This document discusses environmental factors that influence marketing. It defines the micro-environment as forces close to a company that can be influenced, including companies, suppliers, customers and competitors. The macro-environment is broader societal forces like demographics, economy, technology and culture that are difficult to control. Reactive strategies respond to environmental changes, while proactive strategies initiate changes. Understanding both micro and macro environmental factors is important for marketing success.

1. SEMINAR 02
The Influence of
Environmental factors

2. OBJECTIVES
 To know the meaning of marketing environments
 To know the types of marketing environments
 To know the micro-environment forces
 To know the macro-environment forces
 To know the strategies to deal with the marketing
environments

3. The Marketing Environment
 The environment of marketing refers to all forces
and factors that influence the success or failure of
any marketing activities of companies.
 The environment of marketing is made up of two
types of environment forces:
 Micro-environment
 Macro-environment

4. Micro-environment
 Refers to the smaller environmental forces that are
closest to a company and which can positively or
negatively impact on company marketing ability to
achieve its objectives in a chosen market.
 It is possible for a company to control or to influence
the micro-environmental forces surrounding it.
 It is also called as controllable forces which is under
the power of company to manipulate, to change or
to utilize.

5. Micro environmental Forces
1. The company
2. Suppliers
3. Marketing Channels
4. Market
5. Competitors
6. Community

6. Micro environmental Forces
The company
 within a company are the various departments and
employees. Each of them must carry out the
assigned duties and responsibilities so that the
company can achieve its objectives in the market.
 Top management
 Finance department
 Research & Development department
 Purchasing department
 Production department
 Accounting Department

7. Micro environmental Forces
Suppliers
 they provide the materials and machinery so that a
company can carry out its business operations.
 It is important for the company to choose the right
supplier to do business with.
 Suppliers will provide suggestions on new materials
available in the market and what is the latest
changes in the market.

8. Micro environmental Forces
Marketing Channels
 they help the company to promote, sell and
distribute its goods to the final buyers
 Among the marketing intermediaries available to a
company are resellers, physical distribution firms,
marketing service agencies and financial
intermediaries

9. Micro environmental Forces
Market
 A company can sell its products to any of the following markets:
 Consumer markets
 they buy goods for personal consumption
 Business markets
 they buy goods to be used to make other goods or to help with the production
processes
 Reseller markets
 they buys goods to be resold for a profit
 Government markets
 they buy goods to be used to provide benefits to the society
 International markets
 they are located in a foreign country and comprises all the above markets

10. Micro environmental Forces
Competitors
 No company can allow itself to become complacent in a market. It
has all types of competitors to contend with. They are:
 Direct competitors
 sell the same products as a company and the products meet a similar
need as company’s product
 Indirect competitors
 refers to competitor companies who offer products which are different
from a company’s product but they meet a similar need
 General competitors
 these are any kind of companies who chase after the same disposable
income of consumers

11. Micro environmental Forces
Community
 this refers to any group that has an actual or potential interest in
or impact on an organization's ability to achieve its objectives
 6 Types of publics:
1. Financial publics
 entities which have the ability to extend loans or other financial
services to a company
2. Government publics
 these are governments or government agencies who institute rules
and regulations and enforce them

12. Micro environmental Forces
3. Citizen
 action publics-refer to entities such as environmental groups, consumer
associations and minority groups. Need for a company to have a PR
department to deal with them
4. Local publics
 refers to the local community where a company’s office or factory is
located. Need for a community officer who has ongoing dealings with the
community with regards to issues or concerns raised by them
5. General publics
 need for a company to monitor the general public’s attitude towards it
product or even the company. Need for PR department to monitor them
6. Internal publics
 refers to the company’s own employees. Need for a company to use the
intranet, e-mail or even newsletter to maintain communication with and
at the same time to boost their morale

13. Macro-environment
 Refers to the larger societal forces that surround a
company and which have the ability to positively or
negatively impact on a company’s ability to achieve its
objectives in a given market forces.
 It is quite difficult for a company to control or influence
the macro-environmental forces surrounding it.
 It is also called as uncontrollable forces which is beyond
the power of company to manipulate, to change or to
utilize. Most of the time, this environment will manipulate,
control and utilize the company’s ability to success.
 The best way for the company to deal with these
environment is by following and adapting itself to suit the
requirements of the environment.

14. Macro environmental Forces
1. Demographic environment
2. Economy environment
3. Natural environment
4. Technological environment
5. Political Environment
6. Cultural environment

15. Macro environmental Forces
Demographic environment
 it refers to the study of human population in terms
of size, density, location, age, gender, race,
occupation and other statistics
 Changing age structure of Malaysians
 Changing Malaysian family
 Geographic shifts in population
 A better-educated and more white-collar population
 Increasing diversity

16. Macro environmental Forces
 Changing age structure of Malaysians
 Malaysians are living longer so it presents opportunities
for companies to go into manufacturing of vitamin pills,
walking sticks, wheelchairs, clothing and adult diapers
 Can we easily change this or just admit it?
 Changing Malaysian family
 Divorce rate is going up among all races. Many
households with one parent and children. If a father
lives alone with his children, what kind of food do they
eat? What type of kitchen appliances will be found in
such homes?
 Can we easily change this or just admit it?

17. Macro environmental Forces
 Geographic shifts in population
 when people in western countries get older , they tend to move to
the warmer climates. For a retiree living in New York, moving to
California can be a welcome change. This can present
opportunities for companies to make products for older people
and target them at the older people staying in warm climates.
 Can we easily change this or just admit it?
 A better-educated and more white-collar population
 in the 1970’s and before it was quite difficult to find people with
good educational backgrounds and well-paying professional jobs.
So those days people found joy in simple pleasures. Today
because of the higher level of education, people have more
sophisticated pleasures which presents opportunities for
restaurants, pubs, travel agencies and newspaper or magazine
publishers.
 Can we easily change this or just admit it?

18. Macro environmental Forces
 Increasing diversity
 There was a time when you found three races in
Malaysia i.e. Malays, Chinese and Indians. Today
there are migrants from Indonesia, Bangladesh,
Vietnam, Myanmar, Nepal and many African
countries in the country.
 This presents opportunities for companies dealing
in clothing, courier services, banking, food and
entertainment services.
 Can we easily change this or just admit it?

19. Macro environmental Forces
The economy:
 Companies have to be aware of the changes
occurring in the economics environment.
 A country can face any of the following 4 types of
economy:
1. Boom conditions
2. Recession
3. Depression
4. Recovery

20. Macro environmental Forces
1. Boom conditions
 healthy economy, people are working and have good
disposable income and usually have strong desire for luxury
goods
 Can we easily change this or just admit it?
2. Recession
 a country’s economy slows down, people work for less pay,
some even lose their jobs and are very careful with their
spending. Luxury goods purchases are a distant memory.
 Can we easily change this or just admit it?

21. Macro environmental Forces
3. Depression
 the economy of a country has collapsed. The
currency has lost its value. People have no jobs.
They can barely afford the necessities.
 Can we easily change this or just admit it?
4. Recovery
 the economy slowly wakes up. Although people
are earning higher pay and better benefits but they
are careful in their spending
 Can we easily change this or just admit it?

22. Macro environmental Forces
Natural environment:
 Refers to the natural resources which are needed as inputs by
marketers or that are affected by marketing activities
 Shortage of raw materials
 resources like water, electricity are in short supply in different parts of
the world.
 Increased pollution
 companies can contribute air, water and noise pollution.
 Increased government intervention
 Developed countries like Japan and Germany place heavy emphasis
on protecting the environment.
 Poorer countries like Nepal and Bangladesh do not have the resources
to give such attention to the environment

23. Macro environmental Forces
Technological environment:
 Technology has given us the PC, antibiotics, the Internet and organ
transplants.
 Sources of new technology:
 Inventors
 National governments
 Universities
 Medical research institutions
 Hospitals
 A company which adopts the latest technology has the ability to lower
its production costs and at the same time come out with innovative
products with suitable designs and features

24. Macro environmental Forces
Legal and Political Environment:
 In Malaysia, laws are tabled firstly as Bill in the Parliament and if it receives
a two-third majority vote, sent to the King and if and when he signs it
becomes the law.
 Our country has laws for the different industries:
 Restaurants need to apply for special permits to remain open 24 hours.
 Can we change this or just admit it?
 Manufacturers of essential goods like eggs, rice and sugar need to adhere
to the prices set by the government.
 Can we change this or just admit it?
 Manufacturers have to be truthful in their advertising. They are also not
allowed to carry out comparative advertising for their products.
 Can we change this or just admit it?

25. Macro environmental Forces
Cultural environment
 It is made up of the institutions and other forces (religion, language,
customs) that affect a society’s beliefs, basic values, perceptions,
preferences and behaviors. These might influence the success and failure
of business and marketing activities.
 Religion
 Islam, Christian, Buddhist, Hindu, Animism
 Can we change this or just admit it?
 Language
 Malay, Mandarin, Cantonese, Hakka, Hokkien, Tamil, Urdhu, English etc
 Can we change this or just admit it?
 Customs
 Malay, Chinese, Indian
 Can we change this or just admit it?

26. Macro environmental Forces
 Beliefs and macro-environment forces
 All of the forces of macro-environment will shape the beliefs and
thinking of human and customers.
 The beliefs will give perception of human towards the products
and services provided by the company and business.
 If the believe towards a product is positive, the customers will
take the positive action ahead to buy and consume the product
and vice versa.
 Types of beliefs:
 Core beliefs
 Secondary beliefs

27. Macro environmental Forces
Types of beliefs:
 Core beliefs
 passed on from parents to children and are reinforced by
schools, churches, business and government. This beliefs is
stronger since it being socialize with customers for long time.
 Secondary beliefs
 It is just a perception of human towards something and most of
the time it is come from the wants of human. It is more open to
change.
 **secondary beliefs can be changed by marketers
but it is almost impossible for marketers to change
the core beliefs**

28. Macro environmental Forces
 Shifts in secondary cultural values:
 People’s view of themselves
 People’s view of others
 People’s view of organizations
 People’s view of society
 People’s view of nature
 People’s view of the universe

29. Macro environmental Forces
 People’s view of themselves
 1980’s new Yorkers wanted to advance
themselves, make as much money as possible.
So they were into luxury goods, driving fancy car
etc.
 Can we change this or just admit it?
 People’s view of others
 1980’s Americans wanted to advance their own
careers, enjoy life to the fullest. Today, they look
at how they can help their fellow men.
 Can we change this or just admit it?

30. Macro environmental Forces
 People’s view of organizations
 most Americans do not trust big companies and
prefer to work for small companies
 Can we change this or just admit it?
 People’s view of society
 people in the U.S. became more patriotic after
September 11th, 200. Flag sales went up as a
result.
 Can we change this or just admit it?

31. Macro environmental Forces
 People’s view of nature
 more Malaysians as a result of education and
higher economic position appreciate nature more
today.
 Can we change this or just admit it?
 People’s view of the universe
 some of the young Malaysians are less religious
than their parents. As a result , they look for other
ways to find meaning to their lives.
 Can we change this or just admit it?

32. Strategies for Dealing with the Environment
Reactive strategy
Proactive strategy

33. Strategies for Dealing with the Environment
 Reactive strategy
 a company looks at the developments in the environment first and
then decides what actions to take.
 For example, a fashion house , if it sees one of it rivals come out
with a new fashion, will do nothing and instead look at how the new
fashion is doing in terms of sales and profits.
 If the new fashion does well, the company may then decide to come
out with their version of the new fashion.
 Proactive strategy
 a company does not look to others but decides to initiates changes
in the environment.
 The fashion house, in this case will decide to introduce a new
fashion without giving any thought to what other companies are up
to.

34. Strategies for Dealing with the Environment
 Which of the above strategies is more risky?
 Which of these two strategies has the potential
to make more money for a company

35. CONCLUSION
 There are two types of marketing environments namely
microenvironment (we can control and against) and macro-
environment (we cannot control but must follow).
 There are six major micro-environment forces (the company
itself, the suppliers, the marketing intermediaries, the customers,
the competitors as well as the publics).
 There are six major macro-environment forces (demographics,
economy, natural, technology, political and cultural).
 There are two strategies available to marketers in dealing with
the marketing environments (reactive strategy and proactive
strategy).

36. TUTORIALS
1. How is microenvironment different from macro
environment?
2. List and explain all forces of micro-environment.
3. List and explain all forces of macro-environment.
4. Explain the impacts of the microenvironment
elements on the success of a company.
5. Explain the impacts of the macro environment
elements on the success of a company.

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