Palmer: Introduction to Marketing
THE MARKETING ENVIRONMENT
Chapter 2
SESSION OVERVIEW
This session will:
• explore the external influences on
marketing
• show how marketers must respond to a
constantly changing social, economic,
technical and political environment
• identify the internal environment of an
organisation as crucial for the success
of marketing plans
DEFINITION OF THE MARKETING
ENVIRONMENT
• "... the individuals, organisations and forces
external to the marketing management
function of an organisation that impinge on
the marketing management's ability to
develop and maintain successful exchanges
with its customers"
COMPONENTS OF THE
MARKETING ENVIRONMENT
• Micro-environment
• Macro-environment
• Internal environment
THE MICRO-ENVIRONMENT
Comprises all those organisations and
individuals who directly or indirectly
affect the activities of a company. It
includes:
– Customers
– Intermediaries
– Suppliers
– Other stakeholders
STAKEHOLDERS OF
ORGANISATIONS
• Stakeholders include:
–
–
–
–
–
–
–
Customers
employees
local communities
government
intermediaries
suppliers
financial community
THE VALUE CHAIN
• Raw materials are progressively transformed
by members of the micro-environment into
high value products
• Only the consumer can define value added
THE VALUE CHAIN
A value chain for coffee
RELATIONSHIPS BETWEEN MEMBERS
OF THE MICRO-ENVIRONMENT
• Organisations that
make up a firm’s
micro-environment
are referred to as
the “environmental
set”
• Membership and
relationships
between them
change over time
THE MACRO-ENVIRONMENT
Comprises general forces and trends
rather than specific organisations:
– Macro-economic environment
– Political environment
– Social and cultural environment
– Demographic environment
– Technological environment
– Ecological environment
MACRO-ECONOMIC
ENVIRONMENT
• How much money
do consumers have
available to spend?
• How much will they
have in the future?
• How fierce is
competition in the
market?
POLITICAL ENVIRONMENT
• What are politicians
saying that might
affect our customers
and our marketing
activities?
• Cuts in government
spending?? New tax
allowances??
• What external
pressures are
influencing politicians?
SOCIAL AND CULTURAL
ENVIRONMENT
What will be the
challenges and
opportunities arising
from greater cultural
diversity?
Cultural convergence
or a greater need for
cultural identity?
Attitudes to 24/7
society?
DEMOGRAPHIC ENVIRONMENT
• More affluent, fit,
elderly people in the
population
• What other
demographic trends
have marketers
reacted to?
• What changes should
they be anticipating?
TECHNOLOGICAL ENVIRONMENT
How will new
technology affect
marketing?
• new products?
• new promotional
media?
• new distribution
channels?
ECOLOGICAL ENVIRONMENT
• Growing concern
about the ecological
environment – e.g.
global warming
• Ecological
environment is a
resource for
business
• Good marketers
need to be seen not
to harm it
MONITORING AND RESPONDING TO
ENVIRONMENTAL CHANGE
• Organisations that do not adapt may
decline and die
• To avoid this, organisations must:
– understand what is going on in their
business environment
– respond and adapt to this change
• Information about the environment is
crucial, but won’t produce decisions
SWOT ANALYSIS
• A framework for
understanding
internal strengths
and weaknesses
• These are matched
against external
opportunities and
threats
THE INTERNAL ENVIRONMENT
• Other internal functions, e.g. finance,
operations, personnel impinge on the
marketing function
• Marketing is affected by:
– organisational processes
– the allocation of responsibilities within the
organisation
DON’T FORGET THE WORKERS….
• In many services companies, marketing
plans will be difficult to implement by a
“bad employer”
• Timpson is a highly rated employer contributes to marketing success
THE FLEXIBLE ORGANISATION
• Flexibility is needed to respond to
environmental change
• Requires flexible labour force
• The organisation should be able to rapidly
downsize / expand capacity
SUMMARY OF KEY POINTS
• Value is created through interaction with other
individuals and organizations that make up the
marketing environment.
• The marketing environment cannot be neatly
divided into distinct areas. A good marketer
should understand the complex linkages
between different parts of the environment.
• Micro-environment influences may demand
urgent attention, but macro-environment
influences can have a more profound longterm effect on an organization’s marketing.