THE MARKETING ENVIRONMENT

Marketing environment consist of force that may affect the ability of the organization or the industry to
meet the organizational objectives

These forces may affect transaction involving its targeted consumers or generic operations of the
industry

Changes in the marketing environment provide major surprises and shocks in the industry

The environment offers both threats and opportunities

Marketing environment requires the use of marketing research and development to monitor changes in
the environment

Marketing environment is divided into two

1. Micro-environment
2. Macro-environment
1. MICRO ENVIRONMENT[controllable variations ]
Micro environment constitute these forces inside and close to the company and interact with
the company on a daily basis that affect its ability to achieve its objective
Elements of micro environment
I. The organization itself
II. Suppliers
III. Marketing intermediaries
IV. Customers /market itself
V. Competitors
VI. The public
A. The organization itself

It’s the most important element and it’s divided into many units which are related

In services marketing the marketer interacts with all the units in the organization

Organizational unit include:

I. Top management team-it is responsible for coordinating organizing planning controlling and
forecasting activities in the organization
II. Finance department
III. Research and development
IV. Purchasing department
V. Manufacturing department

All these depts. are interrelated and interacts on a day to day basis

B. Suppliers

These are firms or individuals who provide resources needed by the organization to enable them to
produce their products [includes suppliers of capital, land, water, electricity and materials] marketing
manager must maintain a good relationship with suppliers so at to reap maximum benefits and
opportunities in the market

Poor relationship with suppliers’ maybe a great threat to the organization

E.g.;

a. Suppliers may shorten quantities supplied

b. May delay delivering the materials
c. Can decide to supply
d. Suppliers can shift their loyalty to competitors
e. Can supply you with poor quality materials
f. Can leak production secrets to the competitors

C. MARKET INTERMEDIARIES

These are the independent organization that directly aid in the flow of goods and services between the
organization and its customers

The link the organization and its market and the organization and its suppliers

These intermediaries include transport industry, warehousing, promotion industry, financial institution
and insurance

D. THE CUSTOMERS/MARKET

These are the consumers both potential and actual

These are the organization or people with wants to satisfy, money to spend and the willingness to spend

The organization must study the market and understand the importance of the market to the
organization

TYPES OF CONSUMER /MARKET

 THE CONSUMER MARKET –individuals or household who buy goods for personal use
 Industrial/organizational market-organization that buy goods or services for further processing
 RESELLER MARKET-organization that buy goods for resale at a profit
 GOVERNEMENT MARKET-government agencies that buy products in order to produce public
goods e.g. roads, schools, hospitals etc…
 INTERNATIONAL MARKETS-these foreign buyers of goods and services
E. COMPETITORS

Must closely monitor competitors’ strategies and strive to satisfy customers better than competitors

TYPES OF COMPETITORS

 DESIRE COMPETITORS –a competitor who satisfies other needs of consumers which he

organization has failed to satisfy he fills the gap that exists in the consumer
  GENERIC COMPETITOR-competitor who satisfies the same needs of the organization but in a
cheaper way. This can be done by production of a cheaper product by use of cheaper raw
materials or cheap labor
 PRODUCT FORM COMPETITOR –competitors who offer similar products but in a different form
Products are differentiated by smell .size, shape, color etc…
 BRAND COMPETITOR –Competitors who satisfy the same need and offer the same product but
are differentiated through branding or naming
F. THE PUBLIC

Group of people that have interest in the activities and has an effect in the organization ability to
achieve its objectives

They include;

Banks, Media, Government, Citizen

Local public [surrounding community society]

Internal public –include volunteers, management board who work for the organization –
they must be motivated so as to feel good and have a good image pf the organization to the public.

2. Macro-environment

Refers to all the forces outside the organization that affect the ability of the organization to satisfy
customers

Macro environment may consist of province .county where the organization is operating

ELEMENTS OF MACRO ENVIRONMENT

DEMOGRAPHIC ENVIRONMENT
ECONOMIC ENVIRONMENT
NATURAL ENVIRONMENT
TECHNICAL ENVIRONMENT
POLITICAL ENVIRONMENT
CULTURAL ENVIRONMENT
I. DEMOGRAPHIC ENVIRONMENT

Refers to human population in terms of size density age sex location occupation and other measurable
statistics

If a population consist of more females than males then the organization should produce goods that
appealing to the females without ignoring the minority males

II. ECONOMIC DEVELOPMENT

These are factors affecting consumers purchasing power and it turn affect their spending habits

Economic environment consist

1. The level of income of the people

 2. Taste and preference of the consumers

3. Prices of products

4. Selling and investment

5. Availability of credit to the customers

6. If income of the people increases the pattern of the people buying also increases

III. TECHONOGICAL DEVELOPMENT

Refers to changes in technology which affect production processes

Every new technology replaces an old technology and sometimes new technology can lead to closure of
the business

Organization must prepare to embrace new technology change in order to remain relevant

IV. POLITICAL ENVIRONMENT

Comprises of legal environment, government agencies pressure groups that influence an organization
activity

Laws are passed to define and prevent unfair competition.

They also protect consumers from unfair business practices e.g. poor quality products and
mismanagement from the organization

Government sets up various policies so as to regulate marketing activities through an act of parliament

Banking industry is regulated by such acts; central bank of Kenya

; Micro finance act

; Deposit protection fund act

; Employment act

V. CULTURAL ENVRONMENT

Culture is the way of life of people

The society will share peoples beliefs values and life style and hence determine what item thy will buy
ad consume

Certain culture prohibit consumption of certain products

Change sin traits of a society may change the desire for new products eg mobile banking and mobile
money transfers

VI. NATURAL ENVIRONMENT

Consist of natural resources surrounding the organization e.g. minerals, water, sunshine, land, rocks
Industrial activities can affect natural resources around them through sound, air and water pollution

Natural resources can be an opportunity for industrial growth

Organization should ensure natural resources around them are protected e.g. forest water etc.

Minerals and oil should be used wisely and research and development organization should find ways of
substituting natural resources

THE MARKETTING SYSTEM-is a network of buyers sellers and other factors that come together to trade
in a given product or service

Direct market players’ producers’ buyers and consumers who drive economic activities in the market
.suppliers of supplying goods and services such as finance equipment and business and business
consulting