DYNAMICS OF THE
MARKETING ENVIRONMENT
PRESENTATION
TO
COVENANT UNIVERSITY STUDENTS
OCTOBER 31, 2022
by
Williams Odah
Learning Outcomes
• Understand the factors and trends in the marketing environment and how they affect
marketing
➢Define the marketing environment
➢List the 3 types of marketing environment
➢Mention at least one frame for analysing each type of the marketing environment.
The Marketing Environment
• Marketing environment – The broad environment in which an organisation
operates and the impact that various factors and forces can have on any
marketing enterprise and its customers.
The Marketing Environment
• The marketing environment are divided into:
oExternal macro environment
oExternal micro environment
oInternal environment
The External & Internal Marketing Environment
• Macro Environment – The broad environmental factors that are external to an
organisation’s market and industry, such as laws and regulation, changes to the economy
and new technologies. These factors are outside the organisation’s control.
• Micro Environment – The organisation’s close external environment, including its
competitors, customers, distribution channels, suppliers, and other relevant stakeholders.
• Internal Environment – “Those cultural, social and economic factors that are contained
within the organisation itself.” (Blythe and Martin, 2019).
Frameworks for Understanding the Macro
Environment
PEST
PESTELE
SLEPT
STEEPLE
PESTELO
PESTER
Political
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Economic
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Social & cultural
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Technological
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Environmental
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Legal
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✓ inc legal
Regulatory
Ethics & CSR
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On-line
Other letters are used as in the table above
Analysing The Macro Environment
PESTER
P
Political
Government change, new policy, politics at global, national or regional levels e.g. stricter
packaging laws after an election that causes cost impact for a company
E
Economic
Trends in consumption, taxation inflation and unemployment impacting on the ability to
buy, changes in exchange rate etc
S
Social & cultural
Changes in society, demographics, ethnicity etc. E.g. growth of an ethnic group
T
Technological
New technologies, internet, mobile phones
E
Environmental
Considering the ‘green’, ethical and social responsibility issues and how they affect the
company
R
Regulation
Regulations that govern industries, likely constraints on marketing and production e.g
APCON, NAFDAC
External Micro Environment
Competitors
Potential entrants
Bargaining
power
Threat of
entrants
Competitive
Rivalry
Suppliers
Threat of
substitutes
Bargaining
power
Substitutes
Porters Five Forces (Porter, 2008)
This considers competition:
Buyers
External Micro Environment
Stakeholders
• Stakeholder mapping is an important aspect to auditing the micro external
environment.
• The aim of stakeholder mapping is to identify all of the different stakeholders for
an organization and consider what level of interest they have and what power
they have to influence it.
• External stakeholders – such as finance providers, media, regulators, interest
groups, government and journalists
• Connected stakeholders – such as distributors, suppliers and shareholders
External Micro Environment
Stakeholders
Interest
Low
High
Low
E.g. interns
E.g. small
shareholders
High
E.g. media
journalists
E.g. key
customers
Power
Mendelow’s matrix
A useful model which categorizes stakeholders according to their level of interest and power
Framework for Understanding Internal
Environment
5Ms
• Internal factors and resources are 5Ms:
o Manpower
o Money
o Materials
o Methods
o Machinery
Internal Environment
Considerations
• The resources available – including people, finance and materials
• The quality, knowledge, skills, experience and training of our staff
• The ability of management
• The quality of our production facilities and quality of IT systems and databases
• The quality of R & D (Research & Development) or ability to create new products
• Market position of products/services, their market share & profitability.
• Effectiveness of marketing communications
• Corporate goals and objectives which drive and shape the direction & approach
taken
• Culture of the organization – its mission & values, way of working, policies,
systems, procedures and approach to risk.
Internal Environment
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
SWOT is a useful tool for summarizing and structuring the results of the external and internal environmental audits
Impact on the Marketing
Planning Process
• The identification and assessment of the macro, micro and internal factors
provide essential information for the plan – helping to determine its direction and
robustness.
• It provides a benchmark or starting point for ‘where are we now?’ including
internal strengths and weaknesses and external opportunities and threats.
• These will influence the mission or vision and objectives set at both corporate
and marketing level ‘where do we want to be?’ and the choice of strategy and
tactics adopted ‘how do we want to get there?’
• The organization needs to assess its relative competence in the quality of its
products versus competitors, its distribution, pricing, the quality and skills of its
staff and customer service and the effect of its communications.
• The strengths, weaknesses and resource constraints will then influence the
setting of objectives for the new plan – ensuring that the objectives are
reasonable and achievable and the choice of strategy to be adopted
THANK YOU!