Marketing Environment Analysis: Micro and Macro Factors Explained

This assignment provides a comprehensive overview of the marketing environment, a crucial concept in the field of marketing. It delves into the two primary components of the marketing environment: the microenvironment and the macroenvironment. The microenvironment is examined in detail, focusing on the actors close to the company that influence its ability to serve customers, including the company itself, suppliers, marketing intermediaries (resellers, physical distribution firms, marketing service agencies, and financial intermediaries), competitors, various publics (financial, media, government, citizen-action, local, general, and internal), and the different types of customer markets (consumer, business, reseller, government, and international). The macroenvironment, comprising larger social forces beyond the company's direct control, is also thoroughly analyzed, covering demographic, economic, natural, technological, political, and cultural environments. Each of these factors and their respective trends are explained, providing a solid understanding of how external forces impact marketing decisions and strategies, referencing the work of Kotler & Armstrong's "Principles of Marketing" 12th edition.

Chapter Two
Analyzing the Marketing Environment
P R I N C I P L E S O F
MARKETING
Mohamed Niyas

Analyzing the Marketing Environment
• The Company’s Microenvironment
• The Company’s Macro environment
• Responding to the Marketing Environment
Topic Outline

The marketing environment includes the actors and
forces outside marketing that affect marketing
management’s ability to build and maintain successful
relationships with customers.
The marketing environment has two components, such as
1. Micro environment
2. Macro environment

Microenvironment consists of the actors close to the
company that affect its ability to serve its customers.
Which includes

In designing marketing plans, marketing
management takes other company groups into
account, such as
• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting
The Company

Suppliers provide the resources needed by the
company to produce goods and services and their
problems can seriously affect marketing.
Suppliers
Marketing Intermediaries
Marketing intermediaries are firms that help the
company to promote, sell and distribute its products
to final buyers. They can take the following forms
1. Resellers
2. Physical distribution firms
3. Marketing service agencies
4. Financial intermediaries

Competitors are the firms which offer similar products
to satisfy the needs and wants of same target
customers.
So, Firms must gain strategic advantage by positioning
their offerings against competitors’ offerings.
Competitors
Public
Public means any group that has an actual or potential
interest in or impact on an organization’s ability to
achieve its objectives. Which includes Financial publics,
Media publics, Government publics, Citizen-action
publics, Local publics, General public, Internal publics.

Customers are the most important actors in the companies
micro environment. The aim of entire value delivery
system is to serve target customers and create strong
relationship with them. There are five types of customer
markets.
1. Consumer market –
2. Business markets –
3. Resellers market –
4. Government market –
5. International market –
Customers

Macroenvironment is the largest social forces that
affect the microenvironment and the forces which
can not be controlled by the company with its own
action. These factors are also called as uncontrollable
factors. This ME include

Demography is the study of human populations in terms of
size, density, location, age, gender, race, occupation, and
other statistics
• Demographic environment is important because it
involves people, and people make up markets
• Demographic trends include age, family structure,
geographic population shifts, educational characteristics,
and population diversity
Demographic Environment

Economic environment consists of factors that affect
consumer purchasing power and spending patterns.
The available purchasing power in an economy depends on
“current income, prices, savings, debts and credit availability”
The three different kinds of economies are
• Industrial economies are richer markets
• Subsistence economies consume most of their own
agriculture and industrial output
• Developing economies which can offer outstanding
marketing opportunities for the right kinds of product.
Economic Environment

Natural environment involves the natural resources that
are needed as inputs by marketers or that are affected
by marketing activities. Marketers should be aware of
several trends in the natural environment. Such as
• Shortages of raw materials
• Increased pollution
• Increase government intervention
• Environmentally sustainable strategies
Natural Environment

Technological Environment forces that create new
technologies, creating new product and market
opportunities.
The marketer should monitor the following trends in
technology
• Rapid change in technology
• Opportunities for innovation
• Changing R & D budgets
• Increased regulation of technological change
Technological Environment

Political environment consists of laws, government
agencies, and pressure groups that influence or limit
various organizations and individuals in a given society.
It influence the marketers in following ways
• Legislation regulating business
– Increased legislation
– Changing government agency enforcement
– New forms of nontariff barriers in trade
• Increased emphasis on ethics
– Socially responsible behavior
– Cause-related marketing
Political Environment

Cultural environment consists of institutions and other
forces that affect a society’s basic values, perceptions,
and behaviors.
The following cultural characteristics can affect marketing
decision making
• Core beliefs and values are persistent and are passed on from
parents to children and are reinforced by schools, religious
institutions, businesses, and government
• Secondary beliefs and values are more open to change and
include people’s views of themselves, others, organization,
society, nature, and the universe
Cultural Environment

Uncontrollable
• React and
adapt to
forces in the
environment
Proactive
• Aggressive
actions to
affect forces
in the
environment
Reactive
• Watching and
reacting to
forces in the
environment
Reference Book :
Kotler & Armstrong (2007) Principles of Marketing12th edition, Prentice Hall, New
Delhi