The Marketing Environment

The market environment is a marketing term and refers to factors and forces that affect a firm's ability to build and maintain successful relationships with customers.

Environment offers both opportunities and threats

Marketing Environment includes:
• Micro-environment
• Macro-environment




Micro-environment

Micro-environmental factors affect the degree to which a company achieves customer satisfaction. 

Micro-environmental forces are those that are distinct and individual, such as customers, producers, marketing intermediaries, public entities and the company itself.

The company: When design a marketing campaign, the marketing manager have to consider about company departments such as top management, finance, R&D, purchase, manufacturing and accounting….all of them called internal environment.

Suppliers play an essential role in providing enough to firms so that they can produce products to fulfill their consumers’ needs and wants.

Marketing intermediaries are the useful tools or partners with firms. Through them, companies have ability of promoting, selling distributing products to their customers (Kotler).

Consumers are the basic part of firms’ gaining profits. Every strategy or approach of companies will be decided based on consumers (Kotler).

Competitor: In every market, all firms have to face with the thread of competition (Porter). Therefore, to gain more market share than competitors, companies have responsibility for providing right and better value to satisfy their consumers’ demand.

Public are the especial groups because they have ability of causing negative or positive effects on firms not by purchasing products, but by potential impacts on organization.

Macro-environment

The major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies. These factors include the economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces.

Demographic forces

This is the study of human populations in terms of size, density, location, age, gender, race, occupation and other statistics.

Changing Age Structure of the Population

Generational marketing is important in segmenting people by life style of life state instead of age.

Baby boomers (1946 – 1964): Includes most affluent Asians

Generation X (1965 – 1976): Emphasize quality of life

Generation Y (1987 – 1994) : The internet generation

The Changing Family

More people are:

• Divorcing or separating
• Choosing not to marry
• Choosing to marry later
• Marrying without intending to have children
• Higher divorce rates
• Increased number of working women
• More stay-at-home dads

Geographic Shifts in Population

Trends include:

• Migratory movements between and within countries
• Moving from rural to metropolitan areas
• Changes in where people work
• Telecommuting
• Home office

Changes in the Workforce

Trends include:

• More educated
• More white collar
• More professional

Markets are becoming more diverse

• International
• National
• Ethnicity
• Gay and lesbian
• Disabled

Economic Environment

Economic environment consists of factors that affect consumer purchasing power and spending patterns.

Income distribution

• Upper-class consumers

• Middle-class consumers

• Working-class consumers

• Underclass consumers

Natural Environment

Natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities.

Factors impacting the natural environment:

• Shortages of raw materials

• Increased pollution

• Increased government intervention

• Environmentally sustainable strategies

Technological Environment

Most dramatic force in changing the market place with many positive and negative effects

Provides new markets and new opportunities:

> Internet  

> Weapons

> Credit cards 

> Medicine

> Communication 

> Miniaturization

Political Environment

Political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.

Cultural Environment

The cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors.

Core beliefs and values are passed on from parents to children and reinforced by schools, religious institutions, business and government.

Secondary beliefs and values  are more open to change.