural environment is made up of institutions and other forces that affect societys basic

values, perceptions, preferences, and behaviors. )ertain cultural characteristics can affect

marketing decision&making. "mong the most dynamic cultural characteristics are:

'. 3ersistence of cultural values. 3eoples core beliefs and values have a high degree ofpersistence. Corebeliefs and values are passed on from parents to children and are reinforced by

schools, churches, business, and government. #econ'arybeliefs and values are more open to

change.

. #hifts in secondary cultural values. #ince secondary cultural values and beliefs are open tochange, marketers want to spot them and be able to capitalie on the change potential. #ocietys

ma1or cultural views are e$pressed in:

a. (eople! vie0! o) them!elve!. 3eople vary in their emphasis on serving themselves versusserving others. In the 'DEs, personal ambition and materialism increased dramatically, with

significant implications for marketing. The leisure industry was a chief beneficiary.b. (eople! vie0! o) other!. bservers have noted a shift from a 8me&society9 to a 8we&society.9 )onsumers are spending more on products and services that will improve their lives

rather than their image.

c. (eople! vie0! o) or&aniation!. 3eople are willing to work for large organiations bute$pect them to become increasingly socially responsible. 2any companies are linking

themselves to worthwhile causes. !onesty in appeals is a must.

d. (eople! vie0! o) !ociety. This orientation influences consumption patterns. 8%uy "merican9

versus buying abroad is an issue that will continue into the ne$t decade.e. (eople! vie0 o) nat$re. There is a growing trend toward peoples feeling of mastery over

nature through technology and the belief that nature is bountiful. !owever, nature is finite. 4ove

of nature and sports associated with nature are e$pected to be significant trends in the ne$tseveral years.

f. (eople! vie0! o) the $niver!e. #tudies of the origin of man, religion, and thought&provoking

ad campaigns are on the rise. )urrently, "mericans are on a spiritual 1ourney. This will probablytake the form of 8spiritual individualism.9

Reference:

Principles of Marketing, Philip Kotler, 12thEdition.

Marketing Micro and Macro Environment

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