Bronis Verhage
ISBN: 9789001818661
http://www.marketingfundamentals.noordhoff.nl
© 2016 Noordhoff Uitgevers bv
GLOSSARY
Chapter 3 The marketing environment
Microenvironmental factors Departments (e.g. production) and resources (e.g.
financial means) that are part of the organization, but outside of the marketing
department (Internal environmental factors).
Internal environment A company’s functional areas or departments – including the
organizational structure and corporate culture – and its available resources (financial,
commercial, technical, natural and human) that it may use to achieve its objectives.
External environment Influences and groups originating outside the organization in
the macro- and meso-environment that are uncontrollable, but influence its strategy
and performance.
Environmental analysis Monitoring and evaluating the company’s external
environment to identify opportunities and threats.
Environmental scanning Collecting information about relevant elements of a
company’s environment.
Environmental diagnosis Evaluation of the significance of opportunities and threats
disclosed by an environmental analysis.
Mesoenvironmental factors The firm’s immediate external environment in
which it interacts with customers, suppliers, intermediaries, competitors and
public groups that, while uncontrollable, can be influenced.
Customer Ultimate consumer or organization that buys or rents products and
services.
Reseller A wholesaler, retailer or other intermediary that buys and resells products
without any further processing at a profit.
Market segment Group of customers with distinct needs, wants, and other common
characteristics that may be approached with a tailored marketing strategy (Segment).
Supplier marketing A buyer’s proactive approach throughout the purchasing process
in strategically ‘managing’ suppliers to reduce the cost of products and services bought
(Procurement marketing).
Ma rk eti n g Fu n da m e n tal s, An In t e rn ati o n al P e r sp e ctiv e
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Multiple sourcing System through which a company buys from several suppliers in
order to reduce its costs and dependency on any one supplier.
Intermediary Middleman, such as a distributor, marketing research or logistics
company that operates as a link between producer and consumers and provides
services to facilitate transactions.
Utility The extent to which a product or service satisfies the needs and wants of a
consumer or an organization.
Time utility The added value by making a product available to consumers when
desired.
Place utility The added value by making a product available wherever consumers
want it.
Brand competition Competition between brands of the same product type that are
substitutes because they are similar (e.g. Grolsch and Heineken lager beer).
Product competition Competition between different types of products within a
particular product category (such as between lager, malt, and bock beer).
Generic competition Competition between alternative product lines (such as beer,
wine, and whiskey) that may satisfy the same consumer need.
Need competition Rivalry between different kinds of needs on which the consumer is
willing to spend money (e.g. exotic cruise versus remodeling the home).
Strategic group Group of competitors with common strategic features (e.g. location,
size), strengths (product range, distribution intensity) and strategies (growth strategies,
positioning).
Benchmarking Comparison of your own business performance and strategies with
those of other organizations in order to improve them.
Public group Individuals, companies, the government, investors and other groups that
may influence – and are affected by – how a firm achieves its objectives.
Trade organization Organization – representing a group of businesses – that
promotes collaboration, standardization, or education within an industry.
Ma rk eti n g Fu n da m e n tal s, An In t e rn ati o n al P e r sp e ctiv e
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Macroenvironmental factors Outside forces (e.g. the economic climate) that a firm
can neither control nor influence, but do affect its strategies and performance.
Market A group of potential buyers or organizations with needs and wants that a
company can satisfy by providing certain products or services. The term market may
also refer to the quantity of goods sold in a specific period.
Trend Pattern of a phenomenon over time (e.g. the growing number of households)
that is part of the external environment and may lead to marketing opportunities.
Demographic factors Characteristics of a human population – such as its size, birth
rate, and composition – that greatly affect a firm’s markets.
Degree of urbanisation Percentage of the population living in cities.
Household Basic residential unit (such as spouses or roommates) in which economic
production and consumption are organized and carried out.
Economic factors Indicators of the economic environment, such as consumer
purchasing power, inflation, interest rates, exports, unemployment and the retail price
index.
Disposable personal income A consumer’s after-tax income available for spending
and savings.
Political-legal factors Government policies, laws and regulations that affect marketing
practice.
Lobbying Influencing government officials to create legislation to enact, defeat or
change certain laws, or to conduct other activities to protect a company’s interests.
Physical factors Environmental or ecological factors that managers consider when
deciding about using scarce natural resources or limiting noise, air, water, and soil
pollution.
Green marketing Developing or modifying and marketing products that are
environmentally safe, which may include changing the production process, packaging,
and promotion strategies.
Ma rk eti n g Fu n da m e n tal s, An In t e rn ati o n al P e r sp e ctiv e
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Technological factors Technology-related influences on a company’s external
environment, such as new ways to increase efficiency or solve problems.
Consumption pattern Consumers’ buying habits, use and eventual disposal of
products.
Scanning Use of barcodes to identify products in a distribution system or to create a
database of sales per store, enabling automated inventory management as an input for
strategy development.
Market-pull Strategy in which changing customer needs or preferences trigger a
search for technological innovation that leads to better products (Demand-pull).
Technology push Strategy in which technological breakthroughs (e.g. in space
exploration) motivate product developers to look for suitable applications in consumer
markets.
Substitute Product or service that can easily replace a similar product or service.
Sociocultural factors Customs, values, and behavioural norms that consumers learn
and that influence their life style and consumption habits.
Values The beliefs, preferences, and prejudices that influence someone’s world view.
Consumerism Consumers’ empowerment to protect them from unfair business
practices and promote information transparency.
Ethics Someone’s moral principles, values and personal standards (a deeply rooted
sense of what’s right or wrong) that affect his actions and decisions.
Marketing ethics A marketer’s principles and ethical standards that guide his
marketing decisions and behaviour.
Corporate culture The norms, ideas and values that the members of an organization
share, which influence the way they think and communicate as well as their
relationships and management style.
Social responsibility An organization’s commitment to maximize its positive and to
minimize its negative impact on society.
Ma rk eti n g Fu n da m e n tal s, An In t e rn ati o n al P e r sp e ctiv e
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Cause-related marketing Strategic approach to corporate philanthropy through
linking the company’s products to a social issue, usually by contributing money for
each product that consumers buy.
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