The Marketing Environment

MARK 1266
Principles of Marketing in a
Global Context
The Marketing
Environment
Dr. Tharaka Wijesundara

Learning Objectives
• To describe the environmental forces that affect the company’s
ability to serve its customers.
• To explain how changes in the demographic and economic
environments affect marketing decisions.
• To identify the major trends in the firm’s natural and technological
environments.
• To explain the key changes in the political and cultural environments.
• To discuss how companies can react to the marketing environment.
Marketing Environment
The marketing environment includes the actors

and forces outside marketing that affect marketing
management’s ability to build and maintain
successful relationships with target customers.
Microenvironment and Macroenvironment
Microenvironment consists of the actors close to the

company that affect its ability to serve its customers—
the company, suppliers, marketing intermediaries,
customer markets, competitors, and publics.
Macroenvironment consists of the larger societal

forces affecting the microenvironment—demographic,
economic, natural, technological, political, and cultural.
Actors in the Microenvironment
5 5
The Microenvironment
The Company
In designing marketing plans, marketing management
takes other company groups into account.
• Top management
• Finance
• Research and development (R&D)
• Information technology
• Purchasing
• Operations
• Human resources
• Accounting
Suppliers -Provide the resources to produce goods and services
• L’Oréal builds long-term supplier

relationships based on mutual
benefit and growth. It “wants to
make L’Oréal a top performer
and one of the world’s most
respected companies. Being
respected also means being
respected by our suppliers.”
7 7
Marketing intermediaries help the company promote, finance, sell, and distribute
its goods to final buyers.
• Partnering with
intermediaries: Coca-Cola
provides its retail partners
with much more than just soft
drinks. It also pledges
powerful marketing support.
8 8
Marketing Intermediaries
• Resellers
• Physical distribution firms
• Marketing services agencies
• Financial intermediaries
Competitors
Firms must gain strategic advantage by positioning
their offerings strongly against competitors’ offerings
in consumers’ minds.
Publics
Any group that has an actual or potential interest in or impact on an
organization’s ability to achieve its objectives
• Financial publics
• Media publics
• Government publics
• Citizen-action publics
• Local publics
• General public
• Internal publics
11 11
Customers
• Consumer markets
• Business markets
• Reseller markets
• Government markets
• International markets
12 12
The Macroenvironment
Major Forces in the Company’s Macroenvironment
The Demographic Environment

• Demography is the study of human populations—size, density,
location, age, gender, race, occupation, and other characteristics.
• Demographic environment involves people, and people make up
markets.
• Demographic trends include changing age and family structures,
geographic population shifts, educational characteristics, and
diversity.
The Demographic Environments

• Baby Boomers – born between 1946 and 1964
• Generation X – born between 1965 and 1980
• Millennials – born between 1981 and 1996
• Generation Z – born between 1997 and 2012
• Generation Alpha – born after 2012
Generational marketing is important in segmenting people by

lifestyle or life stage instead of age.
Marketing to Boomers: The

Nike CruzrOne sneaker
naturally appeals to older
baby boomers but focuses on
lifestyle and pace rather than
age.
• The changing family structures

• Geographic shifts in population
• A better-educated, more white-collar, more professional
population
• Increasing diversity
• Working remotely- Zoom, Teams
Economic Environments
The economic environment consists of economic factors that
affect consumer purchasing power and spending patterns.
• Great Recession of 2008 to 2009 and the COVID-19 pandemic

The Natural
Environment
•The natural environment is the physical
environment and the natural resources
needed as inputs by marketers or
affected by marketing activities.
•Environmental sustainability-
Developing strategies and practices that
create a world economy that the planet
can support indefinitely.
Nike has tried to advocate sustainability through its own

practices and its impact on its value chain
The Natural Environment
Trends in the Natural Environment

• Growing shortages of raw materials
• Increased pollution
• Increased government intervention
• Developing strategies that support environmental
sustainability
Technological
Environment
Forces that create new technologies, leading to new product and
market opportunities.
Disney takes full advantage of digital technology in creating magical

customer experiences at its Walt Disney World Resort. Using the My
Disney Experience app and cloud-based MyMagic+ services, guests
plan their trips and then manage their visits in real time while at the
resort
The Political Environment
Laws, government agencies, and pressure groups that influence

and limit various organizations and individuals in a given society.
Legislation regulating business is intended to protect

• companies from each other
• consumers from unfair business practices
• the interests of society against unrestrained business
behaviour
Cultural Environment
The cultural environment consists of institutions and

other forces that affect a society’s basic values,
perceptions, and behaviours.
Cultural Environment
Core beliefs and values are persistent and are passed on from parents
to children and are reinforced by schools, churches, businesses, and
government.
Secondary beliefs and values are more open to change.
Responding to the Marketing
Environment
Views on Responding
• Uncontrollable
• React and adapt to forces in the environment
• Proactive
• Take aggressive actions to affect forces in the
environment
• Reactive
• Watch and react to forces in the environment
Reading
Chaprer-3

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MARK 1266

Dr. Tharaka Wijesundara

The marketing environment includes the actors

Microenvironment consists of the actors close to the

Macroenvironment consists of the larger societal

• L’Oréal builds long-term supplier

The Demographic Environment

The Demographic Environment

Generational marketing is important in segmenting people by

Marketing to Boomers: The

• The changing family structures

• Great Recession of 2008 to 2009 and the COVID-19 pandemic

Nike has tried to advocate sustainability through its own

Trends in the Natural Environment

Disney takes full advantage of digital technology in creating magical

Laws, government agencies, and pressure groups that influence

Legislation regulating business is intended to protect

The cultural environment consists of institutions and

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