Download MKTA221 “Marketing Management”

BAA 120
3. The Marketing Environment
Environmental scanning is the process of acquiring (getting)
information on events outside the organization to identify and interpret
(‫ ) فسر‬potential trends (‫)االتجاهات‬.
Trends are the ways in which the world is changing; and
they can be sources of opportunities and threats for a
company.
Activity 1
Trend: Price of Petrol has decreased around
the world.
What are the outcomes for Bahrain?
Identifying and understanding the trends is essential (important) for
successful environmental scanning, which makes up the marketing
environment.
The scanning should be accomplished on the marketing environment that is
made up of micro-environment and macro-environment.
Marketing Environment: The actors and forces outside marketing that affect
marketing management’s ability to build and maintain (keep) successful
relationships with target customersi.
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Marketing Environment
MICROENVIRONMENT
MACROENVIRONMENT
The actors close to the company that affect its
ability to serve its customers
The larger societal forces that affect the
microenvironment
1. Companies
1. Demographic
2. Suppliers
2. Economic
3. Marketing Intermediaries
3. Natural
4. Customer Markets
4. Technological
5. Competitors
5. Political
6. Publics
6. Cultural
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Microenvironment
 Microenvironment
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1. THE COMPANY:
The internal environment of a company that includes all the
departments that have impacts on (effects) the marketing
department’s plans and actions.
For example:

Top Management: They have the final decisions.

Finance: They allocate (‫ )تخصيص‬the marketing
budget.

Research and Development: They develop
products.

Purchasing: They identify the best supplier’s
marketers need.

Operations: They put plans into actions.
All departments should work together to provide the best customer
value and satisfaction.
2. SUPPLIERS (‫)الموردين‬:
They provide the resources needed by the company to provide
products to customers. Some problems that can be caused by the
suppliers are:
1) An increasing of the supply cost
2) Supply shortage or delay (‫)نقص أو تأخير‬
3. MARKETING INTERMEDIARIES:
Firms that help the company to promote, sell, and distribute (‫ )وزع‬its
goods to the final buyers. They include:
a) Physical distribution firms: help the
company to stock (store) and move
(ship) goods from their points of origin to
their destinations.
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b) Marketing services agencies: are the marketing research firms,
advertising agencies, media firms, and marketing consulting firms
that help the company target and promote its products to the right
market.
c) Financial intermediaries: includes banks,
credit companies, insurance companies, and
other firms that help buying and selling
goods. These firms frequently have enough
power to dictate terms or even shut the
manufacturer out of large markets.
4. CUSTOMERS: the company needs to study four types of customer
markets closely.
1) Consumer markets: individuals
and households that buy goods
and services for personal
consumption.
2) Business markets: buy goods
and services for further processing or for use in their production
process.
3) Government markets: government agencies that buy goods
and services to produce public service.
4) International markets: buyers in other countries, including all
the above markets.
5. COMPETITORS: Are one of the main actors that affect marketing
plans as to be successful, a company must provide greater customer
value and satisfaction than competitors do.
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6. PUBLICS: includes any group that has an actual or potential interest
in, or impact on, an organization’s ability to achieve its objectives.
Such as:
-
Financials, media, government, local public
Macroenvironment
 Macro-environment:
1. DEMOGRAPHIC ENVIRONMENT:
Demography: the study of human populations in terms of size, density,
location, age, gender, race, occupation, and other statistics.
The demographic environment is of major interest to marketers because
it involves people, and people make up markets. Changes in the
demographic environment have major impact on marketing. Some of
these changes can be:
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The Changing age structure:
a)
These facts are important to know the needs of each group and how
each group can be attracted.
b)
The changing Family structure: Some of these changes are:
o Percentage of married couples with children (traditional
household) is falling.
o More people are divorcing,
o More people are choosing not to marry, or marry later, or marry
without intending to have children.
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Marketers must increasingly consider the special needs of these
changes.
c)
Geographic shifts in populations: in some countries people are
moving from one area to another, for example: Diyar Al Muharraq.
d)
Increased education: increased college attendance, and white-collar
workers. The rising number of educated people will increase the
demand for quality products, books, travel, computers, and internet.
e)
Increased diversity: increasing population diversity makes marketers
face increasingly diverse markets. Most large businesses and banks
now target specially designed products, ads, and promotions to one or
more of these groups.
(Source: 1 Diversity – UAE Statistics https://chronicle.fanack.com/)
( Source: 2 Diversity - England Statistics 2011-http://www.bedford.gov.uk/)
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2. ECONOMIC ENVIRONMENT:
Economic environment: Factors that affect consumer buying power
and spending pattern in a country.
 Changes in Income: Consumption choices change due to the amount
of money available for an individual to spend.
o Value marketing: offering the right combination of product quality
and good service at a fair price.

Changing Consumer Spending Patterns: food,
housing, and transportation use up the most
household income. However, consumers at different
income levels have different spending patterns. And
Think!
Does the removing
of subsidies in
Bahrain change
our consumer
spending patterns?
there spending pattern changes once their income level
change too.
3.
NATURAL ENVIRONMENT:
Natural resources that are needed as inputs by marketers or that are
affected by marketing activities.
Marketers should be aware of several trends in the natural environment.


Shortage of raw materials: oil, coal, and other nonrenewable
minerals.
The increased government intervention in natural resources
management to pursue environmental quality.
4. TECHNOLOGICAL ENVIRONMENT:
Forces that create new technologies which lead to the development of
new product and new market opportunities.
Technological environment is changing rapidly

New technologies create new markets and opportunities
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
Every new Technology replaces an
older technology. For example, how
we communicate with each other.

Marketers should watch the
technological environment closely so
their products will not be outdated.

Adding marketing people to the
research and development (R&D) teams is important to have a
better marketing orientation.

Being aware of the government regulations when applying new
product or technologies and developing new safe products.
5. POLITICAL ENVIRONMENT:
Political Environment: Laws, government agencies, and pressure groups
that influence and limit various organizations and individuals in a given
society.

Governments develop public policy to guide commerce.
Public Policy: The sets of laws and regulations that limit business for
the good of society as a whole.
 Marketing activities are subjected to a wide range of laws and
regulations such as:

fair trade practices

products safety

truth of advertisements

consumer privacy
Example of a Public Policy in Bahrain: Decree Low No. (35) of 2012 with
respect to consumer protection. (Source: http://www.moic.gov.bh/)
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6. CULTURAL ENVIRONMENT:
Cultural Environment: Institutions and other forces that affect society’s
basic values, perceptions, preferences, and behaviors.
The following cultural characteristics can affect marketing decision making:
 Persistence of cultural values: people in a given society hold many
beliefs and values. And these can be classified to:
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 and include
people’s views of themselves, others, organization, society, nature, and
the universe
Marketers have some chance of changing secondary values, but little
chance of changing core values. People are more “persistent” to the core
values.
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Kotler, Phillip and Armstrong, Gary., Principles of Marketing (Version 12/E). Pearson
Education Inc. New Jersey (2006)
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