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Chapter 3

Chapter 3 Notes


Department
Management (MGM)
Course Code
MGMA01H3
Professor
Alison Jing Xu
Chapter
3

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Chapter 3 Analyzing the Marketing Environment Notes
marketing environment the actors and forces outside marketing that affect marketing management’s ability to build and
maintain successful relationships with target customers
the marketing environment is made up of a microenvironment and a macro-environment
microenvironment the actors close to the company that affect its ability to serve its customers—the company, suppliers,
marketing intermediaries, customer markets, competitors, and publics
macro-environment the larger societal forces that affect the microenvironment—demographic, economic, natural,
technological, political, and cultural forces
The Company’s Microenvironment
marketing success will require building relationships with other company departments, suppliers, marketing intermediaries,
customers, competitors, and various publics, which combine to make up the company’s value delivery network
Suppliers
marketing managers must watch supply availability and costs
supply shortages or delays, labour strikes, and other events can cost sales in the SR and damage customer satisfaction in the LR
rising supply costs may force price increases that can harm the company’s sales volume
most marketers today treat their suppliers as partners in creating and delivering customer value
Marketing Intermediaries
marketing intermediaries firms that help the company promote, sell, and distribute its goods to final buyers
they include resellers, physical distribution firms, marketing services agencies, and financial intermediaries
resellers are distribution channel firms that help the company find customers or make sales to them
physical distribution firms help the company to stock and move goods from their points of origin to their destinations
marketing service 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 markets
financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance
transactions or insure against the risks associated with the buying and selling of goods
Competitors
marketers must gain strategic advantage by positioning offerings strongly against competitors’ offerings in minds of consumers
no single competitive marketing strategy is best for all companies
each firm should consider its own size and industry position compared to those of all its competitors
Publics
public any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives
there are 7 types of publics:
oFinancial publics. This group influences the company’s ability to obtain funds, such as banks and shareholders.
oMedia publics. This group carries news, features, and editorial opinion, such as newspapers, and TV and radio stations.
oGovernment publics. Management must take government developments into account. Marketers must often consult the
company’s lawyers on issues of product safety, truth in advertising, and other matters.
oCitizen action publics. Marketing decisions may be questioned by consumer organizations, environmental groups,
minority groups, and others. Its public relations department can help it stay in touch with consumer and citizen groups.
oLocal publics. This includes neighbourhood residents and community organizations. Large firms appoint a community
relations officer to deal with community, attend meetings, answer questions, and contribute to worthwhile causes.
oGeneral public. A company needs to be concerned about the general public’s attitude toward its products and activities.
The public’s image of the company affects buying habits.
oInternal publics. This group includes workers, managers, volunteers, and the board of directors. Large companies use
newsletters and other means to inform and motivate their internal publics. When employees feel good about their
company, this positive attitude spills over to external publics.
Customers
consumer markets consist of individuals and households that buy goods and services for personal consumption
business markets buy goods and services for further processing or for use in their production process
reseller markets buy goods and services to resell at a profit
government markets are made up of government agencies that buy goods and services to produce public services or transfer the
goods and services to others who need them at a cheaper cost or for no cost at all
international markets consist of these buyers in other countries, including consumers, producers, resellers, and government
The Company’s Macro-environment
Demographic Environment
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