Marketing and Company

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LECTURE 3

MARKETING ENVIRONMENT

Learning Objectives

• Describe the environmental forces that affect the company’s ability to serve its customers. • Explain how changes in the demographic and economic environments affect marketing decisions. • Identify the major trends in the firm’s natural and technological environments. • Explain the key changes that occur in the political and cultural environments. • Discuss how companies can react to the marketing environment.

Textbook / Reference

• Armstrong G & Kotler P (2005) Marketing: An Introduction, 7th Edition, Prentice Hall.

• Adcock, Halborg & Ross (2001) Marketing Principles and Practice, 4th Edition, Financial Times Prentice Hall.

Introduction

A company’s marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers. Being successful means being able to adapt the marketing mix to trends and developments in this environment. Changes in the marketing environment are often quick and unpredictable. The marketing environment offers both opportunities and threats. The company must use its marketing research and marketing intelligence systems to monitor the changing environment. Systematic environmental scanning helps marketers to revise and adapt marketing strategies to meet new challenges and opportunities in the marketplace. The marketing environment is made up of a micro-environmental and a macro-environment.

The micro-environment consists of six forces (actors) close to the company that affect its ability to serve its customers:

• The company itself (including departments).
• Suppliers.
• Marketing channel firms (intermediaries).
• Customer markets.
• Competitors.
• Publics.

The macro-environment consists of the larger societal forces that affect the micro-environment:

• Demographic.
• Economic.
• Natural.
• Technological.
• Political.
• Cultural.

Company’s Micro-environment

The company’s micro-environment consists of six actors that affect its ability to serve its customers. These actors combine to make up the company’s value delivery system. These actors are:

The Company

The first actor is the company itself and the role it plays in the micro-environment.

• Top management is responsible for setting the company’s mission, objectives, broad strategies, and policies. • Marketing managers must make decisions within the parameters established by top management. Marketing managers must also work closely with other company departments. Areas such as finance, R & D, purchasing, manufacturing, and accounting all produce better results when aligned by common objectives and goals. • All departments must “think consumer” if the firm is to be successful.

Suppliers

Suppliers are firms and individuals that provide the resources needed by the company and its competitors to produce goods and services. They are an important link in the company’s overall customer “value delivery system.” One consideration is to watch supply availability (such as supply shortages). Another point of concern is the monitoring of price trends of key inputs.

Marketing Intermediaries

Marketing intermediaries are firms that help the company promote, sell, and distribute its goods to final buyers. Resellers are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers who buy and resell merchandise. Resellers often perform important functions more cheaply than the company can perform itself. However, seeking and working with resellers is not easy because of the power that some demand and use.

Physical distribution firms help the company to stock and move goods from their points of origin to their destinations. Examples would be warehouses (that...
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