The document discusses the marketing environment that organizations operate within. It distinguishes between the internal environment, which is controllable by the organization, and the external uncontrollable environment. The internal environment includes factors like the company, suppliers, competitors, customers, and public. The external macroenvironment includes demographic, economic, natural, technological, legal, and cultural factors. Organizations must understand how these internal and external environmental factors will affect marketing efforts and strategize to either reactively adapt or proactively manage their marketing environment.

1. MGT 2306
MARKETING MANAGEMENT
Lesson 4

2. LESSON 4 OBJECTIVES
• Examine the marketing environment by which all
organizations operate within
• Distinguish between Internal and External
environmental factors that will affect an
organization’s marketing efforts

3. WHAT’S A MARKETING
ENVIRONMENT?
• Actors and forces
that affect a firm’s
ability to build and
maintain successful
relationships with
customers.

4. External Environment
What the Firm Might Do
Internal Environment
What the Firm Can Do
Sustainable
Competitive
Advantage
The 2 MARKET ENVIRONMENTS
AN ORGANIZATION FACES

5. THE MICROENVIRONMENT
company suppliers
Consumers
competitors
Public
Micro
Marketing
Intermediaries
The micro environment refers to the business itself and
to all the challenges that come from inside the business.
There are altogether 6 factors involved.

6. COMPANY
• The company’s vision, mission, objectives are all
aligned, made known to everyone in the
organization and receives everyone’s commitment
(Iltizam).

7. SUPPLIERS
• An organization is dependent on its suppliers
for the quantity, quality, timing and information
in order to be able to serve its customers

8. COMPETITORS
• A firm needs to monitor within its own industry
market leaders, challengers, followers and nichers
to always know its standing in the market and its
customers.

9. PUBLIC
• Firms have to be profitable but also socially
responsible to its stakeholders, the community,
special interest groups and the government

10. DISTRIBUTION CHANNEL (ALSO
KNOWN AS MARKETING
INTERMEDIARIES)
• Firms rely on intermediaries for distribution
coverage, speed, efficiency and special services in
distributing the company’s products to where
customers will buy them

11. CONSUMERS
• Understanding the behavior of end-users and
organizational users and continue to develop
products that will satisfy them

12. THE MACROENVIRONMENT
Company
Cultural
Economic
Demography
Natural
Technology
Legal
The major external
and uncontrollable
factors that
influence an
organization's
decision making,
and affect its
performance and
strategies.

13. DEMOGRAPHY
• Lots to do with world population data:
- size : Population quantity & growth rate
- density : Where most people stay
- location : specific places where people converge
- age : Work, income & spending
- gender : More males/females in occupation
- race : cultural diversity & influences on
purchasing

14. ECONOMY
• A country’s economy affects consumer
purchasing power, spending patterns and what
to spend on with greater emphasis on value

15. NATURAL
• Concerns on natural resources, increased
pollution and usage of pesticides

16. TECHNOLOGICAL
• Rapid pace of advancement, new opportunities
but rapid obsoletes, R&D costs

17. LEGAL
• Increased legislations to protect businesses as
well as consumers, changes in governmental
agency enforcement, increased emphasis on
ethical behavior and social responsibility

18. CULTURAL
• Composed of institutions and other forces that
affect a society’s basic values, perceptions and
behaviors

19. RESPONDING TO THE MARKETING
ENVIRONMENT
Reactive : Passive acceptance and adaptation
- Companies design strategies that
avoid threats and capitalize upon
opportunities.
Proactive : Environmental management
- Use of lobbyists, Public relations,
advertorials, lawsuits, complaints
and contractual agreements to
influence environmental forces.