1. University of Sri Jayewardenepura
1st Semester 2014
University of Sri Jayewardenepura

3. Session Outline The Company’s Microenvironment
The Company’s Macroenvironment
Demographic Environment
Economic Environment
Natural Environment
Technological Environment
Political and Legal Environment
Cultural Environment
Responding to the Marketing Environment

4. The Marketing Environment
The actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.

5. Analyzing Methods of Environment
Internal & External Environmental Analysis
Micro & Macro Environmental Analysis

6. Marketing Environment
Analyzing Methods (Cont.)
Marketing Environment
Internal Environment
External Environment
Forces
External Stakeholders
Internal Stakeholders

7. Marketing Environment
Analyzing Methods (Cont.)
Marketing Environment
Micro Environment
Macro Environment
External Stakeholders
Internal Stakeholders
Forces

8. The Company’s Microenvironment
The actors close to the company that affect its ability to serve its customers – the company, suppliers, marketing intermediaries, customer markets, competitors and publics. 8

9. Actors in the Microenvironment

10. Actors in the Microenvironment
The company
Top management, finance, R&D, purchasing, operations and accounting.
Affect the marketing department’s plans.
Suppliers
Provide resources needed to produce goods and services.
Important link in the “value delivery system”.
Marketing intermediaries
Help the company to promote, sell, and distribute its goods to final buyers. 10

11. Competitors Publics Actors (Cont.)
Those who serve a target market with similar products and services.
Company must gain strategic advantage against these organizations.
Publics
Groups that has an actual or potential interest in or impact on an organization's ability to achieve its objectives.
Seven Types of Publics.

12. Customers 1. Consumer markets Actors (Cont.)
Customers are the most important actors in the company’s micro environment.
Five Types of Markets
1. Consumer markets
2. Business markets
3. Reseller markets
4. Government markets
5. International markets 12

13. The Company’s Macroenvironment
The larger societal forces that affect the microenvironment - demographic, economic, natural, technological, political and cultural forces.

14. Major Forces in the Company’s Macroenvironment

15. Fads, Trends and Mega Trends
Fad - Unpredictable, short-lived, and without social, economic, and political significance.
Trend - A direction or sequence of events with momentum and durability. Trends are more predictable and durable than a fad; trends reveal the shape of the future and can provide strategic direction.
Megatrend - Large social, economic, political, and technological changes (that) are slow to form, and once in place, influences us for some time between seven and ten years, or longer. 15

16. Demographic Environment
Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. 16

17. Trends in Demographic Environment
Increasing Population
Growing Middle Class
Growth in the Rural Population
A Changing Family System
The Changing Role of Women
Better-Educated , More White-Collared, More Professional Population
Increasing Diversity

18. Economic Environment
Economic environment consists of factors that affect consumer purchasing power and spending patterns.

19. Stages of Business Cycle Outsourcing and free trade
Inflation
Income Distribution
Unemployment
Stages of Business Cycle
Economic
Environment
Spending patterns
Savings, credit
availability
Outsourcing and free trade
Interest rates 19

20. Natural Environment
This CTR relates to the material on pp
Natural Environment
The natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities.
Natural Environment
There are several areas affecting marketing that stem from the natural environment.
Shortages of Raw Materials. Shortages both increase demand and sprout counter-movements aimed at conservation.
Discussion Note: Both sides of the "green" movement utilize sophisticated database marketing and lobbying techniques.
Energy Costs. The cost of energy makes long-term growth of high energy industries and goods difficult to predict.
Increased Pollution. Industrial growth almost always damages the natural environment. The so-called “green movement” seeks to operate businesses in such a way so as not to damage the natural environment. The varying political power of “greens” in different countries is a consideration in global marketing efforts.
Government Intervention in Natural Resource Management. Changing philosophies on the role of government in managing natural resources also blends into the legal environment. Marketers must take care in identifying natural environmental trends.
Discussion Note: You might further expand this discussion by pointing out that even agencies like the EPA vary greatly in the amount of environmental regulation they perform depending upon funding and the agenda of whoever occupies the White House. 20

21. Key Areas of Concern in the Natural Environment
Shortage of Raw Materials
Increased pollution
Increased government intervention
Environmental sustainability
Anti pollution pressures
Increased energy costs

22. Technological Environment
Forces that create new technologies, creating new product and market opportunities.

23. Technological Trends Accelerating pace of change
Unlimited opportunities for innovation
Varying R & D budgets
Increased regulation of technological change

24. Political - Legal Environment
Laws, government agencies and pressure groups that influence and limit various organizations and individuals in a given society.
To protect
companies
To protect
consumers
To protect
society 24

25. Trends in Political & Legal Environment
Legislation Regulating Business
Increasing Legislation
Changing Government Agency Enforcement
New Forms of Nontariff Barriers in Trade
Growth of Special Interests Groups

26. Social-Cultural Environment
Institutions and other forces that affect society’s basic values, perceptions, preferences and behaviours.

27. Trends in the Social-cultural Environment
Increased Emphasis on Ethics and Socially Responsible Actions
Socially Responsible Behaviour
Cause-Related Marketing
Persistence of Cultural Values
Shifts in Secondary Cultural Values
Existence of Subcultures
The major cultural values of a society are expressed in people’s views of themselves and others, as well as in their views of organizations, society, nature, and the universe.

28. Responding to the Marketing Environment

29. Summary and Conclusions