The document discusses the marketing environment and its levels. It describes the internal environment as factors within an organization, and the external environment as outside factors divided into micro and macro levels. The micro environment includes customers, competitors and partners. The macro environment consists of larger societal forces like political, economic, social and technological (PEST) factors that can impact organizations. PEST analysis examines how these macro environmental factors affect businesses.

1. Principles of Marketing
Lecture # 4
Marketing Environment

2. Marketing Environment
 Marketing environment has been defined as:"the
totality of physical and social factors that are taken
directly into consideration in the decision-making
behavior of individuals in the organization.“
The business environment is a Marketing term and
refers to factors and forces that affect a firm's ability to
build and maintain successful customer relationships

3. Levels or types of Marketing
environment
There are two basic levels of the environment:
• Internal environment
• External environment

5. Marketing Environment

6. Marketing Environment
Micro and Macro Environment

7. Levels or types of Marketing
environment
• Internal environment – the internal elements
of the organization used to create,
communicate and deliver market offerings.
• Micro environment – small forces external the
company that affect its ability to serve its
customers.
• Macro environment – larger societal forces
that affect the survival of the organization.

8. Internal Environment
• The internal environment "consists of those relevant
physical and social factors within the boundaries of the
organization or specific decision unit that are taken
directly into consideration in the decision-making
behavior of individuals in that system".
• This includes all departments such as management,
finance, research and development, purchasing,
Business operations and accounting.
• Each of these departments influences marketing
decisions.

9. Internal Environment
• For example,
– Research and development have input as to the
features a product can perform.
– Accounting approves the financial side of marketing
plans and budget in customer dissatisfaction.
– Marketing managers must watch supply availability
and other trends dealing with suppliers to ensure that
product will be delivered to customers in the time
frame required in order to maintain a strong customer
relationship.

10. External Environment
• The external environment "consists of those
relevant physical and social factors outside the
boundaries of the organization or specific
decision unit that are taken directly into
consideration.“
• The external environment can be further
broken into micro and macro environments.

11. Micro-environment
• The micro-environment consists of
customers, partners, and
competitors.
• The most important aspect of micro-
environment is the customer
market.

12. Micro-environment
• There are different types of customer markets,
which includes:
– consumer markets,
– business markets,
– government markets,
– Globalization international markets, and
– reseller markets.

13. Micro-environment
• Consumer Market:
The consumer market is made up of individuals who buy
goods and services for their own personal use or use in
their household.
• Business Market:
– Business markets include those who buy goods and
services for use in producing their own products to sell.
– This is different from the reseller market which includes
businesses that purchase goods to resell for earning
profit.
– These are the same companies mentioned as market
intermediaries.

14. Micro-environment
• Government Market:
– The government market consists of government
agencies that buy goods to produce public
services or
– transfer goods to others who need them.
• International market:
• International markets include buyers in other countries

15. Macro-environment
• The macro-environment refers to all forces that are
part of the larger society and affect the micro-
environment.
• It includes concepts such as demography, economy,
natural forces, technology, politics, and culture.
• The purpose of analyzing the macro marketing
environment is to understand the environment better
and to adapt to the social environment and change
through the marketing effort of the enterprise to
achieve the goal of the enterprise marketing.

16. • Factors affecting organization in Macro
environment are known as PEST, that is:
–Political,
–Economical,
–Social and
– Technological

17. PEST Analysis
• The Four environmental factors of the PEST
analysis are the following:
– Political Factors
– Economical Factors
– Social Factors
– Technological Factors

18. Political Factors
• The company/organization needs to consider the
political environment when creating business
strategies.
• The entire political environment includes looking
at government policies and the risk and instability
of current political factors.
• Political risks can include an unexpected loss of
ownership due to government takeover
(nationalization), or changes in labor laws which
might increase the cost of the
company's workforce.

19. Political Factors
• However often business can anticipate issues
by performing a political risk analysis.
• The political instability can influence the
business and the duration of time that
business/ organization is profitable.

20. Political Factors
• Taxation Policy
• Trade regulations
• governmental stability
• unemployment Policy
• Political stability

21. Economic Factors
• The economic factors of the business
environment are all the variables that impact
how the consumer spends their money and
the power of that purchase

22. Economic Factors
• Interest rate
• Inflation rate
• Earning power
• Growth in spending power
• Rate of people in a pensionable age

23. Social Factors
(Socio-cultural)
• The socio-cultural environment looks at
the demographic characteristics of the current
business environment.
• It looks at the values, customs and norms of
the environment of which a company or
organization is placed

24. Social Factors
(Socio-cultural)
• Values, beliefs
• Language
• Religion
• Education
• Literacy

25. Technological factors
• The technological environment is becoming a
lot more important in the modern day
business environment.
• New technology produces new opportunities
for companies and organizations to create, sell
and promote a product.
• Technology is rapidly growing and forever
changing.

26. Technological factors
• Internet
• E-commerce
• Social Media
• Electronic Media
• Research and Development

27. Any Question???

28. Questions
• What is Marketing environment?
• What are the types of Marketing environment?
• Define and explain Internal Environment.
• Define and explain External Environment.
• What is Micro and Macro Environment?
• What is Macro Environment?
• Explain the factors of Macro environment in
detail.
• Define and explain PEST analysis in detail.