Learning OutcomesLearning Outcomes

Define the broad categories of factors that affect the marketing environment

Explain the distinction between the microenvironment and the macroenvironment

Understand the influences at work within each of these categories and their importance to marketing decisions

Explain how to conduct environmental scanning and how companies respond to environmental change

Marketing environment refers to the different factors and forces outside marketing that affect marketing management’s ability to develop and maintain successful transactions with its customers. The environments are:

Internal environmentMicro environmentMacro environment

Marketing EnvironmentMarketing Environment

Marketing EnvironmentMarketing Environment

The Internal EnvironmentThe Internal Environment

Marketers and marketing decisions are affected by the structure and politics within their organisation. The internal environment consists of organisational influences such as:

oCorporate objectives oCulture & structure of companyoStakeholders oResources

These factors determine the scope and conduct of an organisation’s marketing activities.

The Micro-EnvironmentThe Micro-Environment

The micro-environment comprises of all the organisations and individuals who directly or indirectly affect the activities of a organisation

oCustomers o Intermediaries oSuppliers oCompetitors oBanks/lendersoOther stakeholders

The Macro-Environment The Macro-Environment (PESTLE)(PESTLE)

These are external forces which may not immediately affect the relationship that a company has with its customers, suppliers & intermediaries. But macro-environmental changes will alter the nature of these relationships.

The Macro-Environment The Macro-Environment (PESTLE)(PESTLE)

Technological

*Products*Materials *Distribution*Marketing/admin

Economical

*Market structures*Gov’t policy*Trading blocks*Taxation*Interest rates

Political/Legal

*The EU*National gov’t*Local gov’t*Regulatory bodies*Trade associations

Sociocultural

*Demographics*Culture*Attitudes*Current issues*Ethical issues

Environmental

*Climate change*Sustainable sourcing*Product disposal*Natural resources

Changes in the political environment- National/EU/Globally affect business

Political stability crucial for market stabilityGovernment legislation is a major influence

on economic environment & businessesLocal/National/European/International law &

bylaws all influence businessRegulation & deregulation of business

sectorsTrade associations

Political/LegalPolitical/Legal

Economic growth and unemploymentThe state of the economy and business cycle Interest ratesCompetitionPersonal disposable incomeCurrency fluctuationsCentral & eastern EuropeThe BRICS, MINT and other growth

economies

EconomicalEconomical

SocioculturalSociocultural

Consumer attitudes & changes in taste and fashion for products and services over time

Role of women & balance between population of women and men and age distribution

Race, subcultures and occupationAttitudes to the elderlyThe importance of leisure timeThe role of the familyChanges in the structure of population

globallyGeographical distribution of populations

Allows new goods and services to be offered to consumers

New technology can allow existing products to be made more cheaply, thereby lowering an organisations costs and widening their markets

Technological development allows for new methods of distributing goods and services (e.g. online marketing and selling)

New opportunities for companies to communicate with their target customers

Technological Technological

Consumer concerns have led to demand for:products not tested on animalsmore natural ingredients in productsingredients from renewable resources and/or processed with minimal environmental impact organic/non-factory farmed produce, particularly in light of the recent debate on genetically modified foodshealth orientated foods and drinks with minimal artificial additivesRecyclable/refillable packaging/minimal packagingLess energy consumption

Environmental Environmental

How to monitor changes in the How to monitor changes in the external environment external environment

Environmental scanning - the process of monitoring and analysing the marketing environment of a company.Environment scanning is done by:

-The use of SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis

-Anticipating change, spotting emerging opportunities

-Spotting potential problems early enough to remedy them before they cause damage

Different organisations adopt different approaches and commit different resources to monitoring and evaluating changes in the environment.

Responding to changes in the Responding to changes in the environmentenvironment

Organisations who ignore or fail to read the marketing environment may not survive in the competitive market

Successful organisations anticipate change and spot emerging opportunities

Successful organisations spot potential problems early enough to remedy them before they cause damage

Organisations must be aware of:o Information overloado Problems associated with handling & sorting

informationo Failure to appreciate the significance of information