The document discusses the marketing environment and its components. It identifies three key elements of the marketing environment: the internal environment, the microenvironment, and the macroenvironment. The internal environment includes internal stakeholders and functional areas. The microenvironment consists of suppliers, customers, competitors, and public groups. The macroenvironment includes large societal forces such as political, economic, technological, cultural factors that shape opportunities and threats beyond a firm's control. Understanding how these environmental factors impact marketing management is essential for effective planning and competition.

1. 2nd Chapter
MARKETING ENVIRONMENT
By
Asst Prof. Venkatesh.N
Koshys Institute of Management Studies
02/08/14
Koshys Institute of Management
Studies by Venkatesh.N
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2. Marketing Environment
• The marketing environment surrounds and impacts
upon the organization.
• There are three key elements to the marketing
environment which are the internal environment,
the microenvironment and the macro environment. Why
are they important? Well marketers build
both internal and external relationships. Marketers aim
to deliver value to satisfied customers, so we need to
assess and evaluate our internal business/corporate
environment and our external environment which is
subdivided into micro and macro.
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3. The market environment
• The market environment refers to all of the forces
outside of marketing that affect marketing
managements ability to build and maintain
successful relationships with target customers.
• It also entails to the factors in the market which
impact business, like government policies, and
competition intensity. The market environment
consists of both the macro environment and the
microenvironment.
•
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4. COMPONENTS OF MARKETING
ENVIRONMENT
• Internal environment : Forces and actions inside the
firm that affect the marketing operation composed of
internal stake holders and the other functional areas
within the business organization.
• External environment
• Macro environment
• Micro environment
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5. MICRO ENVIRONMENT
• The factors in the immediate environment .
MACRO ENVIRONMENT
• Broad forces which shape the character of
opportunities and threats.
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6. WHY IS IT IMPORTANT?
• An understanding of macro and micro marketing
environment forces is essential for planning.
• Helps a business to compete more effectively against its
competitors.
• Assists in the identification of opportunities and threats.
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7. THE INTERNAL ENVIRONMENT
All factors that are internal to the organization are
known as the 'internal environment'. They are
generally audited by applying the 'Five Ms' which
are Men, Money, Machinery, Materials and
Markets. The internal environment is as
important for managing change as the external.
As marketers we call the process of managing
internal change 'internal marketing.‘
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8. THE INTERNAL ENVIRONMENT
It includes the following:
•
•
•
•
The human resource department.
The operations department.
The accounting and finance department.
The research and development department.
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9. Micro environment
•
•
•
1.
2.
3.
4.
5.
The forces close to the company that affects its
ability to serve.
It contain all those organizations and individuals
who directly affect the activities of a company.
All factors which impact directly on a firm and its
activities in relation to a particular market.
Suppliers
The market channel
Customers.
Competitors
Public
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10. SUPPLIERS
•Suppliers are either individuals or business houses.
•.They provide resources needed by the company .
•.The developments in the suppliers environment have a
large impact on the marketing operations of the company .
•.Companies can minor their supply costs and increase
product quality to gain competitive advantage in the
market.
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11. Market intermediates
• They are either business houses or
individuals .
• They help the company in promoting, selling
and distributing the goods to customers.
• They are middlemen, distributing agencies,
market service agencies and financial
institutions.
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12. Customers
• The target market of the company is usually of five types:
1.Consumer market i.e. individual and householders
2.Industrial market i.e. organizations buying for producing other
and services.
3.Reseller market i.e. organizations buying goods and services
with a view to sell them to others.
4.Government and other non profit markets.i.e.those buying
goods and services in order to produce public services.
5.International market i.e. individuals and organizations of
nations other then home land who buy for either consumption
or industrial use.
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13. Competitors
• No company stands alone in serving and satisfying
the needs of a customer market. It faces competition.
• This helps the company in facing a mass of
competitors with confidence .
• The company in order to come out successfully has to
adopt means which may help it to outsmart
• Philip Kotler ‘the best way for a company to grasp
the full range of its competition is to take view point
of a buyer.”
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14. Public
• Public is defined as ‘any group that has an actual or
potential interest in or impact on a company’s ability
to achieve it’s objective.
• The actions of the company do affect the interest of
other groups i.e., those who form general public for
the company who must be satisfied along with the
consumers of the company.
• According to Kotler ‘companies must put their
primary energy into effectively managing their
relationships with their customers.
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15. Macro environment
• The macro environment is less controllable.
The macro environment consists of much
larger wide-ranging influences (which impact
the microenvironment) from the broader global
society. Here we would consider culture,
political issues, technology, the natural
environment,
economic
issues
and
demographic factors amongst others.
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16. Factors affecting Macro
environment
1. POLITICAL FORCES
2. ECONOMIC FORCES
3. SOCIAL AND CULTURAL
FORCES
4. NATURAL FORCES
5. TECHNOLOGICAL FORCES
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6. DEMOGRAPHIC FORCESby Venkatesh.N
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17. Political Environmental
• Government actions which
affects
the operations of
a company or business.
These actions may be on local, regional,
national or international level. Business
owners and managers pay close attention to
the
political environment to judge how
government actions will affect their company
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18. Economic environment
• Economic Environment are the economic factors
that have effects on the working of the business. It
includes system, policies and nature of an
economy, trade cycles, economic resources, level
of income, distribution of income and wealth. It is
very dynamic and complex in nature and does not
remain the same.
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19. Social and cultural forces
• Social responsibility has move slowly into the
marketing literature as an alternative to the
market concept.
• Socially responsible marketing is that business
firms should take the lead in eliminating
socially harmful products
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20. DEMOGRAPHIC FORCES
• Demographic
data
helps
in
preparing
geographical marketing plans, household
marketing plans, age and sex wise plans.
• It influences behavior of consumers which in
turn will have direct impact on market place.
• A marketer must communicate with consumers
anticipate problems ,respond to complaints and
make sure that the firm operates properly.
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21. Technological Environment
•
•
•
•
•
Most dramatic force now shaping our destiny.
Changes rapidly.
Creates new markets and opportunities
Challenge is to make practical, affordable products.
Safety regulations result in higher research costs and
longer time between conceptualization and
introduction of product.
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22. Natural Forces
• Involves the natural resources that are needed
as inputs by marketers or that are affected by
marketing activities.
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23. Natural Environment Trends
• Shortage of raw materials.
– Limited quantities of non-renewable resources.
• Increased pollution.
– Waste disposal, air/water pollutants.
• Increased government involvement.
– Kyoto and other initiatives.
• Environmentally sustainable strategies.
– G.R.E.E.N. movement.
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24. Pest Analysis
• A PEST Analysis fits into an overall environmental
scan, which includes Political, Economical, Social,
and Technological environment.
• A scan of the external macro environment in which
the firm operates can be expressed as a pest
analysis.
• The acronym PEST (or sometimes rearranged as
“STEP”) is used to describe a framework for the
analysis of these macro environmental factors.
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25. CONTROLLABILITY
• The organization has no control over the macro
environment. It can only respond to the changes
taking place.
• The organization has some degree of influence over
the micro environment but by no means complete
control.
• The organization controls its own internal
environment although this does not mean the
marketing department or marketing manager has
control.
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26. THANK YOU