1. Marketing: An Introduction Armstrong, Kotler
Chapter Three
The Marketing Environment

2. Looking Ahead
Describe the environmental forces that affect the company’s ability to serve its customers.
Explain how changes in the demographic and economic environments affect marketing decisions.
Identify the major trends in the firm’s natural and technological environments.
Explain the key changes in the political and cultural environments.
Discuss how companies can react to the marketing environment.

3. The Marketing Environment
Actors and forces outside marketing that affect our business and our marketing management’s ability to maintain solid relationship with our target market “customers”.

4. The Marketing Environment
1- Microenvironment; Actors who close to the company that affect its ability to serve its customers ( the company, suppliers, intermediaries, customer markets, competitors, and publics. Figure 1
2- Macroenvironment; Societal forces that affect the microenvironment ( Demographic, economic, technology, politics, and culture). Considered to be beyond the control of the organization. Figure 2

5. Figure 1 Intermediaries Customers Suppliers Competitors The Company
Publics
Marketing

6. Figure 2 Natural Technological Economic Political Demographic Cultural
Company

7. The Marketing Environment
Microenvironment
1- The company; Areas inside the company like its mission, objectives, and strategies. All departments must “think consumer” and work together to provide superior customer value and satisfaction.
2- Suppliers; who provide the company with raw materials, play an important rule in customer satisfaction (Delivery on time, quality, and price). Most marketers treat suppliers like partners.

8. The Marketing Environment
Microenvironment
3- Marketing intermediaries; Help the company to promote, sell and distribute its goods to final buyers.
resellers and wholesalers who sell our products to the end users. marketing service agencies are marketing research firms, advertising agencies, media firms. financial intermediaries like banks, credit unions, insurance companies.

9. The Marketing Environment
Microenvironment
4- Customers ; four types of customers.
Consumers who buy for personal use.
Business buyers who buy for the use of the company.
Government buyers who buy on behalf of public services. and its agencies.
International markets, are buyers and sellers out of the country.

10. The Marketing Environment
Microenvironment
5- Competitors
Those who serve a target market with products and services that are viewed by consumers as being reasonable substitutes.
Company must gain strategic advantage against these organizations.
Company size and industry position determines best competitive strategy.

11. The Marketing Environment
Microenvironment
6- Publics; Group that has an interest in or impact on an organization's ability to achieve its objectives.
Financial publics; help the company obtain funds
Media publics; carry news, reporters.
Government publics; lawyers. Business law
Citizen action publics; consumer organizations, environmental groups
Local publics; neighborhood
General publics; create the image
Internal publics; workers, employees, managers

12. The Marketing Environment
Macroenvironment
1- Demographic environment; The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.
Marketers track changing age and family structures, geographic population shifts, educational characteristics and population diversity.

13. The Marketing Environment
Macroenvironment
2- Economic Environment;
All those factors that affect consumer buying power and spending patterns.
Income levels and distribution.
The “necessity” of products.
Changes in trends and consumer spending patterns.
Economies of different nations

14. The Marketing Environment
Macroenvironment
3- Natural Environment; Involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities.
- Shortages of materials; limited
- Increased pollution; air/water pollutants
- Increase the government intervention.
Companies should respond to that by developing environmental sustainable strategies like recyclable products…etc

15. The Marketing Environment
Macroenvironment
4- Technological environment;
New technologies create new markets and opportunities. As products and technology become more complex, the public needs to know that they are safe.
Challenge is to make practical, affordable products.
Safety regulations result in higher research costs.

16. The Marketing Environment
Macroenvironment
5- Political Environment; Includes laws, government agencies and pressure groups that influence or limit various organizations and individuals in a given society.
-Increasing legislation and government agencies; Reasons; to protect companies from each other, to protect customers from unfair business practices, and to protect the interest of society.
-More emphasis on ethics and socially responsible actions. The boom in e-commerce and internet marketing has created a new set of social and ethical issues. Cause- related marketing means fund-raising campaign.

17. The Marketing Environment
Macroenvironment
Key Political/Legal Issues
Fair competition.
Fair trade practices.
Environmental protection.
Product safety.
Truth in advertising.
Packaging and labeling.
Pricing.

18. The Marketing Environment
Macroenvironment
6- Cultural environment; It’s made up institutions and other forces that affect the society’s basic values, perceptions, preferences, and behaviors.
Marketers watch the shifts in the cultural values. Some firms offer “future” forecasts in this connection. People’s view of them-selves, of the others, of the organizations, of the society, of the nature, and of the universe.

19. The Marketing Environment
Responding to the marketing environment
- those who make things happen
- those who watch things happen
- those who wonder what’s happening
Companies should take environmental management perspective rather than watching and reacting.
The trend now for globalization and free-trade zones.