The document discusses the various factors that make up the marketing environment for businesses. It identifies the internal/organizational environment and external/macro environment as the two main elements. The internal environment includes corporate culture, staff relationships, resource constraints, and organizational structure. The external micro environment includes suppliers, intermediaries, competitors, customers, and publics. The broader macro environment encompasses political/legal, economic, social/cultural, technological, ecological, and ethical factors that influence businesses. Marketers must understand how these internal and external forces shape customer behavior and impact business operations.

1. Marketing Environment Maxwell Ranasinghe B.Sc. ( Business Administration) Hons. MAAT, Attorney at Law, CPM ( New Haven- USA) MSLIM

2. Marketing Environment All businesses are not alone in the market place. There are many factors that influence businesses These factors are called the “ Marketing Environment”

3. Elements of the Marketing Environment Internal / organisational environment Operational/micro External / Macro

4. Internal environment status Corporate Culture Staff Relationships Resource Constraints Internal Environment Behavior in dealing with the environment

5. Staff Relationships Relationship among the staff affects the operations of the organisation Management should develop a conducive environment to develop staff relationships Employees should not convey a negative image of the organisation to external sources

6. Staff members The message that is conveyed by staff to others ( third parties) have a big impact rather than the paid advertisements of the organisation Members of the public consider staff members as the authoritative and they are far more likely to believe what staff members say Therefore an organization must do its internal marketing well to inform the company’s policies, and obtain the commitment and loyalty of the staff Staff is paid salaries by the organisation and staff should act to safeguard the organisation’s interest for their own benefit too.

7. Organizational Structure An organisation in general will have two structures Formal Structure ( As per the organizational charts who is on the top of the hierarchy, what are the functional departments and who heads them and what they do and how many positions are under them, who is responsible for what and whom is under whom)

8. Informal structure It cannot be shown on an organisational structure formally but there are many informal structures in organisations Friendships, alliances among staff members who go in the bus or train together, who take lunch together, whose wives or family members are friends, who are from the same town or village etc. These relationships are very strong and it could influence for positive and negative aspects in an organisation

9. Corporate culture Culture is a set of shared values, rules, and perceptions in a given society. There are such cultures in organisations too This is called in a company “ the way we do things around here” It has a powerful influence on the actions and behaviors of the members of the staff It is not an easy task to change the organizations culture if it is not conducive for an efficient operation

10. Resource Constraints All organisations operate within a limited amount of resources Men. Material, Money, Machines and Technology are the limiting resources Organisation should use systems where they could get the maximum out of the existing resources The effective and efficient way of adopting resources is the key to success.

11. Micro Environment Micro environment is much closer to the marketer than the macro environment It directly deals with the operational environment It comprises of Suppliers Intermediaries Competitors- Direct and Indirect Customers of a business/marketer Publics

12. Operational/ Micro Environment Micro Environment Intermediaries Competitors Suppliers Customers Publics

13. Suppliers Suppliers are called the “ Supply Chain” They could be the suppliers of all the materials and utilities to the marketer to make its value proposition ( product) to the market – machines and plants, raw materials, components, stationery, electricity, water, gas, other services, advertising agencies, consultancies, etc Company cannot survive without suppliers Marketers should study about the suppliers capacity, problems to have a good flow of supplies

14. Intermediaries Marketing intermediaries- transport and logistics, warehousing, dealers, distributors, wholesale and retail network ( more than 160,000 retail shops for FMCGs) The capacity and the efficiency of the intermediaries are very important for a marketer to serve its customers eg. Walls case They not only distribute but also stock, advertise, provide credit, after sales services, break the bulk, provide information

15. Competitors Marketer is not alone in the market. Every action of the marketer has a reaction from the competitors Knowing the competitors, their capacity, ability, future moves, structure and operational systems, objectives, strategies and tactics, will provide so much of ammunition to the marketer to face the challenges in the market place. Simply a SWOT Analysis of Competitors is needed

16. Michael Porter’s Five Force Model in analyzing competitors

17. Customers Customers are the most important element in the micro environment They can be individuals or organizations A persons who makes the decision to buy the product is called the customer and the person who consumes the product is called the consumer When customer and the consumer are different the marketer have to consider the needs of both Many times customer and the consumer would be the same. Marketer should study the constantly changing needs of the customer and fine tune his value proposition accordingly to satisfy/delight the customer.

18. Publics Publics is any group that has an actual or potential impact on an organisation’s ability to arrive at its objectives Financial Publics- share holders, banks and other finance companies Local Publics- Local groups and individuals Media Publics- newspapers, magazines, radio and TV Government Publics- all govt rules and regulations General Publics- General publics attitude towards companies operations and products

19. Macro (External) Environment External environment is the elements in the periphery of the business. These elements are in the larger picture and the marketer has no control over them These elements are very important and have a tremendous influence on the operations of the marketer Marketer has to take all these factors in to consideration

20. A list of main External Environment factors (PESTEEL) Political Economic Social and cultural Technological Ecological Ethical Legal

21. Political and Legal Environment Ploitical Political stability War and Peace Internal conflicts and struggles Strikes and stoppage of work Globalisation and opening up of markets Political affiliation and support to governments

22. Economic Environment General economic condition of the world and the country Income distribution - Employment levels and its structure Prices and inflation Boom and recession Balance of trade – surplus / deficit Exchange rate and fluctuation Stock market Banking and Credit Import and export duties Saving and investment

23. Social and Cultural Environment Society consists of large group of people with shared customs and laws Culture consists of art, thought, and customs, religions, practices of a society at any given time Any society will have its own culture. May be unique or shared or mixed with other cultures. Peoples relationships and behavior will have a major influence of the societies beliefs, values and norms There could be different cultural groups within a society

24. Some of the socio cultural factors can be listed as follows Demographic factors- population structure- age, family size, ethnicity, income, Social Cultural behaviors- languages, religious beliefs, mythology, gender roles, gift giving habits, Social responsibility and ethics The impact of war Role of women in society Attitudes towards credit Concern about health

25. The socio- cultural affect will influence peoples attitudes towards buying patterns, living patterns, dress codes, fashion, sports, savings, social behaviors, music, credit, marriage, and many areas of life styles. Marketers have to be aware of them to understand the customers and their behavior

26. Technological Technology is changing always Marketers have to be vigilant about it and adapt to change There are so many innovations taking place in the world. Some innovations make products and processors improve dynamically and some times they even replaces the old products and make them obsolete

27. What happened to typewriters, LP records, audio and video cassettes, analogue phones What happened to standard post with email and SMS What will happened to CDs Nano technology is knocking doors Genetic engineering Robots doing dangerous factory processors Development of many raw materials and machines Containerization and shipping

28. Ecological Environment People have considered planet as a bundle of raw materials that could be used to satisfy the needs of the current generation That has made the exploitation of resources without any barriers As a result we have lost lot of resources and the bio diversity Main ecological issues are: Resource Depletion- Pollution Concerns- Health Related Concerns Therefore the marketers have to be very careful of the natural environment in their marketing activities such as production processors, usage, consumption and disposal Marketers should have an environment friendly attitude

29. Ethical Environment Ethics are moral principles that define right or wrong behavior in marketing Laws are promulgated to safeguard most basic ethics However, there are many other ethics that marketers should adhere to although they are not in existence in the form of law Marketers should have their own self regulatory ethical standards if they are to become good corporate citizens of the society

30. Some important ethical issues Product issues : honest claims about effects of products, use non hazadous raw material and component, additives, declare what is used, indicate nutritious values ( specially food items) and side effects ( specially drugs) Pricing issues : price fixing among competitors, predatory pricing ( pricing below cost to win over competitors) hiding or not divulging the operational cost or price of consumables, charging very high prices

31. Promotional issues ; deceptive or misleading advertising, bribery and commissions, unfair advertising, using sex excessively as a strategy in advertising Place issues : blocking distribution channels, extending payment of credit beyond the agreed terms, using underworld elements to obtain orders and block competition

32. Legal Criminal and Civil laws will govern many facets of society Especially marketers have to obey and respect them Commercial laws, Company laws employment laws, health and safety laws, Intellectual Property laws, Environment laws, directly affect the marketers, Consumer Protection Laws, Other Religious and Civil Society conventions, rights groups and practices also affect the operation of businesses.

33. Read more, discuss with your classmates and enhance your knowledge. This is a very important topic in marketing. Contact Maxwell on [email_address] If you need any help I want everybody to pass the exams with flying colours Good Luck