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Marketing Environment – Definition, Types, Importance and Examples

March 11, 2020 | By Hitesh Bhasin | Filed Under: Marketing

Various environmental factors affect the way a business is operated. These environmental factors can be divided into two broad categories, such as the internal environment and the external environment. A business is required to adapt to these marketing environments to stay profitable and ahead in the competition . In this article, you will learn about different types of marketing environments and various components of the marketing environment.

Table of Contents

The marketing environment can be defined as a combination of both internal environmental factors and external environmental factors. These marketing environments surround a business and influence the operations of the business.

What is the marketing environment?

A marketing environment is a combination of internal and external environmental forces and factors that influences the business operation of a business and its ability to serve its customers. It is essential to know both internal as well as external environmental factors. Therefore, enterprises keep checking on them to do their business without any legal trouble and to generate maximum profit.

The internal marketing environment consists of factors like material, machines, workers, money, etc. All of these components are necessary to run a business successfully. For example, if the raw material is not available on time and in sufficient quantity, then the work of production will become slow, and the company will not be able to fulfill the demand of the product in the market .

On the other hand, the external marketing environment can be divided into two categories, such as macro external marketing environment and micro external marketing environment. The microenvironment is closely related to the business and constitutes all external business activities such as distribution and promotion of products of the company.

The macro-environmental components affect all the companies serving in a single industry similarly. For example, changes in the laws and rules related to production or doing business will apply to all companies likely. In the next section, you will learn about all the internal as well as external components of an organization.

Components of the marketing environment

There are broadly two components of the marketing environment, such as the internal environment and external environment. Different types of parts of the marketing environment are categorized under these two broad categories.

The internal environment of a business can be controlled, but there is very little control of a business in the external marketing environment. Let us learn about both components one by one.

1. Internal environment

The internal environment is formed of all the internal factors and forces of an organization. The internal environment of an organization is within the control of the marketer, and he can change or modify the environment as per the demand in the market and requirement of the business.

The following are the five factors that form the internal environment of an organization. These factors are also referred to as five Ms of a business.

All the components of the internal environment are as important as that of the components of an external environment. However, the internal environment factors are changed according to the change in the external marketing components. For example, an organization is required to upgrade its technology if new technology in the market is introduced.

The internal environment of an organization also includes the marketing department, the sales department, the human resource department, and the manufacturing department.

2. External Marketing environment

The external marketing environment consists of all the external marketing factors that exist outside the organization, and the marketer has little or no control over the external marketing environment factors.

The external marketing environment can be divided into two categories, such as microenvironment and the macro environment .

Let us learn about both macro and micro environments one by one.

A. Microenvironment

The microenvironment of a business consists of all the factors and forces that are directly associated with the company. The micro components of the external environment are also known as task environments.

The following are the various components of the micro external environment.

1. Suppliers

Suppliers are an essential part of every organization. Suppliers supplies material and all other types of resources required for the production of products. A company can run its business successfully only if its suppliers supply material of good quality and on time.

2. Market intermediaries

Market intermediaries are the intermediary parties that help a business to distribute its products in the market. The market intermediaries can be wholesalers, retailers, and distributors. All of these market intermediaries are an essential part of the business as they are the face of the company in the market and represent the products of the company in the market.

3. Partners

Business partners are the business entities that conduct business with the organization. For example, advertising agencies, banking and insurance companies , market research organization s, brokers, and transportation companies, etc. A company is required to partner with several other companies to run a successful business.

4. Customers

Customers are the most crucial component of the business. Customers are the target audience of the product, and the preference of customers influences all the marketing and business efforts of a company.

The public is people other than the target audience of the organization. The public plays a vital role in the success of the business as it can build or destroy the image of a company in the market. The public has the power to influence the purchasing decision of the target audience. Especially in the times of the internet, the ability to control the public has increased as they can share their views about your products and services on the internet freely.

6. Competitors

The last but not least component of the microenvironment is the competitors of a business. The competitors are the other businesses that sell similar products as your products or are part of the same strategic group in the industry.

B. Macro Environment

Macro components of a marketing environment consist of all external forces and factors that impact the whole industry rather than just changing an organization directly. Therefore, the macro marketing environment is also referred to as a large environment.

The following are the six components of the macro environment. Let us learn about them one by one.

1. Technological environment

Technology is one of the elements that have great potential to influence the business of an organization. It is dynamic, as it changes rapidly. Technology provides several threats and opportunities to the business environment .

The technological environment consists of research and development in technology, innovation, inducement of technology, and technical alternatives, etc.

2. Demographic environment

The demographic environment component of the macro marketing environment consists of people that form a market. The population of the demographic environment can be characterized based on various factors such as age, gender, density, size, location, race, and occupation, etc.

The demographic environment is a crucial component for business as the company design and builds its products based on the characteristics of the demographic environment.

3. Social-cultural environment

The social-cultural component of a macro environment is formed using values, lifestyle, culture , beliefs, and prejudices of the target audience of a business. The social-cultural environment varies from one region to another region.

People living in one area might prefer a different type of product than the preference of the product of the people of any other region. Businesses are required to have in-depth knowledge of the social-cultural environment to design a product or service that is preferred by most people.

4. Economic environment

The economic environment component is a type of component that influences all industries. The economic environment affects the purchasing power and spending patterns of the buyers.

The following are the different factors that form an economic environment.

Interest Rates.
Gross Domestic Products (GDP).
Gross National Product (GNP).
Income distribution.
Government funding.
Other significant economic variables.

5. Political-legal environment:

The political-legal environment consists of laws and policies of a country. In addition to rules and procedures, the political-legal environment also includes agencies and pressure groups . All of these political entities impact the working capacity of the industry in society.

6. Physical environment:

The last component of the macro environment is the physical environment in which an organization exists. The following are the components of the physical environment.

Climate condition
Environmental change.
Availability of the raw material.
Natural resources like water.

Examples of the marketing environment

Examples of the internal marketing environment.

The best example of an internal marketing environment is the office culture of the organization. Your office culture consists of the values, beliefs, and attitudes of your employees . All of these factors determine how the employees of your organization will behave. For example, in an organization where employees are encouraged to perform in a team and support the members of the group are more likely to perform better than the organization where employees compete with one another.

Moreover, employees are likely to perform better in a positive internal marketing environment rather than an environment where employees are nagged continuously and pressured to perform well. Google is one of the best companies that provide a positive and very healthy internal environment to its employees. Because of this, Google is now one of the leading companies in the industry.

Examples of the external marketing environment

Examples of external marketing environment

The external marketing environment of an organization is formed of micro and macro environment. The microenvironment consists of suppliers, market intermediaries, partners, customers, public, and competitors, etc. for example, suppliers of an organization alter the business environment of an organization to a certain extent. If suppliers supply good quality material and supply that material on time, then the organization can produce the right quality products and can fulfill the demand in the market efficiently.

Another vital component of the micro marketing environment is the market intermediaries. The market intermediaries of your business play an essential role in the success of your business. They are the face of your company. They interact with your customers daily and understand your customers and also your product. Let us take the example of a retailer. A retailer sells products from different companies in the market. It is in the hands of a retailer to decide whether to promote your product or not.

The sales of your products will significantly depend on the people who represent you in the market. Therefore, it is necessary to provide proper incentives to your representatives and provide a good margin to them on your products so that they promote your products to their customers rather than promoting the products of your competitors.

On the other hand, a macro marketing environment does not affect an organization directly but affects the whole industry. An organization is required to perform its business operations according to the macro-environment factors. The examples of the macro-environment are demographic environment, social-cultural environment, economic environment, political-legal environment, physical environment, and technological environment, etc.

The business operations of an organization are controlled by the laws and policies decided by the government. In addition to this, the technological environment influences the business environment more than any other macro-environment factor. A business is required to upgrade the technology that it uses for business operations from time to time in order to stay ahead in the competition.

The technological environment has both advantages and disadvantages for an organization as an organization is always required to think of innovation to compete with its competitors. On the other hand, it is also costly for an organization to update its technology regularly.

Importance of marketing environment

The marketing environment holds great importance when it comes to conducting business successfully. Businesses of all sizes, whether small or large or required to do their business within the marketing environment.

The existence of the company, its profits, and its losses largely depends on the internal as well as the external environment around it. Therefore, it becomes essential for a marketer to understand and study the marketing environment thoroughly to generate profits and stay in business for a more extended period.

Let us understand why the understanding and knowledge of the marketing environment is necessary to run a successful business.

1. To learn about your competitors:

A business needs to learn about its competitors to stay ahead in the competition. Different companies fight for a single opportunity in a niche market using different strategies .

A deeper understanding of the marketing environment helps a marketer to learn about the business strategies and plans of their competitors. Having this knowledge helps the marketers to understand the policy of their competitors and plan their business strategies accordingly.

2. To learn about your customers:

Customers are an essential part of a business. All the business activities of a company are focused on serving its customers better. Therefore, a company gives great importance to learn about their customers and their changing preferences to serve them better and to have a long relationship with them. The marketing environment helps the marketer to understand the customers and their preferences.

For example, when there is a slowdown in the economy and inflation is on the surge. At such times, people either prefer to spend less or cease their spending to save money.

Therefore, people look for goods and services at lower prices. Consequently, a company must either introduce new products with lower prices or sell their products at discounted prices so that they can still make sales when there is an economic slowdown.

3. Necessary for future planning

A business is required to plan to meet the demand of the market and produce as per the latest trends in the market. It is essential to learn about the internal and external environment to plan efficiently.

4. To make most out of the latest trends

Trends change rapidly, and the change is rapid in fashion and other similar industries. Companies that are part of such industries are required to keep a check on the changing trends. To do this, they learn about every aspect of the marketing environment so that they can prepare a foolproof plan for the future.

5. To learn about all the threats and opportunities related to business

Understanding the marketing environment is necessary to learn about the risks and opportunities associated with the company. The marketer can take advantage of being a first-mover if they know the opportunities related to the business. Moreover, a business must learn about the threat associated with the company to take precautions to stay safe.

Liked this post? Check out the complete series on Marketing

Competitive Environment – Definition, Types, Factors and Examples
What is Macro Environment? Definition, Factors, & Examples
Importance of Marketing Environment
Political Environment: Meaning, Examples & PEST (ELI) Analysis
What is Micro Environment in Business? Definition & Factors
What is Internal Environment? Definition and Key Factors
Individual Marketing and its Impact on Today’s Business Environment
5 sales myth which have to be ignored in today’s sales environment
Features of Business Environment – Meaning and 10 Important Features
Outdoor Advertising – Definition, Importance, Types and Examples

About Hitesh Bhasin

Hitesh Bhasin is the CEO of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about.

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Marketing Environment, Essay Example

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Introduction

In this paper we are going to look at the term market environment that relates to what we learned in class and some of the definitions of the terms that are related to it. The term market environment refers to the outside forces of the market that affects the ability of the market management to maintain a relationship which is successful with the targeted customers. The environment comprises of the macro environment and the microenvironment marketing.

The microenvironment comprises of the suppliers, the intermediaries of marketing, the competitors, the public, the customer markets and the company itself. These forces are always close to the company and mostly it affects its capability of serving the customers. The suppliers are also a significant factor of the microenvironment since any small delay of the service results to the dissatisfaction of the company’s customer. Another very important aspect of microenvironment is the customers that include the individuals like the business markets. They purchase the goods and services, which they later transform them into their own products and resell them to the market. Competitors as well lands on this category and they are essential since they offer competition within the market. The final factor of the microenvironment is the public. It comprises of the individual that has an impact or interest in the company’s ability to meet its objectives. On the other hand, the macro environment includes all the forces that are found on the larger society and mostly they put their effects on the microenvironment. It includes issues such as the demography which comprises of the study of human population in consideration to location, density, size and the age.

It also includes of the economic environment that considers the power of purchasing the potential customers and way they spend their income. Natural environment is also one of them, which includes the natural resources that a company might use as the input to have the effect on their marketing activities. It also comprises of the technological environment, political environment that includes things like the laws while the last one is the cultural environment, which consists of the beliefs and basic values of a certain group of people. Therefore, it is very important for the company to be extra active when it comes to the marketing environment. This is to create a kind of environment that they will live to prosper in the markets with the largest potential of customers.

To understand it better, the paper puts into a consideration the Tourism Industry and the types of its marketing mix. While tourism is influenced by a number of factors, these factors actually influence the revenues accruing to the given tourist destination country. In order to ensure that a country gets the optimal income from tourism, it is important for the specific tourist destination to know the relationship that exists between and among the various factors in the industry. We have several types of the marketing mix, but let us look at a few of them that fall under the tourism industry.

One of them is the Price, whereby they can use several ways of pricing the industry. Place is also another element which is a mechanism through which the services are moved from the industry to the consumer, who is a tourist in this case. The third one is the promotion that comprises of the necessary tools that a marketer may use for the marketing communication. The fourth one is the People or the tourists, who are the most significant of any service or experience.

Work Cited

Phillip, Kotler, and Armstrong, Gary. Principles of Marketing (Version 12/E). Pearson Education Inc. New Jersey. (2006).

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Marketing Environment: Explanation, Components, & Importance

Several internal and external factors affect a business’s marketing activities. While some of the factors are in the control of the business, most of these are not, and the business has to adapt itself to avoid being affected by changes in these factors. These external and internal factors group together to form a marketing environment in which the business operates.

What Is Marketing Environment?

The marketing environment is the combination of external and internal factors and forces that affect the company’s ability to establish a relationship and serve its customers.

The marketing environment of a business consists of an internal and an external environment.

The internal environment is company-specific and includes owners, workers, machines, materials etc.
The micro or task environment is also specific to the business but is external. It consists of factors engaged in producing, distributing, and promoting the offering.
The macro or the broad environment includes larger societal forces which affect society as a whole. It is made up of six components: demographic, economic, physical, technological, political-legal, and social-cultural environment.

“A company’s marketing environment consists of the actors and forces outside of marketing that affect marketing management ability to build and maintain successful relationships with target customers”. – Philip Kotler

What Are The Components Of Marketing Environment?

The marketing environment is made up of the internal and external environment of the business. While the internal environment can be controlled, the business has less or no control over the external environment.

Internal Environment

The internal environment of the business includes all the forces and factors inside the organisation which affect its marketing operations. These components can be grouped under the Five Ms of the business, which are:

Men: The people of the organisation, including both skilled and unskilled workers.
Minutes: Time taken for the processes of the business to complete.
Machinery: Equipment required by the business to facilitate or complete the processes.
Materials: The factors of production or supplies required by the business to complete the processes or production.
Money: Money is the financial resource used to purchase machinery, materials, and pay the employees.

The internal environment is under the control of the marketer and can be changed with the changing external environment. Nevertheless, the internal marketing environment is as important for the business as the external marketing environment. This environment includes the sales department, the marketing department, the manufacturing unit, the human resource department , etc.

External Environment

The external environment constitutes factors and forces which are external to the business and over which the marketer has little or no control. The external environment is of two types:

Micro marketing environment
Macro marketing environment

Micro Environment

The micro-component of the external environment is also known as the task environment. It comprises external forces and factors that are directly related to the business. These include suppliers, market intermediaries, customers , partners, competitors and the public.

Suppliers include all the parties which provide resources needed by the organisation.
Market intermediaries include parties involved in distributing the product or service of the organisation.
Partners are all the separate entities like advertising agencies, market research organisations, banking and insurance companies, transportation companies, brokers, etc., which conduct business with the organisation.
Customers comprise the target group of the organisation.
Competitors are the players in the same market who targets similar customers as the organisation.
The public comprises any other group with an actual or potential interest or affects the company’s ability to serve its customers.

Macro Environment

The macro component of the marketing environment is also known as the broad environment. It constitutes the external factors and forces which affect the industry as a whole but don’t have a direct effect on the business. The macro-environment can be divided into six parts.

Demographic Environment

The demographic environment is made up of the people who constitute the market. It is characterised as the factual investigation and segregation of the population according to their size, density, location, age, gender, race, and occupation.

Economic Environment

The economic environment constitutes factors that influence customers’ purchasing power and spending patterns. These factors include the GDP, GNP, interest rates, inflation, income distribution, government funding and subsidies, and other major economic variables.

Physical Environment

The physical environment includes the natural environment in which the business operates. This includes climatic conditions, environmental change, accessibility to water and raw materials, natural disasters, pollution etc.

Technological Environment

The technological environment constitutes innovation, research and development in technology, technological alternatives, innovation inducements, also technological barriers to smooth operation. Technology is one of the biggest sources of threats and opportunities for the organisation, and it is very dynamic.

Political-Legal Environment

The political & Legal environment includes laws and government policies prevailing in the country. It also includes other pressure groups and agencies which influence or limit the working of the industry and/or the business in society.

Social-Cultural Environment

The social-cultural aspect of the macro-environment is made up of the lifestyle, values, culture, prejudice and beliefs of the people. This differs in different regions.

Importance of Marketing Environment

Every business, no matter how big or small, operates within the marketing environment. Its present and future existence, profits, image , and positioning depend on its internal and external environment. The business environment is one of the most dynamic aspects of the business. In order to operate and stay in the market for a long, one has to understand and analyse the marketing environment and its components properly.

Essential for planning

An understanding of the external and internal environment is essential for planning for the future. A marketer needs to be fully aware of the current scenario, dynamism, and future predictions of the marketing environment if he wants his plans to succeed.

Understanding Customers

Thorough knowledge of the marketing environment helps marketers acknowledge and predict what the customer actually wants. An in-depth analysis of the marketing environment reduces (and even removes) the noise between the marketer and customers and helps the marketer to understand consumer behaviour better.

Tapping Trends

Breaking into new markets and capitalising on new trends requires a lot of insight into the marketing environment. The marketer needs to research every aspect of the environment to create a foolproof plan.

Threats and Opportunities

Sound knowledge of the market environment often gives a first-mover advantage to the marketer as he makes sure that his business is safe from future threats and taps future opportunities.

Understanding the Competitors

Every niche has different players fighting for the same spot. A better understanding of the marketing environment allows the marketer to understand more about the competition and about what advantages the competitors have over his business and vice versa.

Features Of Marketing Environment

The marketing environment surrounding a business possesses the following five features:

Specific and general forces: The marketing environment is made up of both specific and general forces. Specific forces such as customers and investors directly affect the business’s working, while general forces like social, legal, technological, or political factors indirectly affect the business’s working.
Complex: The marketing environment is a complex interaction of several elements, factors, conditions, and forces that affect the business’s ability to establish a relationship and serve its customers .
Dynamic: The environment surrounding a business is very dynamic as its constituents do not remain stable and change over time. Moreover, while marketers can control some of the marketing environment elements, several elements are out of the marketer’s control.
Uncertain: Forces that rule the marketing environment are highly uncertain, and it becomes tough for a marketer to predict market forces to develop marketing strategies and plans.
Relative: Marketing environments are also relative in nature. A specific product might have a good demand in the USA but not in India because of the different marketing environments in the two countries.

A startup consultant, digital marketer, traveller, and philomath. Aashish has worked with over 20 startups and successfully helped them ideate, raise money, and succeed. When not working, he can be found hiking, camping, and stargazing.

1.3 Factors Comprising and Affecting the Marketing Environment

Learning outcomes.

By the end of this section, you will be able to:

1 Define and describe the marketing environment.
2 Explain the components of the marketing environment.
3 Identify and describe the internal factors of the marketing environment.
4 List and describe the components of the micro- and macroenvironments.

The Marketing Environment Defined

Organizations don’t operate in a vacuum. They’re not self-contained, self-sufficient machines; rather, they are complex systems that require interaction with facets of both their internal and external environments in order to survive and prosper. In this section, we’re going to explore the internal and external factors that drive an organization’s marketing activities.

The marketing environment is comprised of both the external and internal factors and forces that influence an organization’s decision regarding its marketing activities. Some of these factors—internal factors— are within the control of the organization. Other factors—external factors—are outside the control of the organization. We’ll explore these in more depth below.

To illustrate this concept of internal and external factors and forces, think about your body as an organization. Your body is composed of several internal organs and systems, like your heart, lungs, and digestive system. These organs and systems function both independently and yet interdependently to keep your body going. The same is true with a business. The systems of the business are the people and departments that make up the internal organization (such as marketing, accounting, human resources, etc.). And just like the human body, these systems function independently and interdependently.

At the same time, your body is exposed to external influences, like expectations from your family and friends, cultural or gender stereotypes, and family responsibilities, that influence decision-making in either a positive or negative way. The same is true of the marketing activities of a business. They’re influenced by factors both from the macroenvironment and the microenvironment. Let’s take a closer look at these factors.

The Components of the Marketing Environment

As we’ll explore below, the internal environment is company-specific and includes the 5M framework and organizational culture. The external environment is subdivided into two components: the microenvironment (or task environment) and the macroenvironment (or broad environment), as illustrated in Figure 1.6

Components of the Internal Environment

The internal environment in marketing refers to those elements within the organization that define the atmosphere within the company’s structure. These factors include what’s known as the 5Ms of marketing and organizational culture.

The 5Ms of marketing (sometimes also called the 5M framework) is a marketing/management model that defines the elements of a marketing strategy that must be addressed in order to be successful. The five elements (sometimes known as the organization’s assets) include minds, minutes, machinery, materials, and money. 19 Let’s take a closer look at each of these factors:

Minds (Staffing): This “M” might well be considered the most important factor because it’s people who make sure the rest of the 5Ms are utilized in a productive manner to achieve the goals of the organization. 20
Minutes (Time): Time is another valuable asset. We’ve all heard the saying that time is money, and this is true within the marketing arena. For example, in formulating and implementing a new strategy, marketing needs to assess factors such as whether existing production processes are as efficient and effective as they can be, the length of time it takes the organization to introduce a new product to the market, and how responsive the organization is to competitive pressures. 21
Machinery (Equipment): Machinery consists of the equipment and/or physical assets used to process materials into finished or semifinished products.
Materials (Production): Materials consist of the inputs needed to produce goods and services.
Money (Finance): Perhaps second only to staffing, money is a very critical resource because it’s used to acquire and/or hire other resources.

Organizational culture is comprised of the shared values, attitudes, expectations, norms, and practices that guide the actions of all within the company. Think about organizational culture as “the way we do things around here,” and the culture can help or hinder an organization. For example, a good culture embodies positive traits that lead to improved performance and profit. On the other hand, a dysfunctional culture that’s toxic and/or inefficient can hinder even the most successful organization. 22

For an example of a positive organizational culture, consider Zappos , where happiness is at the core. Founder Tony Hsieh wrote a book on the topic and has said, “We’re willing to give up short-term profits or revenue growth to make sure we have the best culture.” 23 Hsieh was not afraid to put his money where his mouth was, either. In support of maintaining an outstanding company culture and a productive workforce, he instituted a policy that would pay new, unhappy employees $2,000 to quit following their four-week training period. 24

By contrast, consider what a dysfunctional culture can do to an organization. During the summer of 2020, The Ellen DeGeneres Show was called out for having a toxic work environment. Eleven employees spoke out publicly about the negative organizational culture. There were allegations of sexual misconduct, intimidation, and racism. 25 Ratings faltered as a result of the allegations, and DeGeneres ultimately decided to end her daytime talk show.

But how does organizational culture impact marketing? Here are three very tangible ways that your company’s culture can make a positive impact on marketing:

Branding and marketing efforts emanate from the organization’s core values and culture and guide the organization’s marketing message. Therefore, if your marketing message doesn’t match the reality of the business, it’s akin to that old adage of “putting lipstick on a pig.” 26 You’re talking the talk but not walking the walk.
A strong culture strengthens your marketing message because it gives prospective customers a better idea of the values of your business, and customers who know what you believe and value are much more likely to do business with you. For example, research has demonstrated that 86 percent of buyers are willing to pay more for a positive customer service experience. 27 Once again, think about the culture at Zappos. One of the ways in which the company has developed a strong following of loyal customers is through its policy that call-center employees are empowered to do “whatever it takes” to make the customer happy. Call-center employees don’t use scripts for calls, and there are literally no time limits on calls. 28
A strong organizational culture is also key in attracting and retaining employees. In his quest for a happier, more positive work environment, Hsieh implemented several policies at Zappos that he felt contributed to this environment, including a relaxed dress code, discounted food and drink, relaxation areas, and more. 29 TOMS (featured in Companies with a Conscience later in this chapter) is another excellent example of this.

Components of the External Environment

There are two elements within the external marketing environment: the microenvironment and the macroenvironment. Although the factors within these environments are not directly within the marketer’s control, they still influence the decisions made by marketers. We’ll first examine the factors in the microenvironment, as shown in Figure 1.7 .

The microenvironment consists of five predominant factors.

Suppliers . Suppliers (sometimes also called vendors ) are those partners from whom we receive the parts and products necessary for our business. Let’s assume that your company produces microwave ovens. Some of your suppliers may be providers of transformers, the turntable, control panels, magnetrons, etc. As long as you have options in terms of the component suppliers, the bargaining power of each supplier is relatively weak. However, if two suppliers merge and decide to raise the price of the component the new entity supplies, that vendor now wields increased power.
Market Intermediaries. Often, products are distributed by third-party sellers such as retailers, wholesalers, and others in the distribution channel. The reputation of these market intermediaries plays an important role in the marketing of the product or service, both positive and negative, so companies need to select and monitor market intermediaries on an ongoing basis. We’ll learn more about the roles of these intermediaries in Distribution: Delivering Customer Value , but let’s provide a couple of definitions and examples to help you better understand some of the parties in the distribution channel. Retailers (like Walmart or Target ) purchase large quantities of goods from producers and then sell smaller quantities to end customers for personal use or consumption. Wholesalers purchase large quantities of products from producers and then sell to smaller businesses such as retail stores. A good example of a wholesaler is Gexpro , which sells electrical supplies for the construction industry.
Customers. Understanding who your customers are will enable you to effectively reach them, whether online, locally in retail stores, or internationally.
Competitors. Successful marketing strategies must be implemented after consideration of your competition. Knowing who your competition is and what they are and are not offering allows you to find the gap in the market. You want to be where the competition is not, at least in the sense of offering something unique to a targeted market.
General Public . Because companies provide their offerings in communities that support them, they have an obligation to satisfy those communities. There’s an old saying that “perception is reality,” so marketers’ actions must be evaluated through the perceptual lens of those communities, because the public’s perception of you—your reputation—is essential to your success. 30

Components of the Macroenvironment

Obviously, marketers can’t ignore what’s going on in the external environment. One of the tools used by companies to assess the environment in which they are operating is a PESTLE analysis . PESTLE is an acronym for political, economic, social, technological, legal, and environmental factors that provide marketers with a comprehensive view of the whole environment from multiple angles. 31 These macroenvironment factors can be used to understand current external influences so that marketers can more easily identify what might change in the future, mitigate the identified risks, and take advantage of competitive opportunities (see Figure 1.8 ).

Let’s look at these factors more closely:

Political Factors. These factors include environmental and trade restrictions, political stability, and business policy. For example, Tesla announced in late 2021 that it is moving its headquarters out of California to Texas, following similar announcements by Hewlett Packard Enterprise (HPE) and Oracle , citing such things as lower housing costs and tax rates and fewer regulations, making it easier for companies to operate in Texas.
Economic Factors. Economic factors play a huge role in terms of a company’s prospects in a market. For example, economic factors affect pricing and can even influence the supply/demand curve for a product or service. For example, high inflation causes consumers to have less spending power, which translates into lower sales and revenue. In 2022, consumers experienced both product shortages and higher prices, blamed largely on COVID-19, Russia’s war on Ukraine, and the availability of certain commodities, such as corn, sunflower oil, and wheat. 32
Social Factors. Social factors take in a wide swath of elements, such as cultural norms and expectations, health consciousness, population growth/decline, the age distribution of a population, and even career attitudes. Let’s take one of these factors—age distribution—and examine how it impacts marketing. Baby boomers (born between 1946 and 1964) comprise approximately a quarter of the US population. It’s largely as a result of this group’s aging and retirement that active adult communities such as Del Webb and others have sprung up across the nation. 33
Technological Factors. These factors encompass the innovations and developments in technology that impact an organization’s operations, as well as the rate of technological change. For example, look at one simple technological change with which we’ve all become comfortable in the public arena over the past decade or so: free WiFi. Starbucks was able to take advantage of this change and reposition its coffeehouses and differentiate itself from competitors by offering free WiFi. 34
Legal Factors. These factors include changes to legislation impacting employment, industry regulation, licenses and permits, and intellectual property.
Environmental Factors. In the context of a PESTLE analysis, environmental factors refer to variables affecting the physical environment, like climate change, pollution, the scarcity of raw materials, and the growing concern over companies’ carbon footprints.

Knowledge Check

It’s time to check your knowledge on the concepts presented in this section. Refer to the Answer Key at the end of the book for feedback.

Market intermediaries
the competition
the customers
the resellers
Technological
Political and legal
Social and cultural
Economic factors
Natural factors
Political and legal factors
Social factors

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9.8 The Marketing Environment

Learning objectives.

Describe the external marketing environment in which businesses operate.
Discuss the factors that influence consumer behavior.

By and large, managers can control the four Ps of the marketing mix: they can decide which products to offer, what prices to charge for them, how to distribute them, and how to reach target audiences. Unfortunately, there are other forces at work in the marketing world—forces over which marketers have much less control. These forces make up a company’s external marketing environment , which, as you can see in Figure 9.14 “The Marketing Environment” , we can divide into five sets of factors:

Political and regulatory
Competitive
Technological
Social and cultural

Figure 9.14 The Marketing Environment

The Marketing Environment: Your company must have a political and regulatory environment, an economic environment, a competitive environment, a technological environment, and a social and cultural environment

These factors—and changes in them—present both threats and opportunities that require shifts in marketing plans. To spot trends and other signals that conditions may be in flux, marketers must continually monitor the environment in which their companies operate. To get a better idea of how they affect a firm’s marketing activities, let’s look at each of the five areas of the external environment.

The Political and Regulatory Environment

Federal, state, and local bodies can set rules or restrictions on the conduct of businesses. The purpose of regulation is to protect both consumers and businesses. Businesses favor some regulations (such as patent laws) while chafing under others (such as restrictions on advertising). The tobacco industry, for example, has had to learn to live with a federal ban on TV and radio advertising. More recently, many companies in the food industry have expressed unhappiness over regulations requiring the labeling of trans-fat content. The broadcasting industry is increasingly concerned about fines being imposed by the Federal Communications Commission for offenses against “standards of decency.” The loudest outcry probably came from telemarketers in response to the establishment of “do-not-call” registries.

All these actions occasioned changes in the marketing strategies of affected companies. Tobacco companies rerouted advertising dollars from TV to print media. Food companies reduced trans-fat levels and began targeting health-conscious consumers. Talent coordinators posted red flags next to the names of Janet Jackson (of the now-famous malfunctioning costume) and other performers. The telemarketing industry fired workers and scrambled to reinvent its entire business model.

The Economic Environment

Every day, marketing managers face a barrage of economic news. They must digest it, assess its impact, and alter marketing plans accordingly. Sometimes (but not recently), the news is cause for optimism—the economy’s improving, unemployment’s declining, consumer confidence is up. At other times (like today), the news makes them nervous—our economy is weak, industrial production is down, jobless claims are rising, consumer confidence has plummeted, credit is hard to get. Naturally, business thrives when the economy is growing, employment is full, and prices are stable. Marketing products is easier because consumers are willing to buy. On the other hand, when the economy is slowing (or stalled) and unemployment is rising, people have less money to spend, and the marketer’s job is harder.

Then there’s inflation, which pushes interest rates upward. If you’re trying to sell cars, you know that people facing higher interest rates aren’t so anxious to take out car loans. Sales will slip, and to counteract the anticipated slowdown, you might have to add generous rebates to your promotional plans.

Moreover, if you operate in foreign markets, you can’t focus on solely domestic economic conditions: you have to monitor the economy in every region where you do business. For example, if you’re the marketing director for a U.S. company whose goods are manufactured in China and sold in Brazil, you’ll need to know as much as you can about the economies in three countries: the United States, China, and Brazil. For one thing, you’ll have to pay particular attention to fluctuations in exchange rates, because changes will affect both your sales and your profits.

The Competitive Environment

Imagine playing tennis without watching what your opponent was doing. Marketers who don’t pay attention to their competitors are playing a losing game. In particular, they need to monitor the activities of two groups of competitors: the makers of competing brands and the makers of substitute products. Coke and Pepsi, for instance, are brand competitors who have engaged in the so-called cola wars for decades. Each tries to capture market share by convincing people that its soft drinks are better. Because neither wants to lose share to the other, they tend to resort to similar tactics. In summer 2004, both companies came out with nearly identical new colas boasting half the sugar, half the calories, and half the carbohydrates of regular colas. Coke called its product Coke C2, while Pepsi named its competing brand PepsiEdge. Both companies targeted cola drinkers who want the flavor of a regular soda but fewer calories. (By the way, both products failed and were taken off the market.)

Meanwhile, Coke and Pepsi have to watch Nantucket Nectars, whose fruit drinks are substitute products. What if Nantucket Nectars managed to get its drinks into the soda machines at more fast-food restaurants? How would Coke and Pepsi respond? What if Nantucket Nectars, which markets an ice tea with caffeine, introduced an ice tea drink with mega amounts of caffeine? Would marketers at Coke and Pepsi take action? What if Nantucket Nectars launched a marketing campaign promoting the health benefits of fruit drinks over soda? Would Coke and Pepsi reply with campaigns of their own? Would they respond by introducing new non-cola products?

The Technological Environment

When’s the last time you rented a VHS tape of a new movie? If you had trouble finding it, that’s because DVDs are in and videotapes are out. Videotape makers who were monitoring technological trends in the industry would probably have taken steps to keep up (go into DVDs) or otherwise protect themselves from losses (maybe even getting out of the market). In addition to making old products obsolete, technological advances create new products. Where would we be without the cell phone, digital cameras, text messaging, LASIK surgery, and global positioning systems?

Figure 9.15

An array of different media platforms (A DVD, CD-R, cassette tape, VHS, and floppy disc

Web sites like iTunes and Amazon.com are now offering customers the option of downloading movies. Do you think DVDs will suffer the same fate as videocassettes?

Sergio Carrasco – Tecnologia Obsoleta – CC BY-SA 2.0.

New technologies also transform the marketing mix in another important way: they alter the way companies market their products. Consider the revolutionary changes brought about by the Internet, which offers marketers a new medium for promoting and selling a vast range of goods and services. Marketers must keep abreast of technological advances and adapt their strategies, both to take advantage of the opportunities and to ward off threats.

The Social and Cultural Environment

Marketers also have to stay tuned to social and cultural factors that can affect sales. The values and attitudes of American consumers are in a state of almost constant flux; what’s cool one year is out of style the next. Think about the clothes you wore five years ago: would you wear them today? A lot of people wouldn’t—they’re the wrong style, the wrong fit, the wrong material, the wrong color, or just plain wrong. Now put yourself in the place of a marketer for a clothing company that targets teenagers and young adults. You wouldn’t survive if you tried to sell the same styles every year. As we said at the outset of this chapter, the key to successful marketing is meeting the needs of customers. This means knowing what they want right now, not last year.

Here’s another illustration. The last few decades have witnessed monumental shifts in the makeup of the American workforce. The number of women at all levels has increased significantly, the workforce has become more diverse, and telecommuting is more common. More people place more importance on balancing their work lives with the rest of their lives, and fewer people are willing to sacrifice their health to the demands of hectic work schedules. With these changes have come new marketing opportunities. As women spend more time at work, the traditional duties of the “homemaker” have shifted to day-care centers, nannies, house-cleaning services, and (for those who can afford them) child chauffeurs, birthday-party coordinators, and even family-photo assemblers (Loh, 2003). The number of gyms has mushroomed, the selection of home office furniture has expanded, and McDonald’s has bowed to the wishes of the health-conscious by eliminating its “super-size” option.

Generation Gaps

Clothiers who target teens and young adults (such as Gap and Abercrombie & Fitch) must estimate the size of both current and future audiences. So must companies that specialize in products aimed at customers in other age brackets—say, young children or retirees. Marketers pay particular attention to population shifts because they can have dramatic effects on a consumer base, either increasing or decreasing the number of potential customers.

Marketers tend to assign most Americans born in the last sixty years to one of three groups: the baby-boom generation (those born between 1946 and 1964), Generation X (1965 to 1975), and Generation Y—also known as “echo baby boomers” or “millenniums” (1976 to 2001) (Sincavage, 2004). In addition to age, members of each group tend to share common experiences, values, and attitudes that stay with them as they mature. These values and attitudes have a profound effect on both the products they want and the marketing efforts designed to sell products to them. Let’s look a little more closely at some of the defining characteristics of each group.

Baby Boomers

The huge wave of baby boomers began arriving in 1946, following World War II, and marketers have been catering to them ever since. What are they like? Sociologists have attributed to them such characteristics as “individuality, tolerance, and self-absorption” (Leo, 2003). There are seventy million of them (Neuborne & Kerwin, 2006), and as they marched through life over the course of five decades, marketers crowded the roadside to supply them with toys, clothes, cars, homes, and appliances—whatever they needed at the time. They’re still a major marketing force, but their needs have changed: they’re now the target market for Botox, pharmaceutical products, knee surgery, financial investments, cruises, vacation homes, and retirement communities.

Generation X

Because birth rates had declined by the time the “Gen X” babies first arrived in 1965, this group had just one decade to grow its numbers. Thus, it’s considerably smaller (seventeen million (Neuborne & Kerwin, 1999)) than the baby-boomer group, and it has also borne the brunt of rising divorce rates and the arrival of AIDS. Experts say, however, that they’re diverse, savvy, and pragmatic (Neuborne & Kerwin, 1999) and point out that even though they were once thought of as “slackers,” they actually tend to be self-reliant and successful. At this point in their lives, most are at their peak earning power and affluent enough to make marketers stand up and take notice.

Generation Y

When they became parents, baby boomers delivered a group to rival their own. Born between 1976 and 2001, their sixty million (Neuborn & Kerwin, 1999) children are sometimes called “echo boomers” (because their population boom is a reverberation of the baby boom). They’re still evolving, but they’ve already been assigned some attributes: they’re committed to integrity and honesty, family oriented and close to parents, ethnically diverse and accepting of differences, upbeat and optimistic about the future (although the troubled economy is lessening their optimism), education focused, independent, and goal oriented (Neuborne & Kerwin, 1999; Richardson, 2002; Fernandez-Cruz, 2006). They also seem to be coping fairly well: among today’s teens, arrests, drug use, drunk driving, and school dropout rates are all down (Tulgan & Martin, 2001).

Generation Ys are being courted by carmakers. Global car manufacturers have launched a number of 2012 cars designed to cater to the members of Generation Y (Brauer, 2011). Advertisers are also busy trying to find innovative ways to reach this group, but they’re finding that it’s not easy. Generation Ys grew up with computers and other modes of high technology, and they’re used to doing several things at once—simultaneously watching TV, texting, and playing games on the computer. As a result, they’re quite adept at tuning out ads. Try to reach them through TV ads and they’ll channel-surf right past them or hit their TiVo remotes (Bianco, 2004). You can’t get to them over the Internet because they know all about pop-up blockers. In one desperate attempt to get their attention, an advertiser paid college students fifty cents to view thirty-second ads on their computers (Baker, 2004). Advertisers keep trying, because Generation Y is big enough to wreck a brand by giving it a cold shoulder.

Consumer Behavior

Why did you buy an Apple computer when your friend bought a Dell PC? What information did you collect before making the decision? What factors did you consider when evaluating alternatives? How did you make your final choice? Were you happy with your decision? To design effective strategies, marketers need to find the answers that consumers give to questions such as these. In other words, they try to improve their understanding of consumer behavior —the decision process that individuals go through when purchasing or using products. In Section 9.8.7 “The Buying Process” , we’ll look at the process that buyers go through in choosing one product over another. Then, we’ll explore some factors that influence consumers’ behavior.

The Buying Process

Generally speaking, buyers run through a series of steps in deciding whether to purchase a particular product. Some purchases are made without much thought. You probably don’t think much, for example, about the brand of gasoline you put in your car; you just stop at the most convenient place. Other purchases, however, require considerable thought. For example, you probably spent a lot of time deciding which college to attend. Let’s revisit that decision as a means of examining the five steps that are involved in the consumer buying process and that are summarized in Figure 9.16 “The Buying Process” : need recognition, information search, evaluation, purchase , and postpurchase evaluation .

Figure 9.16 The Buying Process

The Buying Process: Need recognition, Information search, Evaluation, Purchase, Post-purchase evaluation

Need recognition . The process began when you recognized a need to go to college. Perhaps you wanted to prepare for a particular career, to become better educated, or to postpone going to work full time. Maybe your parents insisted.
Information search . Once you recognized the need to go to college, you probably started gathering information about colleges. You may have gone online and studied the Web sites posted by a few schools. Perhaps you attended college fairs or spoke with your high school guidance counselor. You probably talked with friends about your options. Once you let colleges know that you were interested, admissions departments likely sent you tons of information.
Evaluation . At this point, you studied the information you’d gathered. First, you probably decided what you wanted from a college. Perhaps price was your number-one criterion, or maybe distance from home. Maybe size was important, or reputation or available majors. Maybe it was the quality of the football team or the male-to-female ratio.
Purchase . Ultimately you made a “purchase” decision. In so doing, you focused on what was most important to you. Naturally, you could choose only among schools that had accepted you.
Postpurchase evaluation . The buying process didn’t end when you selected a school. It continues today, while you’re using the “product” you purchased. How many times have you rethought your decision? Are you happy with it? Would you make the same choice again?

Understanding the buying process of potential students is crucial to college administrators in developing marketing strategies to attract qualified “buyers.” They’d certainly like to know what information you found useful, which factors most influenced your decision, and how you made your final choice. They’ll also want to know whether you’re happy with your choice. This is the kind of information that colleges are seeking when they solicit feedback, both from students who chose their schools and from those who didn’t.

Influences on Buying Behavior

Did you ever buy something you knew you shouldn’t buy but just couldn’t help yourself—something you simply wanted? Maybe it was a spring-break trip to the Bahamas that you really couldn’t afford. Objectively, you may have made a bad decision, but not all decisions are made on a purely objective basis. Psychological and social influences come into play. Let’s take a closer look at each of these factors.

Psychological Influences

Under this category, we can identify at least five variables:

Motivation . The internal process that causes you to seek certain goals.
Perception . The way you select, organize, and interpret information.
Learning . Knowledge gained through experience and study.
Attitudes . Your predisposition to respond in particular ways because of learned values and beliefs.
Personality . The collection of attributes that characterize an individual.

Social Influences

Here, we find four factors:

Reference groups . Friends or other people with whom you identify.
Economic or social status .
Culture . Your set of accepted values.

It shouldn’t be surprising that marketers are keenly interested in the effect of all these influences on your buying decisions. For instance, suppose the travel agency that sold you your spring-break getaway found that you bought the package because you viewed it as a reward for studying hard and doing well academically. In that case, it might promote student summer-travel programs as rewards for a hard year’s work at school.

Key Takeaways

A number of forces over which it has little or no control affect a company’s marketing activities.
Taken together, they make up its external marketing environment , which includes regulatory and political activity, economic conditions, competitive forces, changes in technology, and social and cultural influences.
Successful marketing often hinges on understanding consumer behavior —the decision process that individuals go through when purchasing or using products.
Several psychological and social variables influence buyers’ decisions. They go through a series of steps in reaching the decision to buy a product: need recognition, information search, evaluation, purchase , and postpurchase evaluation .
Shifts in the external marketing environment often necessitate changes in a company’s marketing plans. All companies are affected by external factors, but certain factors can have a stronger influence on particular products. Which of these five types of external factors—political/regulatory, economic, competitive, technological, social/cultural—would have the greatest impact on each of the following products: a Toll Brothers home, P&G Tide laundry detergent, Apple iPod, Pfizer heart medicine, and Gap jeans. In matching products with external factors, apply each factor only once. Be sure to explain exactly how a given factor might affect product sales.

Experts have ascribed a number of attributes to Generation Y—people born between 1976 and 2001. On a scale of 1 to 10 (with 10 being the highest), indicate the extent to which each of the following attributes applies to you:

Baker, S., “Channeling the Future,” BusinessWeek Online , July 12, 2004, http://www.businessweek.com/magazine/content/04_28/b3891013_mz001.htm (accessed October 21, 2011).

Bianco, A., “The Vanishing Mass Market,” Business Week , July 12, 2004, 61–68.

Brauer, K., “The Best Cars for Generation Y,” CNBC , http://www.cnbc.com/id/41172515/The_Best_Cars_for_Generation_Y (accessed October 21, 2011).

Fernandez-Cruz, M., “Advertising Agencies Target Generation Y,” youngmoney.com , http://www.youngmoney.com/lifestyles/campus_life/031202_01 (accessed May 21, 2006).

Leo, J., “The Good-News Generation,” U.S. News & World Report , November 3, 2003, http://www.usnews.com/usnews/opinion/articles/031103/3john.htm (accessed October 21, 2011).

Loh, S. T., “Nannyhood and Apple Pie,” The Atlantic , October 1, 2003, 122–23.

Neuborne, E., and Kathleen Kerwin, “Generation Y,” BusinessWeek Online , February 15, 1999, http://www.businessweek.com/1999/99_07/b3616001.htm (accessed May 21, 2006).

Richardson, K., “Zell Conference Reveals Next Marketing Wave,” Kellogg World (Kellogg School of Management, Northwestern University, Winter 2002), http://www.kellogg.northwestern.edu/kwo/win02/inbrief/zell.htm (accessed October 21, 2011)

Sincavage, J. R., “The Labor Force and Unemployment: Three Generations of Change,” Monthly Labor Review , June 2004, 34.

Tulgan, B., and Carolyn A. Martin, “Book Excerpt: Managing Generation Y —Part I,” BusinessWeek Online , September 28, 2001, http://www.businessweek.com/smallbiz/content/sep2001/sb20010928_113.htm (accessed October 21, 2011).

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Marketing Environment Explained with Examples

Understanding an organization’s marketing environment is perhaps the most effective way to build long lasting customer relationships. Marketing managers are appointed the task to mold company policies according to the shifting environment.

Table of Contents

What Is a Marketing Environment

Marketing environment deals with the variables or influences of the internal and external environment of an organization. These factors collectively affect the company’s ability to cultivate and maintain strong customer relationships.

Marketing Environment Explained

The marketing environment comprises of two important components. This includes the internal environment and external environment.

Internal Marketing Environment

The internal environment of a firm constitutes of all those factors inside a firm that’ll impact its marketing operations. Some common factors include capital assets, company policies, employees, organizational structure along with its goods and services.

All these factors are under the control of the firm. Experts like to group these factors under the Five M’s of business:

Since the internal environment falls directly under the control of the marketer, it can be changed without altering the external environment.

Your internal office culture that comprises of values and attitudes determines how your employees behave. If an organization emphasizes on teamwork and collaboration opportunities then it is likely to perform better compared to its competitors.

External Marketing Environment

The external environment is made up of factors that cannot be controlled by a firm. However, these factors may heavily influence the motives of marketers while formulating a marketing strategy.

External marketing factors can be categorized into two categories including micro environment factors and macro environment factors.

Micro Environment

Micro environment factors deal with external components that are directly linked to the organization. These factors include the customers, competitors, partners and of course the public. Here are a few important entities that make up an organization’s microenvironment:

Partners: This includes units and separate entities such as market research organization, advertising agencies, brokers, transportation companies etc.
Employees: Skilled and competent employees help an organization grow and boost sales.
Suppliers: Businesses are dependent on their suppliers to deliver goods. They serve as the primary factor when it comes to presenting the finished product.
Customers: The success of the company will undoubtedly depend on its customers. Determining the nature of customers allow marketers to devise appropriate marketing strategies.
Public: It’s the primary duty of an organization to cater to the needs of the public. After, it’s the customers and buyers that hold the power to shift the company towards betterment.

Employees may alter the business environment to a certain extent. Employees that lack motivation or simply aren’t skilled enough may impact sales and will be least interested in making any progress.

Similarly, if the supplier increases the costs of raw material, this may have an impact on the marketing mix strategy of the company. To avoid such instances from happening, companies should focus on establishing a strong relationship with their suppliers to get an edge over their competitors.

Macro Environment

The macro environment focuses on external factors that influence the industry as a whole. In other words, these factors don’t directly influence the business. Some important components of macro environment include:

Demographics: Demographic elements influence different market segments including country, region, age, lifestyle etc.
Economic factors: The decision making processes and organization production of customers are influenced by economic factors such as inflation and so on.
Social cultural factors: Marketers must consider the social and cultural outcomes of their products and services. This is why organizations should ensure their products and services are environmentally friendly.
Technological factors: The organization should focus on the technology and materials used for creating goods and services. This is particularly important for effective business processes.

Marketers can also follow a PESTEL approach to explore external factors that indirectly affect an organization. This approach comes in handy for identifying major opportunities and threats that your business might face in the future.

Examples of macro environment influences include changes in cultural tastes, government regulations, competitors, disastrous weather and changes in interest rates.

Did you enjoy reading our blog post about marketing environment? Check out our other marketing resources for more information.

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Chapter 11: The marketing Environment and marketing analysis

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Consequently, businesses have transformed their marketing techniques to focus on green marketing. Moreover, numerous products have been produced to help conserve the environment. This paper will explore a green product and environment Issues it addresses. It will also explore green marketing techniques used for the promotion of the product (Lozanova, 2010, p. 1).

Over the years, billions of environment-friendly products have been produced. These range from solar products to biodegradable packs. This assignment will explore recycled ink cartridges and toner cartridges. Based on previous research, it is understood that printer cartridges decompose beyond 1000 years. This has raised fears on the growing number of dumping sites for a used cartridge. Green technology has come up with ways of recycling these products with numerous benefits to consumers and the environment (BuyGreen, 2013, p. 1). Firstly, the product saves the environment from over 300 million inkjets and laser cartridges that are usually dumped in landfills in the United States and its surroundings. In this regard, it saves the world from unwanted wastes that pollute the environment and are difficult to decompose. Recycling cartridges also help in saving resources through remanufacturing, which would otherwise be used in conserving the environment. Moreover, it minimizes the dumping of such products in third world countries as has happened in the past. In essence, reuse, recycle and reduce model is desired to reduce the dumping of hazardous wastes.

A number of green marketing techniques have been utilized to market recycled ink cartridges. One technique utilized is through advertising, which has been utilized profoundly to achieve the deliverables of environmental protection. Massive advertising through website portals, social networking sites, newspapers, magazines, and television have been utilized to popularize the product to American society. This has worked to transform their cultural values, which are increasingly inclined to conserve the environment (Lozanova, 2010, p. 1). The second marketing technique is through price control. For instance, the product is remanufactured at a lower cost than new ones. In this regard, marketers give lower prices of up to 30% on new products. This makes the product competitive and makes it easy for consumers to conserve their environment at no extra cost. Moreover, Marketers promise better, if not the same quality as new ones. In essence, marketers appeal to their consumers by explaining the importance of purchasing green products, which are given at a lower price than new ones but with the same quality (Hawkins, Mothersbaugh & Best, 2010).

This product received cause-related marketing in social network sites like Facebook, Twitter. There was a huge response to this product since most consumers could now recycle their ink cartridges instead of dumping as was earlier done. Cause-related marketing was also done to help consumers keep their used cartridges for collection by company representatives who would then take them up for recycling. Also, consumers would expect a discount on recycled cartridges. Marketing on social sites was also paramount for the product. I first saw its promotion on Facebook. Environmentally friendly products have been marketed vigorously in social sites as well as in media (Graham, 2010).

Several reasons made me buy this product. Firstly, I noticed that we needed to conserve our environment to achieve millennium goals. Therefore, although our country never signed the deal to reduce pollution of the environment, most Americans have professed their concern for the environment. This was important in ensuring that I bought the product.

Additionally, the product assured me of quality as a new one with the advantage of going green. This excited me since global warming, and its effects are already plunging the world into various calamities. Going green was, therefore, a good option for me in buying the product. Besides, the product was priced fairly as compared to new cartridges. I would also credit advertising techniques, which appealed greatly to me to buy the product. Essentially, numerous things came into play to convince me to buy the product. However, chief among them were quality, recycling, environmental protection, cost, and advertisement (Yudelson, 2012, p. 1).

Green marketing has changed consumer values in the recent past. Most consumers are currently buying green with the conviction that they are helping conserve the environment. Additionally, some of them have gone out to buy expensive products just to conserve the environment. In essence, green products are appealing to consumers. Besides, the effects of global warming have convinced consumers that they need to conserve their environment. Additionally, vigorous advertisements that range from media to social sites have been successful in drawing consumers to green products. Green products not only provide consumers’ needs but also conserve nature.

BuyGreen (2013). HP Ink and Toner Cartridges . Web.

Graham, J. (2010). Critical thinking in consumer behavior: Cases and experiential exercises (2nd ed.). Boston, MA: Prentice Hall. Print.

Hawkins, D. I., Mothersbaugh, D. L., & Best, R. J. (2010). Consumer behavior: Building marketing strategy (11th ed.). Boston, MA: McGraw Hill. Print.

Lozanova, S. (2010). Four Strategies for Green Marketing . Web.

Yudelson, J. (2012). Green marketing: Future Strategy . Web.

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Analyzing the Marketing Environment

Summary of the chapter.

The chapter begins by explaining why marketing is a critical practice in every business organization. Every company should understand that the customer is important to its success. According to Grewal and Levy (2011), firms should always fulfill the needs of their targeted customers. The chapter goes further to explain why businesses should analyze their competitors’ actions and strategies. Businesses should work with corporate partners to have the best marketing strategy.

The success of every marketer or business organization depends on the existing macro-environment factors. Marketers and manufacturers must be aware of the socio-cultural, political, economic, and technological factors in the targeted society (Grewal & Levy, 2011). This explains why marketers should analyze the demographic patterns of their potential customers. The marketer should use certain factors such as age, market size, ethnicity, religion, and income to identify their targeted customers.

It is ethical for business organizations and marketers to abide by the existing laws. These laws affect marketing strategies directly. Some of these legal frameworks are necessary because they protect the consumer from harmful products (Grewal & Levy, 2011). The chapter goes further to explain why marketers should be aware of the differences existing among different generational cohorts.

According to Grewal and Levy (2011), the marketer should also identify the existing social trends in every given society. Social practices and trends affect what the consumer purchases from the marketer. Some of these social trends include “environmental awareness, privacy concerns, health, and price sensitivity” (Grewal & Levy, 2011, p. 134). The concepts identified in this chapter are meaningful because they can help businesses improve their marketing strategies. These practices will eventually help marketers and businesspeople serve their targeted customers better.

My response to the material

The class readings are meaningful because they have informed me about the best strategies to succeed as a marketer. The first idea from this reading is that the customer is very critical towards the success of every business. The author uses many examples and concepts to inform the reader about the importance of a proper marketing strategy. The chapter presents useful insights and concepts that are applicable in the real business world.

For example, “it is appropriate for a marketer to analyze the macro-environment factors that might affect his or her marketing strategy” (Grewal & Levy, 2011, p. 134). Some of these factors include the economic status of the targeted market or society. It is also important to analyze the political status of the targeted society. It is also necessary for businesses and marketers to analyze the role played by competitors. The strategy will help them design the best marketing strategies. A successful marketer will examine the strengths and weaknesses of his or her competitors and use them to achieve the targeted goals.

I have learned new marketing ideas and concepts from the class readings. For instance, I understand why marketers should identify existing social trends. These trends affect the behaviors of the targeted customers. I have also understood how to discover the unique needs of my customers. This practice will ensure my marketing strategy is successful. It is appropriate for every marketer to study “the strategies of his or her competitors” (Grewal & Levy, 2011, p. 134). Such ideas are useful in the current business world. Businesses can use these concepts to develop the best marketing strategies. I would encourage more marketers to reexamine these concepts and ideas because they can help them serve their targeted customers better. The approach will make their businesses profitable.

Grewal, D., & Levy, M. (2011). Marketing . New York: McGraw Hill.

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Global Marketing Environment

Introduction.

All businesses work in the same environment, which is connected by numerous global forces. Some of them have a direct impact on an organization’s activities, others are passively affected, but all of them have to be considered for marketing to be successful. The aspects of business-customer relations are diverse both in quantity and quality. Understanding which layers the global marketing environment incorporates is essential in ascertaining the importance of their consideration for global marketers.

Definition of Global Marketing Environment

The global marketing environment is the multitude of factors and forces which affect customer relationships. The goal of any business is interaction with clients who require the goods or services produced by an organization. For customer relations to be successful, several factors have to be favorable. The forces that influence business decisions are multivariate and depend on the size of an organization, as well as the target audience.

The larger the scope of a business is the more external factors influence it. If a company does not extend its operations beyond a certain area, then all focus is placed on the local environment. Similarly, a multinational corporation has to consider global issues because they have an immediate effect on the organization. In both cases, the forces, which compel companies to pursue a particular course of action with customers, constitute the marketing environment.

Internal Layer

The first layer of marketing environment factors is the internal one. It comprises aspects that are directly controlled by the organization. Management can change, alter, or eliminate them if they deem it necessary. The main characteristic of these aspects is that they are not shaped by outside forces or influences. All decisions are made from within the business; thus, the layer is named internal.

The variables of the internal layer include strategy, structure, processes, and resources. The strategy is the overall plan of how a business approaches its customers. The chosen direction determines the structure that is necessary for promoting products. The processes incorporate the actual steps taken to reach customers. Finally, any initiative relies on resources at the organization’s disposal. All these variables are controlled by management without any influence from outside forces.

External Layer

The external layer is the most multifaceted because it incorporates a broad range of outside forces impacting the business’ marketing activities. The layer is divided into two sublayers – macro and micro. The microenvironment represents variables that can be influenced by an organization that does not control them. For instance, suppliers, distributors, customers, competitors, and other stakeholders are all relevant in marketing decision-making. Business managers can affect them, but they exist regardless of the organization’s input.

The opposite is true in regards to the macro environment, which is entirely independent of the organization’s actions[UU1]. Nevertheless, all these factors should be considered by marketers because they determine the context within which the business functions. For example, the existing political system may prohibit some actions and allow others, thus forcing the company to adjust its marketing accordingly. In the same manner, both domestic and international laws determine the legal restrictions concerning marketing endeavors.

Among other macro-environmental variables are the economic aspects surrounding the region in which a company operates. They include the degree of planning in the economy, specifics of trade rules, and relations between the business’ country and those that host the organization’s affiliates. One more important variable is socio-cultural differences as some marketing practices may be seen as inappropriate and prohibited in other nations. Technological advancement should also be considered since business activities involving customers can be hinged by the lack of sufficient equipment in a hosting country. Overall, all macro and micro-environmental factors constitute the external layer, which is largely uncontrolled by the management of the organization.

Global Social Issues

The final layer consists of factors that influence the world at large. It is a natural continuation of the external layer in terms of the organization’s input. The difference is that micro and macro variables are specific to a region within which the business operates. Global issues are relevant irrespective of the geographical location of the organization. Their impact may be passive, but it is felt throughout society.

Global variables include climate change, ethics, migration, and other forces which extend beyond a single region or a group of people. For instance, global warming forces governments to adopt environmentally friendly policies. In their turn, such regulations oblige companies to follow specific standards, which are subsequently relayed through corporate marketing. Similarly, migration causes ethnic diversity to rise. Companies have to correct their promotional materials to cater to minorities and foreigners in the targeted area.

The aforementioned issues are widely known because of extensive media coverage. It also means that marketing heavily relies on global problems to promote products, raise the corporate image, and attract customer interest. The more globalized a company is, the more directly worldwide issues impact such business. As enterprises become more powerful, the expectation of their global awareness also rises. Firms are supposed to function concerning their corporate social responsibility and take steps to resolve worldwide problems.

Importance of Marketing Variables

All layers of the global marketing environment are involved in the competition between businesses. Organizations have to understand that all variables give marketing advantages and disadvantages. Some factors may increase the risk of failure, whereas others can set the groundwork for success. Marketing is built on small details, which vary from region to region and from customer to customer. The ability to recognize the environment and decide what the correct course of action will be is the distinguishing trait of an efficient marketer.

In practice, by evaluating the variables, enterprisers can assess the risk of working with customers. Based on the analysis, management devises a business strategy, which may be flawed if variables are interpreted incorrectly. At the same time, a sensible assessment of variables will help the organization save time and resources, which would be lost without the analysis of the marketing environment. Therefore, evaluation of variables is essential in conducting business and should be approached with respective attention and thoroughness.

Altogether, it should be evident that the complexity of the global marketing environment is justified by the abundance of variables that influence marketing decisions. Each layer has factors that should be considered by marketers. The more global the scope of the variables is, the less control over them management has. The internal layer consists of factors, which are managed from within the organization, the external layer has more independent regional forces, and global issues influence the entire society. All variables are crucial because they reduce the business’ risk of marketing failure.

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According to (2007) it states that the market environment is a marketing term and refers to factors and forces that affect a firm’s ability to build and maintain successful relationships with customers. Factors such as social that deals with people’s values, demographic people’s age and race, economic factor such as income and inflation and technological factor such as production and product quality all affects Nikes marketing environment. Nike as a company is a very successful business but every business has certain things that may affect their brand or organisation. Some things can affect a company in a good way and some in a bad way. Nike has been around for around four decades and has changed its style every decade but never their target market. Nike has a demographic of men, women, and children. Nikes competitors are Puma, New balance and Adidas. Adidas have currently branched out into more footwear products and are getting more popular every second. It is important that Nike is aware of this so they can continue their competitive advantage over them. Whereas if this were to change and Adidas becomes the top of the chain it would make a huge disadvantage change to Nike organisation as a whole. Nike and Apple announced a partnership bringing the worlds of sports and music together like never before with the launch of innovative Nike+iPod products. This affects Nikes brand in a positive way as they show that they are able to collaborate and design new product for customers in order to create the best for the new generation. Anti-globalization groups took campaigns against Nike. Targeted by campaigners because it is the world’s best-selling brand and because initially it denied responsibility for any malpractice that may be taking place in its sub-contractor factories using sweatshops to produce footwear and causing child labour. This affected society as that government laws and regulations differ from country to country and this makes manufacturing of products very difficult challenge for the international companies like Nike these kinds of instances show that Nike has limited control over its contract manufacturers and could damage the company’s reputation. Intermediaries are the companies like JD, Footlocker, Office, Schuh and Amazon that sell Nike footwear they help Nike as if customers cannot get to a Nike store or it is sold out in the Nike store, they are then able to purchase the trainers from an intermediary. This is also available online.

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25 Important Marketing Environment Questions and Answers [Notes with PDF]

The second chapter of our marketing learning course is “ Marketing Environment”. In this article, we’ll learn the 25 most important marketing environment questions and their answers.

If you read every question and its answers carefully, you will be able to prepare for the marketing course in a very good way.

You can read the first chapter of our free “ Marketing learning course ” here if you missed it.

30 Important Introduction to Marketing Questions and answers [Notes with PDF]

By reading this post, you may quickly prepare for any competitive tests such as school and college exams, vivas, job interviews, and so on.

So let’s get started…

Marketing Environment Questions and Answers:

The following are the 25 important marketing environment questions and answers:

Question 01: What is the environment?

Answer: The surrounding conditions, elements, or forces of a place or region in which people live and an organization is engaged in achieving its objectives are referred to as the environment.

On the one hand, there are natural elements such as topography, climate, rivers, hills, mountains, and forests, among others.

On the other hand, unnatural elements such as education-culture, science-technology, law, economy, religious beliefs, politics, and so on exist.

In a nutshell, the environment refers to all of the natural, social, and economic elements that surround man and are necessary for his survival.

Question 02: What is the concept of a “marketing environment”?

Answer: External and potential forces and entities that influence the marketing of products, services, or ideas are referred to as marketing environments.

The marketing environment includes factors such as buyers, sellers, suppliers, people, the country’s social, cultural, and political conditions, and so on that influence marketing activities.

That is, the marketing environment is comprised of a variety of external factors and forces that affect marketing management’s ability to build and maintain successful relationships with the intended consumers.

Question 03: What is the relationship between the environment and the marketing environment?

Answer: The environment encompasses the soil, air, plants, animals, rivers, moon, sun, human behavior, race, religion, education, language, culture, government, a system of governance, and so on that surround us.

In contrast, the marketing environment is regarded as a component of the overall environment.

An organization’s marketing environment consists of the elements that influence product marketing.

On the other hand, the natural environment, such as soil, air, rivers, and so on, affects the marketing environment; on the other hand, the unnatural environment, such as buyers, sellers, the country’s social, cultural, and political conditions, technology, and so on, affects the marketing environment.

Because the marketing environment is a component of the overall environment, it is greatly influenced by it and has a close relationship with it.

Question 04: Why is it important to study the marketing environment?

Answer: The following are the benefits of studying marketing:

Recognizing and anticipating business trends
Recognizing threats and opportunities
Long-term planning
Keeping up with the competition
Recognizing Changes
Situational adaptation
Gathering information
Immediate assessment of the situation
Recognizing one’s own strengths and weaknesses
Establishing guidelines
Foreseeing problems
Marketing and Society

Question 05: What are the types of marketing environments?

Answer: The types of marketing environment are as follows:

Micro Environment
Intermediaries
Competitors

2. Macro Environment

Demographic
Technological

Question 06: What is the micro-environment?

Answer: The micro-environment consists of the controllable aspects, strengths, and elements of the marketing environment.

The controllable parties, energy, and material that directly affect the marketing activities are called micro-environments.

Such aspects of the environment, energy, and surrounding elements directly influence marketing operations. In this case, the behavior of the smallest elements of the marketing environment and their functions are discussed separately.

That is, the micro-environment includes all of the forces that are closely associated with the company and have an impact on its customer services capacity, such as suppliers, marketing intermediaries, buyer markets, competitors, and the population.

Question 07: Why is the micro-marketing environment controllable?

Answer: The micro marketing environment refers to the controllable parties, energy, and materials that have a direct impact on marketing activities.

Companies, suppliers, intermediaries, buyers, competitors, populations, and so on are all components of a micro-marketing environment.

These environmental elements are under the marketer’s direct or indirect control. For example, the company has direct control over all departments and surfaces.

Furthermore, direct control can be imposed on any of the other elements, as well as indirect control on any of them. As a result, the micro-marketing environment can be said to be under the control of direct or indirect marketers.

Question 08: What is the macro-environment?

Answer: All elements of the macro marketing environment are driven by external and uncontrollable forces. The overall environment can create both risks and opportunities for the company.

Therefore, the macro environment is the combined effect of uncontrollable energy that indirectly affects marketing activities.

That is, the macro environment is made up of the forces that influence the micro-environment from the largest society, the population, economic, natural, technological, political, and cultural forces.

Question 09: What are the elements of the micro-environment?

Answer: The elements of the micro-environment are as follows:

Question 10: What are the elements of the macro-environment?

Answer: The elements of the macro-environment are as follows:

Demographic environment
Economic environment
Natural environment
Technological environment
Political and social environment
Cultural environment

Question 11: Why are the elements of the macro environment uncontrollable?

Answer: The term “macro environment” refers to the uncontrollable energy that has an indirect impact on marketing activities.

Demography, the economy, nature, technology, politics, society, culture, and so on are examples of macro-environmental elements. Some of these elements are God-given, while others are man-made.

The marketer cannot, under any circumstances, control the ingredients alone. Although some aspects of the macro environment may be affected collectively, it is not possible for the marketer to do so alone.

As a result, the macro environment of marketing is uncontrollable.

Question 12: How does the environment affect marketing?

Answer: The environment has an impact on marketing functions both directly and indirectly. The surrounding conditions, elements, or forces of a place or region in which people live and an organization is engaged in achieving its objectives are referred to as the environment.

Market research, purchasing, selling, transportation, warehousing, advertising, and other marketing activities are examples of marketing activities.

The environment has a significant impact on each of these jobs.

As an illustration. Marketing activities in the hilly, desert, and plain areas will never be the same. Again, the marketing functions of the economically developed world and the economically underdeveloped world must be distinct.

That is to say, the environment has an impact on every marketing act.

Question 13: What impact do competitors have on product marketing?

Answer: Competitors are those who have an impact on an organization’s marketing activities by offering similar products or services.

Marketing is heavily influenced by competitive products. The competitor attempts to create a positive attitude toward their products among buyers through various activities such as quality, price, advertisement, sales promotion, and so on.

Buyers are drawn to competitive products as a result of this. Adopt marketing strategies that take into account your competitors’ current and potential strengths, abilities, and weaknesses.

Question 14: How does the company influence marketing?

Answer: A company is a legal entity made up of a few people. A company has various departments. Purchase departments, sales departments, manufacturing departments, finance departments, R&D departments, accounting departments, marketing departments, and so on.

The work efficiency of these interdependent departments is critical to the company’s efficiency and reputation.

The activities of all these departments are controlled by the top management. Top management determines the company’s goal-objective strategy and policy.

According to the decision of the top management , the marketing department prepares the plan and arranges it for its implementation.

Marketing is one of the most important parts of the company. The functions of the marketing department are conducted with the help of other departments.

This department tries to increase the sales of the product and gives necessary advice to the production department to improve the quality of the product.

The job of the research and development department is to improve the quality of existing products and create new products.

This work is done through effective communication with the production department.

The purchasing department arranges for the supply of the necessary materials to the company.

The finance department arranges the necessary funds. The job of the accounting department is to calculate the cost and profit loss.

In this way, all the departments of a company help in implementing the plans and activities of the marketing department

The company’s microenvironment is formed by the dedication and work coordination of the employees in the relevant department.

Question 15: How does the supplier influence marketing?

Answer: Various materials are required for the company’s smooth operation. Suppliers are individuals or organizations who provide all of the materials for the company.

Failure to deliver required materials on time disrupts operations and tarnishes the company’s reputation.

This is why marketing skills depend on the activities of suppliers. The company can determine the supplier as required.

Marketers can exert control over the environment by working with a variety of suppliers.

Question 16: How do the intermediaries influence marketing?

Answer: Intermediaries are individuals or organizations that deliver the company’s products to the final consumer or users.

For example, wholesalers, retailers, distributors, representatives, etc.

The smooth operation of intermediaries is important to the sale of goods. Intermediaries must be recruited and motivated in order to significantly expand the product market.

Product marketing is carried out by various types of intermediaries.

The company’s marketing skills depend on their cooperation. Therefore, in determining the middlemen, it is necessary to consider their efficiency, cost, quality of services provided, etc.

This is because their activities greatly influence the structure of the company’s work environment.

Question 17: How do the competitors influence marketing?

Answer: Competitors are business rivals who usually offer similar products or services.

That is to say, the marketing activities of an organization that are influenced by other similar products or service offers are called competitors.

Competing companies try to sell products to similar buyers. The company has to deal with different types of competitors.

The marketers must contend with competitors.

To survive in the competition, the marketer must identify the competitors, understand their strategies, and tailor his own strategy accordingly.

Because the organization’s success is dependent on using a marketing strategy that is consistent with the competitors.

The marketing activities of the company depend on the number, type, and activities of the competitors.

Question 18: How do People influence Marketing?

Answer: People are individuals who have a direct impact on the operations of the company.

For example, the financial population, media population, government population, civic activities population, local population, general population, and internal population.

Certain populations can help a company achieve its objectives faster. If the people do not assist, the company’s operations are adversely affected.

The attitude of the people and the buyers have to be taken into consideration while formulating the marketing plan of the company.

Companies can expect feedback from specific populations.

The company must establish and maintain positive relationships with these communities in order to create a favorable environment.

Question 19: How does the customer influence marketing?

Answer: A customer is a person or organization that buys goods or services from a store or business organization. So the marketing organization has to know the details about the customers.

There are different types of customers in the market and their buying behavior is different.

As a result, the marketer has to adapt the marketing activities according to the characteristics of the buyer’s market.

For example, consumers purchase goods or services for personal or family consumption, and business buyers purchase goods or services for reprocessing or use in the manufacturing process.

Reseller market buyers purchase goods or services for profit through resale, government market buyers purchase goods or services for the purpose of maintaining public service activities or transferring them to others.

On the other hand, buyers in the international market are foreign consumers, producers, resellers, or the government.

Each of the mentioned markets has specific characteristics through which marketing activities are affected. These are marketing responsibilities that need to be carefully considered.

Question 20: How does the demographic environment influence marketing?

Answer: Demographic environment is the most important consideration for a marketer, as the marketer conducts all activities by involving the people.

Moreover, people are the main component of the market for goods or services. As one of the elements of the environment, population influences marketing.

Population size, density, age, religion, caste, occupation, etc. are the elements of this environment.

The elements of the demographic environment that influence the marketing of goods and services are:

Changes in the age structure of the population
Family lifestyle changes
Changes in the geographical location of the population.
Impact of education and profession
Increase diversity

Question 21: How does the economic environment influence marketing?

Answer: The economic environment is the sum of the external factors that affect the purchasing power of consumers and the type of expenditure on a country’s economy.

The elements of the economic environment have an impact on the purchasing power of the consumer and the type of expenditure.

So the marketer has to keep an eye on the consumption trend of consumers in his country and world market and the type of expenditure.

The two things that marketers need to keep an eye on are:

Changes in consumer income and
Changes in the type of consumer spending

Lately, there has been a change in the economic components. For example, economic factors have greatly changed people’s income, living expenses, interest rates, types of savings and loans, marketplace, and so on. Companies focus on these elements for economic forecasting.

Question 22: How does the natural environment influence marketing?

Answer: The natural environment is the environment that is formed by various natural elements such as rivers, canals, seas, mountains, climate, topography, etc.

Consumer awareness of the natural environment has greatly increased. Water pollution levels in many cities around the world have reached alarming proportions.

Countries around the world have become aware of global warming and environmentalists are also vocal about its dire consequences.

This is why marketers need to know about the three types of trends in the natural environment. These are:

Shortage of raw materials,
Levels of environmental pollution and
Government intervention

Question 23: How does the technological environment influence marketing?

Answer: The technological environment is the result of combining science and technical education, related research, advanced technology use, technology import opportunities, and so on.

The use of technology affects the marketing environment. The forces of innovation in new technologies, the creation of new products and markets and opportunities, etc. have an impact on the marketing environment.

However, the technological environment is changing rapidly. New technology creates new markets and opportunities.

Every new technology removes the old technology from the market. So the marketer should get used to the technical environment and monitor it closely.

Companies that can’t keep up with the technological environment see their products quickly become obsolete.

Question 24: How does the Political and Social environment influence marketing?

Answer: The political and social environment is made up of the activities of various government agencies and social interest groups that influence marketing activities.

The political environment includes factors such as government stability, political ideology, vision, policies, and programs, transparency, accountability, people’s political thinking, and the country’s law and order situation, among others.

The political situation has a significant impact on marketing activities. Marketers must be aware of the various laws and ordinances that govern their industry, and they must conduct their marketing activities in an ethical and socially responsible manner.

Question 25: What is the difference between Micro-environment and Macro environment?

Answer: The 3 most important differences between Micro-environment and Macro environment are as follows:

The elements of the micro-environment are companies, suppliers, marketing intermediaries, buyers, competitors, and the population. On the other hand, the elements of the macro-environment are economic, natural, technological, political, and cultural.
The elements of the micro-environment directly affect the marketing activities, while the elements of the macro environment indirectly affect the marketing activities.
The scope of the micro-environment is very small, while the scope of the macro-environment is very wide.

I hope that by the end of this post, you have a good understanding of the “Marketing Environment” chapter. If you have any doubts or questions, don’t hesitate to contact us or leave a comment so that we can respond soon.

You can also read:

35 Important Functions of Marketing Questions and Answers [With PDF]
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3 thoughts on “25 Important Marketing Environment Questions and Answers [Notes with PDF]”

Great quiz it helps you understand the unit well

Was helpful to me in my career as a marketer Thanks alot

Having read this, I thought it was very informative. I appreciate you spending some time and energy to put this information together. It was still worth it!

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Cost of living help and a future made in Australia

Investing in a future made in australia.

Investing in a Future Made in Australia and the skills to make it a reality

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Attracting investment in key industries

Making Australians the beneficiaries of change

A Future Made in Australia is about creating new jobs and opportunities for every part of our country by maximising the economic and industrial benefits of the move to net zero and securing Australia’s place in a changing global economic and strategic landscape.

The Government’s $22.7 billion Future Made in Australia package will help facilitate the private sector investment required for Australia to be an indispensable part of the global economy.

For more information refer to the Future Made in Australia fact sheet [PDF 438KB]

Better deploying capital in priority areas

The Future Made in Australia package will realise Australia’s potential to become a renewable energy superpower, value‑add to our resources and strengthen economic security by better attracting and enabling investment in priority areas. The Government will create a Future Made in Australia Act and establish a National Interest Framework that identifies priority industries and ensures investments associated with them are responsible and targeted.

The Framework will have a focus on industries that contribute to the net zero transformation where Australia has a comparative advantage, and where Australia has national interest imperatives related to economic resilience and security.

Strengthening and streamlining approvals

This Budget provides a faster pathway to better decisions on environmental, energy, planning, cultural heritage and foreign investment approvals.

This includes:

$134.2 million to better prioritise approvals for renewable energy projects of national significance, and support faster decisions on environment, cultural heritage and planning approvals.
Working with the states and territories through the Energy and Climate Change Ministerial Council to accelerate electricity grid connections.
$20.7 million to improve engagement with communities impacted by the energy transition and accelerate the delivery of key energy projects.
$15.7 million to strengthen scrutiny of high‑risk foreign investment proposals, enhance monitoring and enforcement activities and support faster decisions.

The Government will also encourage foreign investment by providing refunds of 75 per cent of application fees for unsuccessful competitive bids.

Promoting sustainable finance

The Government is committing $17.3 million to mobilise private sector investment in sustainable activities. This includes extending Australia’s sustainable finance taxonomy to the agriculture sector and developing a labelling regime for financial products marketed as sustainable.

The Government will also examine opportunities to improve data quality and provide $1.3 million to develop and issue guidance for best practice transition plans.

Making Australia a renewable energy superpower

Powering australia with cheaper, cleaner, more reliable energy.

Australia’s potential to produce abundant renewable energy is a powerful source of comparative advantage. To realise this, the Government is unlocking more than $65 billion of investment in renewable capacity through the Capacity Investment Scheme by 2030.

This Budget helps Australians benefit from cheaper, cleaner energy sooner by investing $27.7 million to integrate consumer energy resources like batteries and solar into the grid.

The New Vehicle Efficiency Standard will save Australians around $95 billion at the bowser by 2050 and reduce transport emissions.

Unlocking investment in net zero industries and jobs

This Budget accelerates growth of new industries by establishing the $1.7 billion Future Made in Australia Innovation Fund and delivering a 10‑year extension of funding to the Australian Renewable Energy Agency. It also delivers the $44.4 million Energy Industry Jobs Plan and $134.2 million for skills and employment support in key regions.

The Future Made in Australia package establishes time‑limited incentives to invest in new industries. The Hydrogen Production Tax Incentive will make Australia’s pipeline of hydrogen projects commercial sooner, at an estimated cost of $6.7 billion over the decade. This Budget also expands the Hydrogen Headstart program by $1.3 billion.

Boosting demand for Australia’s green exports

The Government is making it easier for businesses and trading partners to source low‑emissions products by building better markets and product standards for green products.

This Budget provides $32.2 million to fast‑track the initial phase of the Guarantee of Origin scheme, focused on renewable hydrogen, and bring forward the expansion of the scheme to accredit the emissions content of green metals and low‑carbon liquid fuels. The Government is also working closely with trading partners to identify opportunities to drive greater supply chain transparency and better market recognition of high environmental, social and governance standards in the critical minerals sector.

Realising the opportunities of the net zero transformation

Australia is committed to reaching net zero greenhouse gas emissions by 2050 and is developing six sector plans covering:

electricity and energy
agriculture and land
the built environment.

This Budget continues investment in effective emissions abatement, including through $63.8 million to support emissions reduction efforts in the agriculture and land sector.

The Government is also investing $399 million to establish the Net Zero Economy Authority and support the economy‑wide net zero transformation. This Budget also invests an additional $48 million in reforms to the Australian Carbon Credit Unit scheme and $20.7 million to improve community engagement.

Strengthening resources and economic security

Backing a strong resources sector.

The Government is investing $8.8 billion over the decade to add more value to our resources and strengthen critical minerals supply chains. This Budget establishes a production tax incentive for processing and refining critical minerals at an estimated cost of $7 billion over the decade. It commits up to $1.2 billion in strategic critical minerals projects through the Critical Minerals Facility and the Northern Australia Infrastructure Facility, and pre‑feasibility studies for common user precincts.

This is in addition to $566.1 million to support Geoscience Australia to map all of Australia’s critical minerals, strategic materials, groundwater and other resources essential for the transition to net zero.

Manufacturing clean energy technologies

The Government is committing $1.5 billion to manufacturing clean energy technologies, including the $1 billion Solar Sunshot and $523.2 million Battery Breakthrough Initiative. These investments will be delivered by ARENA.

Strengthening supply chains

To support the delivery of the 82 per cent renewable energy target, the Government has formed the National Renewable Energy Supply Chain Action Plan with states and territories. The Government will invest an additional $14.3 million working with trade partners to support global rules on unfair trade practices and to negotiate benchmarks for trade in high quality critical minerals.

Digital, science and innovation

Investing in new technologies and capabilities.

The Government is investing $466.4 million to partner with PsiQuantum and the Queensland Government to build the world’s first commercial‑scale quantum computer in Brisbane.

The Government will undertake a strategic examination of Australia’s research and development (R&D) system with $38.2 million invested in a range of science, technology, engineering, and maths programs.

The Government is providing $448.7 million to partner with the United States in the Landsat Next satellite program to provide access to critical data to monitor the earth’s climate, agricultural production, and natural disasters.

Modernising and digitising industries

This Budget commits $288.1 million to support Australia’s Digital ID System. A National Robotics Strategy will also be released to promote the responsible production and adoption of robotics and automation technologies for advanced manufacturing in Australia.

Reforming tertiary education

The Government is committing $1.6 billion over 5 years, and an additional $2.7 billion from 2028–29 to 2034–35 to reform the tertiary education system and deliver Australia's future workforce.

This includes $1.1 billion for reforms to university funding and tertiary system governance.

Over $500 million will be provided for skills and training in priority industries and to support women’s participation in these sectors.

The Government will set a tertiary attainment target of 80 per cent of the working‑age population by 2050.

Supporting students on placements

The Government will establish Commonwealth Prac Payments (CPP) for students undertaking mandatory placements. From 1 July 2025, the payment will provide more than 73,000 eligible students, including teachers, nurses, midwives and social workers with $319.50 per week during their placements.

Felicity is a full‑time student receiving Youth Allowance, living by herself. She is studying a Bachelor of Nursing and must stop paid work during her mandatory prac placement. During her prac, Felicity receives $712.05 per week from the Government including: $319.50 of CPP, $285.55 of Youth Allowance (YA), $103.50 of Commonwealth Rent Assistance (CRA) and $3.50 of Energy Supplement.

Felicity receives $351.55 a week more than she would have in 2023 before indexation and the changes to YA, CRA and CPP in the current and 2023–24 Budget

Broadening access to university

From January 2026, needs‑based funding will provide per student funding contributions for under‑represented students. The Government will also provide $350.3 million to fully fund university enabling courses and increase pathways for prospective students to university.

Skills pipeline for priority industries

Skills and training for Future Made in Australia industries

The Government will expand eligibility to the New Energy Apprenticeships Program to include work in the clean energy sector, including in construction and advanced manufacturing. This will provide access to $10,000 incentive payments and support our target of 10,000 new energy apprentices.

The Government will commit $30 million to turbocharge the VET teaching workforce for clean energy courses and $50 million to upgrade and expand clean energy training facilities.

The Government will invest $55.6 million to establish the Building Women’s Careers program to support women’s participation in key industries including clean energy and advanced manufacturing.

Supporting apprentices and building the construction workforce

The $5,000 support payments to apprentices in priority occupations will be maintained for another 12 months to 1 July 2025, up from $3,000 in the absence of any changes. Employers of these apprentices will receive a $5,000 hiring incentive, up from $4,000 in the absence of changes. This will provide certainty to apprentices while the Strategic Review of the Apprenticeship Incentive System is underway.

The Government will also invest $88.8 million to deliver 20,000 new fee‑free TAFE places including pre‑apprenticeships in courses relevant to the construction sector. The Government will provide $1.8 million to deliver streamlined skills assessments for around 1,900 migrants from comparable countries to work in Australia’s housing construction industry.

Strengthening our defence industry capability

An integrated and focused approach to defending Australia

The Government is investing an additional $50.3 billion over ten years to implement the 2024 National Defence Strategy to meet Australia’s strategic needs.

Overall funding for Defence will reach $765 billion over the decade. Defence’s Integrated Investment Program has been rebuilt to create a focused Australian Defence Force, accelerate delivery of priority capabilities, and provide certainty to grow Australia’s defence industry. This includes funding for the Royal Australian Navy’s surface combatant fleet and establishing a guided weapons and explosive ordnance manufacturing capability earlier.

The Government is reforming Defence’s budget to support the National Defence Strategy and delivery of priority capabilities.

Developing defence industry and skills

Industry development grants funding of $165.7 million will also help businesses to scale up and deliver the Sovereign Defence Industrial Priorities, which include continuous naval shipbuilding and sustainment, and development and integration of autonomous systems.

The Government is providing $101.8 million to attract and retain the skilled industrial workforce to support Australian shipbuilding and delivery of conventionally armed, nuclear powered submarines. This includes a pilot apprenticeship program in shipbuilding trades and technologies.

Investing in civil maritime capabilities

The Government is providing $123.8 million to maintain and enhance civil maritime security capabilities. This includes $71.2 million to increase the Australian Border Force’s on‑water response and aerial surveillance capabilities.

Securing Australia’s place in the world

Strengthening relationships and simplifying trade

A stable, prosperous and resilient Pacific region

The Government is delivering over $2 billion in development assistance to the Pacific in 2024–25. This includes the Australia‑Tuvalu Falepili Union.

Investing in our relationship with Southeast Asia

Following the launch of Australia’s Southeast Asia Economic Strategy to 2040, the Government is committing $505.9 million to deepen ties with the region.

Australia recently celebrated 50 years of partnership with the Association of Southeast Asian Nations (ASEAN). At the ASEAN‑Australia Special Summit, the Government announced a range of new and expanded initiatives, including a $2 billion Southeast Asia Investment Financing Facility to boost Australian trade and investment.

Simplifying trade

The Government will abolish 457 nuisance tariffs from 1 July 2024, streamlining $8.5 billion in annual trade and eliminating tariffs on goods such as toothbrushes, fridges, dishwashers, clothing and sanitary products.

The Government will provide $29.9 million to coordinate trade simplification and deliver the Digital Trade Accelerator program, and $10.9 million to enhance the Go Global Toolkit to support exporters.

The Government is expanding the Australia‑India Business Exchange, diversifying trade and helping more Australian businesses build commercial ties with India and across South Asia. There will be $2 million to support Australian agricultural exporters entering the Chinese markets.

Support for small businesses

Helping small businesses

This Budget’s Small Business Statement reaffirms the Government’s commitment to deliver a better deal for small businesses, with $641.4 million in targeted support.

For more information refer to the small business fact sheet [PDF 0.98MB]

Improving cash flow

The Government is providing $290 million to extend the $20,000 instant asset write‑off for 12 months. There will be $25.3 million to improve payment times to small businesses and $23.3 million to increase eInvoicing adoption.

Easing cost pressures and reducing the administrative burden

This Budget provides $3.5 billion of energy bill relief, including rebates of $325 to around one million small businesses.

The Government is reducing the administrative burden for small business by abolishing 457 nuisance tariffs and delivering $10 million to provide additional support for small business employers administering the Paid Parental Leave scheme.

Supporting confidence and resilience in the small business sector

This Budget invests a further $10.8 million in tailored, free and confidential financial and mental wellbeing supports for small business owners.

The Government is providing $20.5 million to the Fair Work Ombudsman to help small businesses understand and comply with recent workplace relations changes.

There will be $3 million to implement the Government’s response to the Review of the Franchising Code of Conduct, including remaking and enhancing the Code, and an additional $2.6 million to support more small businesses through alternative dispute resolution.

A more resilient Australia

Preparing for the future

The Government is preparing Australia for future droughts and heightened risk of natural disasters.

Disaster resilience and preparedness

The Government will provide $138.7 million to improve Australia’s response and resilience to natural hazards and disasters. Support includes: funding for the National Emergency Management Agency to supply communities with vital goods, equipment, and temporary accommodation during an emergency, aerial firefighting capability, and mental health support. This is in addition to the $11.4 billion previously committed for Disaster Recovery Funding Arrangements for the states and territories.

The Government is establishing a pilot program for Australia’s Strategic Fleet. These vessels will improve Australia’s capacity to respond and support communities and supply chains during crises.

Preparing for drought and climate change

This Budget provides $174.6 million from the National Water Grid Fund to deliver new water infrastructure projects that will enhance water security, boost agricultural production and help drought proof regional communities.

The Government will provide $519.1 million from its Future Drought Fund to help farmers and rural communities manage the impacts of climate change and prepare for future droughts.

This investment will build the drought resilience of more farmers like Victorian cropper Ed Rickard.

The Fund supported Ed in developing a better farm business plan, which identified his need for weather stations and soil moisture probes. It also helped him implement a succession plan that ensured his farm’s long-term viability.

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Marketing Environment
1. Internal environment. The internal environment is formed of all the internal factors and forces of an organization. The internal environment of an organization is within the control of the marketer, and he can change or modify the environment as per the demand in the market and requirement of the business.
Marketing Environment, Essay Example
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Marketing Environment: Explanation, Components, & Importance
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1.3 Factors Comprising and Affecting the Marketing Environment
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These forces make up a company's external marketing environment, which, as you can see in Figure 9.14 "The Marketing Environment", we can divide into five sets of factors: Political and regulatory. Economic. Competitive. Technological. Social and cultural. Figure 9.14 The Marketing Environment.
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Marketing environment
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Marketing Environment Products posses a limited lifespan that comprises of four distinct stages of development with each of the development stages presenting its own unique opportunities as well as constraints. This is what is termed as the product life cycle which will be discussed with examples from the healthcare industry. This involves the initial presentation of a particular product into ...
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The chapter presents useful insights and concepts that are applicable in the real business world. For example, "it is appropriate for a marketer to analyze the macro-environment factors that might affect his or her marketing strategy" (Grewal & Levy, 2011, p. 134). Some of these factors include the economic status of the targeted market or ...
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Marketing Environment – Definition, Types, Importance and Examples

What is the marketing environment?

Components of the marketing environment

1. Internal environment

2. External Marketing environment

A. Microenvironment

6. Competitors

B. Macro Environment

Examples of the marketing environment

Examples of the external marketing environment

Importance of marketing environment

1. To learn about your competitors:

2. To learn about your customers:

3. Necessary for future planning

4. To make most out of the latest trends

5. To learn about all the threats and opportunities related to business

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Marketing Environment: Explanation, Components, & Importance

What Is Marketing Environment?

What Are The Components Of Marketing Environment?

Internal Environment

External Environment

Micro Environment

Macro Environment

Demographic Environment

Economic Environment

Physical Environment

Technological Environment

Political-Legal Environment

Social-Cultural Environment

Importance of Marketing Environment

Essential for planning

Understanding Customers

Tapping Trends

Threats and Opportunities

Understanding the Competitors

Features Of Marketing Environment

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1.3 Factors Comprising and Affecting the Marketing Environment

The Marketing Environment Defined

The Components of the Marketing Environment

Components of the Internal Environment

Components of the External Environment

Components of the Macroenvironment

Knowledge Check

9.8 The Marketing Environment

The Political and Regulatory Environment

The Economic Environment

The Competitive Environment

The Technological Environment

The Social and Cultural Environment

Generation Gaps

Baby Boomers

Generation X

Generation Y

Consumer Behavior

The Buying Process

Influences on Buying Behavior

Psychological Influences

Social Influences

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Marketing Environment Explained with Examples

What Is a Marketing Environment

Marketing Environment Explained

Internal Marketing Environment

External Marketing Environment

Micro Environment

Macro Environment

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