Lecture 2.2 Marketing Environment - Part 2

Question 1

What is the definition of the Microenvironment?

Answer 1

They are the actors close to the company which affect it’s ability to serve it’s customers. Suppliers, marketing intermediaries, competitors, customers and distributors.

Directly influence and somewhat controllable in nature.

Question 2

What is the definition of the Macroenvironment?

Answer 2

The larger societal factors which affect the microenvironment: Demographic, economic, social, technological, environmental and political/legal.

Affects all the firms in the market and uncontrollable by nature.

Question 3

The Microenvironment in further detail:

What are the 5 actors:

Answer 3

All the actors work together to form the company’s value creation and delivery network:

Company —> Suppliers —> Marketing intermediaries. —> Competitors —> Publics —> Customers.

Question 4

The company:

Answer 4

The roles of marketing in a company:
- Marketing managers must work closely with other company departments.
- Marketing takes the lead, all other departments have to the responsibility to profitably recapture customer value.

Question 5

Suppliers:

Answer 5

They supply and resource the materials which the company uses to produce the goods/service they offer.

It is important to manage supplier relationships because the business can ensure the sufficient supply of products and services for the company at:

• Reduced costs
• Foster innovation
• Process improvements.

Question 6

Marketing intermediaries:

4 different types:

Answer 6

Resellers (distribution channel firms): help a firm find customers or make sales for them.

Physical distribution firms: help the company move their stock from their point of origin to their destination.

Marketing service agencies: are marketing research firms which help the company target and promote it’s products to the correct markets.

Financial intermediaries (banks and insurance companies): help finance transactions and insure against the risks associated with buying and selling goods.

Question 7

What are marketing intermediaries?

Answer 7

They are firms that help the company promote, finance, sell and distribute its goods to the final users.

Question 8

Competitors:

Answer 8

Marketing concept states for a firm to be successful they must provide greater customer value and satisfaction than competitors.

Competitive analysis:
- Brand comp
- Product comp
- Form comp
- Generic comp

Question 9

What is the definition of publics?

Answer 9

Any group that has an actual or potential interest in or impact on an organisation’s ability to achieve its
objectives.

Question 10

Examples of some publics:

Answer 10

Financial publics: Influences a company’s ability to obtain funds e.g. banks and shareholders

Local Publics: Group includes local communities and residents.

Government publics: Management must take government developments into account. May be due to issues with product safety or truth in advertising.

Question 11

Customers:

Answer 11

They are the most important actors in a company’s microenvironment. Aim of the entire value delivery network is to engage target customers and create strong relationships with them.

2 main types of customers are B2B and B2C.

Aswell as reseller markets, government markets and international markets.

Question 12

What are the 6 factors of the Macroenvironment:

Answer 12

-Demographic
- Economic
- Natural
- Technological
- Political
- Cultural

Question 13

The demographic environment:

Answer 13

The study of the human population in terms of size, location, age, gender, race, occupation and other characteristics. e.g. levels of education, cultural norms and social attitudes.

Changing age structure of the population:
- baby boomers (increasing life expectancy)
- Millenial’s (Generation Y) - demographic of people born between 1980s and late 1990s
- Generation Z - people born between the late 1990s and early 2010s.
- Generational marketing.

Question 14

The economic environment:

Answer 14

Consists of economic factors which affect consumer purchasing power and spending patterns.

Factors within the economic environment which have an effect on organisation’s supply and demand:
- Unemployment rates
- Interest rates
- rates of taxation
- Exchange rates
- Globalisation

Question 15

The natural environment:

Answer 15

Involves the natural environment and physical resources that are needed as inputs by marketers.

Example: COVID-19 Pandemic.

Current trends:
- Shortages of raw materials
- Increased pollution
- Increased government intervention.
- Environmentally sustainable strategies.

Question 16

technology:

Answer 16

Is the most dramatic force in shaping and changing the marketing world.

Marketers have had to adapt and change to the changes in technology:
- Enhancing the customer experience
- using technology in product development, innovation and marketing activities.

Question 17

Political and social environment:

Answer 17

• Increased emphasis on ethics and firms being more socially responsible.
• Political environment consists of laws, government agencies and pressure groups.

e.g. global trade agreements, tax implications, laws and government policies.

Question 18

Cultural environment:

Answer 18

Forces that affect a society’s basic values, perceptions, preferences and behaviours:

• Core beliefs and values.
• How people view themselves.
• People’s view of society.

Question 19

PESTLE FRAMEWORK:

Answer 19

Is used to study the key external factors that influence an organisation.

POLITICAL
ECONOMIC
SOCIAL
TECHNOLOGICAL
LEGAL
ENVIRONMENTAL

None of these factors work in isolation, they are all interdependent as a change in one will almost certainly lead to a change in another.

Question 20

Examples for the PESTLE framework:

Answer 20

P - government policies, instability in overseas markets and labour laws.

E - interest rates, exchange rates and inflation

S - population growth, health consciousness and demographics.

T - New ways of producing goods and services and new ways of communicating with customers

L - Health and safety, equal opportunities and data protection

E - pollution targets, carbon footprints and CSR.