Learning Outcomes Define the broad categories of factors that affect the marketing environment Explain the distinction between the microenvironment and the macroenvironment Understand the influences at work within each of these categories and their importance to marketing decisions Explain how to conduct environmental scanning and how companies respond to environmental change

Marketing Environment Marketing environment refers to the different factors and forces outside marketing that affect marketing management’s ability to develop and maintain successful transactions with its customers. The environments are: Internal environment Micro environment Macro environment

Marketing Environment

The Internal Environment Marketers and marketing decisions are affected by the structure and politics within their organisation. The internal environment consists of organisational influences such as: Corporate objectives Culture & structure of company Stakeholders Resources These factors determine the scope and conduct of an organisation’s marketing activities.

The Micro-Environment The micro-environment comprises of all the organisations and individuals who directly or indirectly affect the activities of a organisation Customers Intermediaries Suppliers Competitors Banks/lenders Other stakeholders

The Macro-Environment (PESTLE) These are external forces which may not immediately affect the relationship that a company has with its customers, suppliers & intermediaries. But macro- environmental changes will alter the nature of these relationships.

The Macro-Environment (PESTLE) Political/Legal *The EU *National gov’t *Local gov’t *Regulatory bodies *Trade associations Economical *Market structures *Gov’t policy *Trading blocks *Taxation *Interest rates Sociocultural *Demographics *Culture *Attitudes *Current issues *Ethical issues Technological *Products *Materials *Distribution *Marketing/admin Environmental *Climate change *Sustainable sourcing *Product disposal *Natural resources

Political/Legal Changes in the political environment- National/EU/Globally affect business Political stability crucial for market stability Government legislation is a major influence on economic environment & businesses Local/National/European/International law & bylaws all influence business Regulation & deregulation of business sectors Trade associations

Economical Economic growth and unemployment The state of the economy and business cycle Interest rates Competition Personal disposable income Currency fluctuations Central & eastern Europe The BRICS, MINT and other growth economies

Sociocultural Consumer attitudes & changes in taste and fashion for products and services over time Role of women & balance between population of women and men and age distribution Race, subcultures and occupation Attitudes to the elderly The importance of leisure time The role of the family Changes in the structure of population globally Geographical distribution of populations

Technological Allows new goods and services to be offered to consumers New technology can allow existing products to be made more cheaply, thereby lowering an organisations costs and widening their markets Technological development allows for new methods of distributing goods and services (e.g. online marketing and selling) New opportunities for companies to communicate with their target customers

Environmental Consumer concerns have led to demand for: products not tested on animals more natural ingredients in products ingredients from renewable resources and/or processed with minimal environmental impact organic/non-factory farmed produce, particularly in light of the recent debate on genetically modified foods health orientated foods and drinks with minimal artificial additives Recyclable/refillable packaging/minimal packaging Less energy consumption

How to monitor changes in the external environment Environmental scanning - the process of monitoring and analysing the marketing environment of a company. Environment scanning is done by: -The use of SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis -Anticipating change, spotting emerging opportunities -Spotting potential problems early enough to remedy them before they cause damage Different organisations adopt different approaches and commit different resources to monitoring and evaluating changes in the environment.

Responding to changes in the environment Organisations who ignore or fail to read the marketing environment may not survive in the competitive market Successful organisations anticipate change and spot emerging opportunities Successful organisations spot potential problems early enough to remedy them before they cause damage Organisations must be aware of: Information overload Problems associated with handling & sorting information Failure to appreciate the significance of information