Chapter 4: Marketing Environment
The market environment is made up of micro and macro environment. The micro
environment consists of factors close to company that effect the ability to serve its
customers for example, the company itself or marketing channel firm. The macro
environment consists of larger societal forces that effect the entire environment for
example, demographic, economic, natural, technology.
The company’s microenvironment
1. The company: Market manager must work closely with the top management
and company departments. The six factors that affect the micro environment are
supplier, company, competitor, market intermediary, customer, and publics.
2. Existing competitors: The market concept holds a successful company must
satisfy the needs and wants of consumers better than their competitors.
3. Suppliers: Suppliers are firms and individuals that provide the resources
needed by the company to produce it goods and services.
4. Market intermediary: Special group of supplier that help the company to
promote, sell, distribute its good to final buyers such as transportation system,
market service agencies, financial intermediaries.
5. Customer
6. Public: Public is any group that has an actual or potential interest in or impact
on an organization’s ability to achieve its objectives.
The company’s macroenvironment (7 forces)
1. Future competitors; barriers to entry, exit, and competition (two forces; the
ability of companies to enter and exit markets)
2. Demographic Environment: It is the study of human populations in term of
size and etc. Demographic change over time and companies must keep up with
them.
 Key U.S. Demographic Trend
- The most important demographic trend in U.W. is the change age
structure of population age distribution of U.S.; Baby Boomer, Generation
X, Millenniums.
 Increasing diversity
- The changing America family, Geographic shifts in population, for
example moving to a new location, they need to understand both national
and local geographic trend relating to shifting population.
- Better education, more white collar, more professional; the rising number
on educated people will increase in the demand of quality product.
3. Economic Environment: The economic environment includes factors affecting
consumer purchasing power and spending patterns
- Change in income and change in consumer spending patterns make
customer spend more carefully and seek greater value in the products
and service they buy.
4. Natural Environment: The natural environment involves natural resources
needed as inputs by marketer or that are affected by market activities.
- The natural environment consists of many amenities that attract tourist
such forests, clean beaches.
- Anyone involves in tourism has an obligation to protect the environment
and develop sustainable tourism to global warming; Maldives under
ocean.
5. Technological environment: The most dramatic force shaping our destiny is
technology which has given us wireless access to the Internet, the ability to send
documents around the globe electronically, and relatively inexpensive
transportation to other parts of the world. It has also released such horrors as
nuclear missiles, chemical weapons, and products with mixed blessings, such as
television and the automobile.
- Many products that are taken for granted today either were uncommon
or did not exist thirty years ago: cell phones, copier machines, fast food
chains, personal computers, jet airplanes, and all-suite
- Technology has affected the hospitality industry in many ways such as
computerized video check out service, Internet created a new
distribution channel for hospitality and travel products.
6. Political Environment: Marketing decisions are strongly affected by
developments in the political environment.
- Law, government agencies, and pressure groups that influence and limit
the activities of various organization and individuals in society.
7. Cultural Environment: The cultural environment includes institutions and
other forces that affect society’s basic values, perception, preference, behave.
- Subcultures; each society contains subcultures, groups of people with
shared value systems based on common life experiences or situations.
- Persistence of cultural values
- The cultural environment includes institutions and other factors