ANALYZING THE MARKETING ENVIRONMENT

Introduction

A company’s marketer must identify, analyze, and monitor external forces and assess their potential impact on their organization’s goods and services.

Taken together with the variables of the organization’s marketing mix in developing marketing plans and strategies.

Understanding the business environment, and the marketing system within it, is crucial to the success of the company.

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Definition of Environmental Management

Environmental management is known attainment of organisational objectives by predicting and influencing the various environmental factors.

This influence can result from a number of activities by the firm’s management.

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Purpose……………

Marketers need to look at the factors surrounding their business activities in order to :- Effectively plan the activities for the future. To develop and maintain successful transactions with

its target group. Key purpose:- lead to new opportunities for

marketing.

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Example:- Nokia Communicator

Computer manufacturers had been competing with each other to produce the smallest, lightest, most portable laptops.

BUTNokia Communicator that incorporates a hand phone with a keyboard and internet connectivity, made computer manufacturers cautious of telecommunications device manufacturers.

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Product features update due to changes in technology

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Micro-Environment

The micro environment consists of the forces close to the company that affects its ability to serve its customers.

Marketing management’s job is to attract and build relationships with customers by creating customer value and satisfaction.

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Types of Microenvironment

CompanySuppliersMarketing intermediariesCustomersCompetitorsPublics.

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Micro-Environment

1) Company. Top management sets the company’s mission,

objectives and broad strategies. Marketing managers have to work with all other

departments as they have an impact on the marketing plans and actions.

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Suppliers of Old Town White Coffee

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NUTRIPLUSEGG

Micro-Environment

2) Marketing intermediaries form an important component of the company’s

overall value delivery system. Eg: resellers, physical distribution firm, marketing

service agencies, financial intermediaries.

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Distributors of Tag Heuer Watch in Malaysia (Selective)

Armaan (Malaysia) Sdn BhdTAG Heuer BoutiqueJalan Bukit Bintang

TAG Heuer MidValleyLot038, Ground Floor, MidValley Megamall

TAG Heuer GardensThe Gardens Mid Valley City

WatchshoppeMid Valley Megamall

Swiss Union Fine Watch Sdn. Bhd Berjaya TIMESQUARE

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Micro-Environment

3) Customers.Each market type has their own characteristics that

has to be met by the seller. Consumer Markets

individuals and household that buy goods and services for personal consumption

Business Markets buy goods and services for further processing/for

use in their production process.

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Types of Consumers

Reseller Markets buy goods and services to resell at a profit. wholesalers, retailers, and distributors. may restrict their purchases to one product or brand or offer

a variety of products and brands.

Government Markets are made up of government agencies that buy goods and

services to produce public services/transfer the goods and services to others who need them.

International Markets: consist of these buyers in other countries, including

consumers, producers, resellers and government.04/13/2023Marketing

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Micro-Environment

4) Competitors. Marketers must gain competitive advantage over the

competition by studying their strategies and positioning and countering it.

Each firm must consider its own size and industry position as compared to its competitors.

5) Publics. Companies have to consider the views of different

interest groups in the general public in its marketing plan.

7 types

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Types of Publics

Financial Publics influence the company’s ability to obtain funds.

Example: Banks, Investment houses and stockholders are the major financial publics.

Media Publics carry news, features and editorial opinion. Example: newspaper, magazines and radio and

television stations

Government Publics Government publics can affect the company by passing

legislation and laws that put restrictions on the company’s actions

Example: marketers must often consult the company’s lawyers on issues of product safety, truth in advertising and other matters.

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Types of Publics Citizen action publics.

A Company’s marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and others.

Example its public relations departments can help it stay in touch with consumer and citizen groups.

Local Publics include neighborhood residents and

community relations. Example: Large companies usually appoint a

community relations officer to deal with the community, attend meetings, answer questions and contribute to worthwhile causes. 04/13/2023Marketing

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Types of Publics General Public

a company needs to be concerned about the general public’s attitude toward its products and activities.

Customer’s base Example: the public’s image of the company

affects its buying.

Internal Publics include workers, managers, volunteers and the

board of directors. Large companies use newsletters and other means to inform and motivate their internal publics.

Example: When employees feel good about their company, this positive attitude spills over to external publics.

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Macro-Environment

1) Political-Legal Factors. every aspect of marketing mix is subject to laws and

regulations. Consists of laws, regulations and government

agencies that influence and limit various organization in a given society.

Such laws touch on all aspects of the marketing decision making – designing, labeling, packaging, distribution and advertising.

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Macro-Environment

2) Economic Environment. The economic environment consists of factors that

affect consumer purchasing power and spending patterns.

Economic factors like inflation rates, economic growth, taxation and wages affect the demand and sales of goods/services.

Subsistence economy, industrialized economy People are doing things to save more money: DIY

products, opt for lower price brand, eating at home.

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Macro-Environment

3) Socio-Cultural Environment. People in different social environments have

particular beliefs and attitudes. Trends and changes in population structure and

social cultural values impact greatly on marketing decisions.

Core beliefs: passed from parents, children, and reinforced by schools, churches, business, government.

Secondary belief: more open to change. Eg: belief in marriage: core belief ; believing that

people should get marry early/late is secondary belief.

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Macro-Environment

4) Technological Environment. New technology results in new products/service for

consumers. Antibiotic, robot surgery, laptop computers and

internet. Release horrors like nuclear missiles, chemical

weapons, Automibiles, tv and credit cards (mix blessings)

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Macro-Environment

5) Natural Environment. Some concerns facing marketers are : the shortage of certain raw materials

- air pollutions- renewable resources: forest- non renewable resources: oil, minerals, coal.

increased cost of energy and increased pollution.- dangerous mercury in the ocean, chemical waste

increased government intervention Different policies among government.

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Macro-Environment

6) Demographic- The study of human populations in term of size,

density, location, age, gender, race, occupation , etc.

- Changing age structure of the populations : baby boomers Generation X (Gen X) Generation Y (Gen Y)/echo boomers/millenials Teens Tweens

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Macro-Environment

Baby boomers (1946 – 1964: 77 millions)- Largest population: oldest turned 60 and the

youngest turned 40.- Heavy rely on words of mouth promotion- Lucrative market for: house re-modelling, financial

services, health and fitness products, travel and entertainment , etc.

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Macro-Environment

Generation X (1965-1976: 40 millions)

- now in their 30s-40s - progress in their careers, start families home-

ownership.- highly value of education: sending kids to college/

elementary school.- Opportunities to banking industry.

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Macro-Environment

Generation Y (1977-1994: 77 millions)- Eldest of gen Y have now graduated and moving

up in their careers- IT savvy - own at least one networked device. - Attractive target: video games, movies, clothes

and even beverages- Impatience – computers access- Opinionated – encourage but their parents,

teachers, to share their opinions.

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Macro-Environment Teens (13-19yrs old : 25 millions)- 2/3 go to a mall once a week- more than 72 hours (90%) tuned in electronically :

tv, internet, music video, cell phone, text message, facebook.

Tweens ( pre- and early adolecents aged 9-14 )- Heavy buying influence on parents- biggest cell phone usage, clothes.- Viral sensation that has been buzz about at school.- Style that doesn’t reflect their parents- want to

have their own look.

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Consumerism

Defined as a social force within the environment designed to aid and protect the buyers.

In recent years marketers have been beset by increasing consumer activitism.

The consumer movement led to consumer rights to; Choose freely. Be informed. Be heard. Be safe.

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Consumerism

The implications for marketers means recognizing consumer rights such as:

Safe and quality products with proper labeling.

Fair pricing.Truthful and accurate advertising.

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Environmentalism.

Environmentalist are individuals or organized groups who seek to maximize the quality of life by means of a better living environment. They want environmental cost to be included in producer and consumer decision making.

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Societal Marketing Concept.

This is the response to criticisms that marketing practice have been socially and environmentally unresponsive and ignore public interest, in the midst of satisfying customers.

Marketing activities should be socially and environmentally responsible.

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Societal Marketing Concept.

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Society (Human welfare)

Consumers(Satisfaction)

Company(Profits)