LESSON
FOUR
SESSION OBJECTIVES
At the end of the session the leaners should be able to;
 Elucidate on the micro environment in the Ugandan context
MARKETING ENVIRONMENT
The company’s marketing environment consist of actors and forces outside marketing that
affect a firm’s ability to build and maintain successful relationships with customers.
Successful companies know the vital importance of constantly watching and adapting to the
changing environment. More than any other group in the company, marketers must be trend
trackers and opportunity seekers. This is because the environment continues to change
rapidly both marketers and consumers wonders what the future will be. By carefully studying
the environment, marketers can adapt their strategies to meet new market place challenges
and opportunities.
The marketing environment is made up of:
 The Micro/ Internal Environment
 The Macro/External environment
The Micro environment consists of actors closed to the company that affect its ability to serve
its customers. These include; Company, Suppliers, Customer Markets, Competitors, Publics
and Marketing Intermediaries while Macro environment on the other hand consist of the large
societal forces that affect the Micro environment and they include; Demography, Economic
IMPORTANT TRENDS IN THE MARKETING ENVIRONMENTs in Marketing and T
• Reengineering. Appointing teams to manage customer-value-building processes and break
down walls between departments.
• Outsourcing. Buying more goods and services from outside domestic or foreign vendors.
• Benchmarking. Studying “best practice companies” to improve performance
• Supplier partnering. Partnering with fewer but better value-adding suppliers
• Customer partnering. Working more closely with customers to add value to their operations
• Merging. Acquiring or merging with firms in the same or complementary industries to gain
economies of scale and scope
• Globalizing. Increasing efforts to “think global” and “act local”
• Flattening. Reducing the number of organizational levels to get closer to the customer
• Focusing. Determining the most profitable businesses and customers and focusing on them
• Justifying. Becoming more accountable by measuring, analyzing, and documenting the
effects of marketing actions
• Accelerating. Designing the organization and setting up processes to respond more quickly
to changes in the environment
• Empowering. Encouraging and empowering personnel to produce more ideas and take more
initiative
• Broadening. Factoring the interests of customers, employees, shareholders, and other
stakeholders into the activities of the enterprise
• Monitoring. Tracking what is said online and elsewhere and studying customers,
competitors, and others to improve business practices
factors, Technological, Natural, Political and Cultural environment.
THE MICRO ENVIRONMENT/ INTERNAL ENVIRONMENT
Marketing departments’ main responsibility is to build relationships with customers by
creating value and satisfaction. However, managers cannot do these alone; there are other
actors in the company’s micro environment which include the following: Other departments,
suppliers, marketing intermediaries, and customers. However, the company’s success will be
affected by two additional groups namely, a set of competitors and a set of publics. Company
management has to watch and plan for all these factors, competitors and various publics.
Since, these departments combined to make up the companys’ value delivery system.
1. The Company
 In designing marketing plant, marketing management takes other companys’ group
into account or consideration groups such as top management, finance, Research and
Development (R&D), purchasing, operations and accounting.
 Top management sets the companys’ mission, objectives, strategies and polices.
Marketing managers must also work with other companys’ departments.
 Finance is concern with findings and using funds to carry out the marketing plan.
 The R&D department focuses on designing safe and attractive products.
 Purchasing worries about getting supplies and materials where as operations is
responsible for producing and distributing the desired quality and quantity of
products.
 Accounting has to measure revenues and cost to help marketing how well it is
achieving its objectives.
Together, all these departments have an impact on the marketing departments’ plans and
action. Under, the marketing concepts, all of these functions must “think consumer.” They
should work in harmony to provide superior customer value satisfaction.
2. The Suppliers
Suppliers are business firms who provide the needed resource to the company and its
competitors to produce the particular goods and services. For example Bakery company must
obtain sugar, wheat, cellophane paper and other materials to produce and package its breads.
Labour, equipment, fuel/electricity and other factors of production are also to be obtained. In
this case, the company must decide whether to purchase or make its own. When the company
decides to buy some of the inputs, it must make certain specification call for tender etc. and
then it segregates the list of suppliers. Usually companies choose the suppliers who offer the
best mix of quality, delivery schedule credit, guarantee and low cost.
They provide resources needed by the company to produce its goods and services. Suppliers’
problems can seriously affect marketing since they form an important link in the companys’
overall customer value delivering system. Therefore:
 Marketing managers must watch supply availability i.e. supply shortages/delays,
labour strikes and other events that can cost sales in the short run and damage the
customer’s satisfaction in the long run.
 Marketing managers should also monitor the price trend on their key input since
rising supply cost may force price increase that can harm the companys’ sales volume.
 Managers should also treat their suppliers as partners so as to create and deliver
customer value.
 Marketing managers should prefer to buy from multiple sources to avoid
overdependence on any one supplier i.e. even for the appendage services to marketing
like marketing research, advertising, sales training etc. the company use service from
outside. This dependency may also create some bottlenecks, at times, due to the
behaviour of these agencies and consequently affect the marketing operations of the
company.
3.
Marketing Intermediaries
Marketing intermediaries are firms that help the company promote, sell and distribute its
goods to final buyers. They include; resellers, physical distribution firm, marketing services
agencies and financial intermediaries.
 Resellers: Are the distribution firms that help that help the company find
customers/make sales of them. They include; wholesalers and retailers who buy and
sell merchandise. Selecting and partnering with sellers is not easy. No longer do the
manufactures have many small independent resellers from which to choose. They now
face large and growing reseller’s organization which frequently have enough power to
dictate terms or even shut the manufacturers out of large market.
 Physical distribution firms: These help the company to stock and move goods from
their points of origin to their destination. Working with ware house and transportation
firms, a company must determine the best ways to store and ship goods balancing
factors such as; cost, delivery, speed and safety.
 Marketing services agencies: These are the marketing research firms, advertising
agencies, media firms and marketing consulting firms that help the company target
and promote its products to the right market. When the company decides to use one of
these agencies, it must choose carefully because these firms vary in creativity, quality,
service and price.
 Financial intermediaries: These include banks, credit companies, insurance
companies and other businesses that help financed transactions against the risks
associated with buying and selling of goods. Most firms and customers depend on
financial intermediaries to finance their transactions.
Like suppliers, marketing intermediaries form an important component of the companys’
value delivery system. In its quest to create the satisfying customers relationships, the
company must do more than just optimized its own performance i.e. it must partner
effectively with marketing intermediaries to optimize the performance of the entire system.
4.
Customer Markets
The marketers must study the customer markets very closely and adapt accordingly to
changes affecting the customers. Failure to satisfy customers’ needs results in loss of such
customers to the competitors. Customers needs and wants are constantly changing and its’
only through research and monitoring that organization can hope to understand its customers.
Understanding customers helps an organization to develop products and services that satisfy
customers. Therefore, customers are the fulcrum around whom the marketing activities of the
organisation revolve. The marketer has to face the following types of customers:
 Customer Markets: Markets for personal consumption.
 Industrial Markets: Goods and services that could become the part of a product in
those industry.
 Institutional Buyers: Institutions like schools, hospital, which buy in bulk.
 Reseller Markets: The organizations buy goods for reselling their products.
 Government Markets: They purchase the products to provide public services.
 International Markets: Consists of Foreign buyers and Governments.
5.
Competitors
The marketing concepts states that to be successful, the company must provide greater
customer value and satisfaction than its competitors do. Thus, marketers must do more than
simply adapting to the needs of target customers. They must also gain the strategic advantage
by positioning their offering strongly against competitor’s offerings in the minds of
consumers. For instance, if one company plans a marketing strategy at one side, there are
number of other companies in the same industry doing such other calculations. Coke has
competitors in Pepsi. Therefore, competition does not come ONLY from the branded
segment but also from the generic market, that is; where there are only few branded products
of rice but there are numerous generic variety of rice according to the local tastes in each
region/country. Sometimes competition comes from different forms. Airlines have to
overcome competitions not only from the other Airlines but also from Railways and Ships.
Basically every company has to identify the competitor, monitor their activities and capture
their moves and maintain customer loyalty. Hence every company comes out with their own
marketing strategies.
6.
Publics
The company marketing environment also includes various public. A public is any group that
has an actual or potential interest in or impact on an organizations’ ability to achieve its
objectives. The following are the various types of public:
Financial public: These influence the companys’ ability to obtain funds. Banks and stock
holders are the major financial public i.e. they influence the public to get funds.
Media public: These carries news, features and editorial opinion. They include news papers,
magazines, radios and television stations.
Government public: Here, management must take the government involvements in to
account i.e. marketers must consult the company lawyers on issues of product safety,
advertising among others.
Citizens action public: A companys’ marketing decisions may be questioned/affected by
consumer organizations, minority groups etc
Local public: These include neighborhood residents and community organizations. Large
companies usually appoint a community relation officers to deal with the community i.e.
attend meetings, answer questions and contributes to worthwhile.
General public: A company needs to be concerned about general attitudes to award its
products and activities. The public image of the company affects its buying.
Internal public: These include; workers, managers, volunteers and the board of directors.
When employees feel good about their company; their positive attitudes spills over to the
external public.