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MARKETING ENVIRONMENT:The Company’s Microenvironment, Customers

<< MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan
MARKETING MACRO ENVIRONMENT:Demographic Environment, Cultural Environment >>
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Principles of Marketing ­ MGT301
VU
Lesson ­ 9
Lesson overview and learning objectives:
In last Lesson we discussed the marketing process. Marketing process consists of four steps:
analyzing market opportunities; developing marketing strategies; planning marketing programs,
which entails choosing the marketing mix (the four Ps of product, price, place, and promotion);
and organizing, implementing, and controlling the marketing effort. This marketing process is
influenced by some environmental factors that can be internal to organization or external to
organization, today we will be covering Marketing Environment:
MARKETING ENVIRONMENT
In order to correctly identify opportunities and monitor threats, the company must begin with a
thorough understanding of the marketing environment in which the firm operates. The marketing
environment consists of all the actors and forces outside marketing that affect the marketing
management's ability to develop and maintain successful relationships with its target customers.
Though these factors and forces may vary depending on the specific company and industrial
group, they can generally be divided into broad micro environmental and macro environmental
components. For most companies, the micro environmental components are: the company,
suppliers, marketing channel firms (intermediaries), customer markets, competitors, and publics
which combine to make up the company's value delivery system. The macro environmental
components are thought to be: demographic, economic, natural, technological, political, and
cultural forces.  The wise marketing manager knows that he or she cannot always affect
environmental forces. However, smart managers can take a proactive, rather than reactive,
approach to the marketing environment.
As marketing management collects and processes data on these environments, they must be ever
vigilant in their efforts to apply what they learn to developing opportunities and dealing with
threats. Studies have shown that excellent companies not only have a keen sense of customer but
an appreciation of the environmental forces swirling around them. By constantly looking at the
dynamic changes that are occurring in the aforementioned environments, companies are better
prepared to adapt to change, prepare long-range strategy, meet the needs of today's and
tomorrow's customers, and compete with the intense competition present in the global
marketplace. All firms are encouraged to adopt an environmental management perspective in the
new millennium.
A company's marketing environment consists of the actors and forces outside marketing that affect
marketing management's ability to develop and maintain successful relationships with its target
customers.
1). Being successful means being able to adapt the marketing mix to trends and changes this
environment.
2). Changes in the marketing environment are often quick and unpredictable.
3). The marketing environment offers both opportunities and threats.
4). The company must use its marketing research and marketing intelligence systems to
monitor the changing environment.
5).  Systematic environmental scanning helps marketers to revise and adapt marketing
strategies to meet new challenges and opportunities in the marketplace.
The marketing environment is made up of a:
1. Micro environmental
2. Macro-environment.
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Principles of Marketing ­ MGT301
VU
1. Micro environmental
The microenvironment consists of five components. The first is the organization's internal
environment--its several departments and management levels--as it affects marketing
management's decision making. The second component includes the marketing channel firms that
cooperate to create value: the suppliers and marketing intermediaries (middlemen, physical
distribution firms, marketing-service agencies, financial intermediaries). The third component
consists of the five types of markets in which the organization can sell: the consumer, producer,
reseller, government, and international markets. The fourth component consists of the competitors
facing the organization. The fifth component consists of all the publics that have an actual or
potential interest in or impact on the organization's ability to achieve its objectives: financial,
media, government, citizen action, and local, general, and internal publics. So the
microenvironment consists of six forces close to the company that affect its ability to serve its
customers:
a. The company itself (including departments).
b. Suppliers.
c. Marketing channel firms (intermediaries).
d. Customer markets.
e. Competitors.
f. Publics.
1. The Company's Microenvironment
As discussed earlier the company's microenvironment consists of six forces that affect its ability to
serve its customers. Lets discuss these forces in detail:
a. The Company
The first force is the company itself and
the role it plays in the microenvironment.
Company
Company
This  could  be  deemed  the  internal
environment.
Supplliiers
Publliics
Supp ers
Pub cs
1). Top management is responsible
Forces Affffecttiing a
Forces A ec ng a
for  setting  the  company's  mission,
Company''s Abiilliitty tto
Company s Ab  y o
objectives, broad strategies, and policies.
Serve
Serve
2). Marketing managers must make
Custtomers
Cus omers
decisions within the parameters established  Competitors
Competitors
IInttermediiariies
n ermed ar es
by top management.
3).  Marketing managers must also
Customers
Customers
work  closely  with  other  company
departments.
Areas such as finance, R & D, purchasing, manufacturing, and accounting all produce
better results when aligned by common objectives and goals.
4). All departments must "think consumer" if the firm is to be successful. The goal is to
provide superior customer value and satisfaction.
b.
Suppliers
Suppliers are firms and individuals that provide the resources needed by the company and its
competitors to produce goods and services. They are an important link in the company's overall
customer "value delivery system."
1). One consideration is to watch supply availability (such as supply shortages).
2). Another point of concern is the monitoring of price trends of key inputs.
Rising supply costs must be carefully monitored.
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Principles of Marketing ­ MGT301
VU
c. Marketing Intermediaries
Marketing intermediaries are firms that help the company to promote, sell, and distribute its goods
to final buyers.
1). Resellers are distribution channel firms that help the company find customers or make
sales to them.
2). These include wholesalers and retailers who buy and resell merchandise.
3).  Resellers often perform important functions more cheaply than the company can
perform itself. However, seeking and working with resellers is not easy because of the power that
some demand and use.
Physical distribution firms help the company to stock and move goods from their points of
origin to their destinations. Examples would be warehouses (that store and protect goods before
they move to the next destination).
Marketing service agencies (such as marketing research firms, advertising agencies, media firms,
etc.) help the company target and promote its products.
Financial intermediaries (such as banks, credit companies, insurance companies, etc.) help
finance transactions and insure against risks.
d.
Customers
The company must study its customer markets closely since each market has its own special
characteristics.
These  markets  normally
include:
1). Consumer markets (individuals and
households that buy goods and services
for
Consumer
personal consumption).
International
Markets
Markets
2). Business markets (buy goods and
services for further processing or for use in
Company
their production process).
Company
3). Reseller markets (buy goods and
Business
Government
Markets
services in order to resell them at a profit).
Markets
4). Government markets (agencies that
Reseller
buy  goods  and  services  in  order  to
Markets
produce public services or transfer them to
those that need them).
5). International markets (buyers of all types in foreign countries).
e.
Competitors
Every company faces a wide range of competitors. A company must secure a strategic advantage
over competitors by positioning their offerings to be successful in the marketplace. No single
competitive strategy is best for all companies.
f.
Publics
A public is any group that has an actual or potential interest in or impact on an
organization's
ability to achieve its objectives. A company should prepare a
marketing plan for all of their
major publics as well as their customer markets. Generally, publics can be identified as being:
1). Financial publics--influence the company's ability to obtain funds.
2). Media publics--carry news, features, and editorial opinion.
3). Government publics--take developments into account.
4).  Citizen-action publics--a company's decisions are often questioned by consumer
organizations.
5). Local publics--includes neighborhood residents and community organizations.
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Principles of Marketing ­ MGT301
VU
6). General publics--a company must be concerned about the general public's attitude
toward its products and services.
7). Internal publics--workers, managers, volunteers, and the board of directors.
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Table of Contents:
  1. PRINCIPLES OF MARKETING:Introduction of Marketing, How is Marketing Done?
  2. ROAD MAP:UNDERSTANDING MARKETING AND MARKETING PROCESS
  3. MARKETING FUNCTIONS:CUSTOMER RELATIONSHIP MANAGEMENT
  4. MARKETING IN HISTORICAL PERSPECTIVE AND EVOLUTION OF MARKETING:End of the Mass Market
  5. MARKETING CHALLENGES IN THE 21st CENTURY:Connections with Customers
  6. STRATEGIC PLANNING AND MARKETING PROCESS:Setting Company Objectives and Goals
  7. PORTFOLIO ANALYSIS:MARKETING PROCESS,Marketing Strategy Planning Process
  8. MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan
  9. MARKETING ENVIRONMENT:The Company’s Microenvironment, Customers
  10. MARKETING MACRO ENVIRONMENT:Demographic Environment, Cultural Environment
  11. ANALYZING MARKETING OPPORTUNITIES AND DEVELOPING STRATEGIES:MIS, Marketing Research
  12. THE MARKETING RESEARCH PROCESS:Developing the Research Plan, Research Approaches
  13. THE MARKETING RESEARCH PROCESS (Continued):CONSUMER MARKET
  14. CONSUMER BUYING BEHAVIOR:Model of consumer behavior, Cultural Factors
  15. CONSUMER BUYING BEHAVIOR (CONTINUED):Personal Factors, Psychological Factors
  16. BUSINESS MARKETS AND BUYING BEHAVIOR:Market structure and demand
  17. MARKET SEGMENTATION:Steps in Target Marketing, Mass Marketing
  18. MARKET SEGMENTATION (CONTINUED):Market Targeting, How Many Differences to Promote
  19. Product:Marketing Mix, Levels of Product and Services, Consumer Products
  20. PRODUCT:Individual product decisions, Product Attributes, Branding
  21. PRODUCT:NEW PRODUCT DEVELOPMENT PROCESS, Idea generation, Test Marketing
  22. NEW PRODUCT DEVELOPMENT:PRODUCT LIFE- CYCLE STAGES AND STRATEGIES
  23. KEY TERMS:New-product development, Idea generation, Product development
  24. Price the 2nd P of Marketing Mix:Marketing Objectives, Costs, The Market and Demand
  25. PRICE THE 2ND P OF MARKETING MIX:General Pricing Approaches, Fixed Cost
  26. PRICE THE 2ND P OF MARKETING MIX:Discount and Allowance Pricing, Segmented Pricing
  27. PRICE THE 2ND P OF MARKETING MIX:Price Changes, Initiating Price Increases
  28. PLACE- THE 3RD P OF MARKETING MIX:Marketing Channel, Channel Behavior
  29. LOGISTIC MANAGEMENT:Push Versus Pull Strategy, Goals of the Logistics System
  30. RETAILING AND WHOLESALING:Customer Service, Product Line, Discount Stores
  31. KEY TERMS:Distribution channel, Franchise organization, Distribution center
  32. PROMOTION THE 4TH P OF MARKETING MIX:Integrated Marketing Communications
  33. ADVERTISING:The Five M’s of Advertising, Advertising decisions
  34. ADVERTISING:SALES PROMOTION, Evaluating Advertising, Sales Promotion
  35. PERSONAL SELLING:The Role of the Sales Force, Builds Relationships
  36. SALES FORCE MANAGEMENT:Managing the Sales Force, Compensating Salespeople
  37. SALES FORCE MANAGEMENT:DIRECT MARKETING, Forms of Direct Marketing
  38. DIRECT MARKETING:PUBLIC RELATIONS, Major Public Relations Decisions
  39. KEY TERMS:Public relations, Advertising, Catalog Marketing
  40. CREATING COMPETITIVE ADVANTAGE:Competitor Analysis, Competitive Strategies
  41. GLOBAL MARKETING:International Trade System, Economic Environment
  42. E-MARKETING:Internet Marketing, Electronic Commerce, Basic-Forms
  43. MARKETING AND SOCIETY:Social Criticisms of Marketing, Marketing Ethics
  44. MARKETING:BCG MATRIX, CONSUMER BEHAVIOR, PRODUCT AND SERVICES
  45. A NEW PRODUCT DEVELOPMENT:PRICING STRATEGIES, GLOBAL MARKET PLACE