Marketing Environment

PRINCIPLES OF MARKETING
Quarter 1 - Module 7
The Marketing Environment
What’s New
Marketing Environment refers to all internal and external factors, which directly
influence the organization’s decisions related to marketing activities. It comprises of
Microenvironment and Macroenvironment.
Micro environment refers to the environment, which is closely linked to the
organization, and directly affects organizational activities. It consists of six
forces, namely.
1. Company - includes areas inside the company like top management,

various departments such as Finance, Marketing, Production, and among
others. Building good rapport with other departments can create effective
customer service that can lead to customer satisfaction.
2. Suppliers - commonly it provides resources to produce the needed goods and
services. Suppliers have a greater impact on the delivery network system of the
organization. One consideration is the supply availability and the price trends.
3. Marketing Intermediaries - it helps the organizations establish links with
customers through promotion, selling, and distribution of products to the
buyer. Included here are reseller, physical distribution like logistic firm,
marketing agencies like media firms and advertising agency, and financial
intermediaries like banks and credit companies. These intermediaries are an
important factor of the overall customer value.
What’s New
4. Customers - they are the actual buyers of the product. These markets composed of
consumer markets like individual and household, business markets involve further
processing, reseller markets, government markets like DTI, and international
markets. The main goal of an organization is to meet the needs and wants of its
customers and provide customer satisfaction
5. Competitors - those that serve with similar products and services to the same
market. Competition has a greater impact on the organization to create, innovate, and
introduce new products to the market. Marketers should be ready to meet the
challenges and threats and develop marketing strategies to overcome competition.
6. Public - is any group that has an actual or potential interest in or impact on an
organization’s ability to achieve its objectives. These are identified as being financial
public like banks and stockholders, media public like radio stations and television,
government public, citizen-action public like environmental groups, local public,
general public, and internal public.
Macroenvironment involves a set of environmental factors that is beyond the
control of an organization. The constant change of macroenvironment brings
opportunities and threats in an organization which have influence in organizational
activities. It consists of external forces:
1. Demographic - it includes population, genders, age, income, and family size.
Marketers have greater interest in demographics because it involves people, and
people create markets.
2. Economic - it includes the labor force, gross national products, inflation rate, and
foreign exchange rates. Economic forces are significant because they indicate the
growth of an organization and the purchasing power of consumers.
3. Social-cultural - it includes beliefs and custom, values, and social trends. These
forces help in determining what type of products consumers prefer.
4. Politico-legal - it includes both political and legal factors. Political involves
government actions that influence the economy. Political unrest like in the lower
house can cause delay of the national budget of the next term. Legal involves
the implementation of laws, regulations, and government policies.
5. Technological - it contributes to the economic growth of a country.
Marketers should observe the rapid changing trends in technology in order
to survive today’s competitive environment.
6. Environmental - it concerns the climate, weather, natural resources, and
pollution. Organization adopts eco-friendly products to address the
environmental issues facing nowadays.
Most organizations view the marketing environment as an

uncontrollable force to which they must adapt. Marketers should learn to
identify opportunities and deal with threats. It’s better to adopt change,
prepare strategies, meet consumers’ needs, and go with competition to
survive in the dynamic changes occurring in the marketing
environment.
Marketing Environment
Marketing Environment is the combination of external and internal factors
and forces which influences the organizations’ capability to undertake its
business.
Components of Marketing Environment

The marketing environment is broadly classified into two (2) – Internal and
External Environments. External environments are of two (2) types, these are
Micro-External Environment and
the Macro-External Environment.
Internal environment are factors and forces inside the firm that affects the
overall marketing operation. These factors and forces can be grouped together
and known as five (5) Ms of Marketing, These are, Men,
Money, Machine, Materials and Market.
External environment consists of factors and forces that are outside the
business and which the marketer has no control.
Ms of Marketing
The internal environment of the firms consists of five (5) Ms. These are,
Men, Money, Machine, Materials and Market.
Men are the human resources of the firm. They are the main proponents of
the business who contributes significantly to its success.
The quality of the human resources of the firm depends on the type of
trainings and motivations they received from management.
Money is most liquid asset of the company. These are amounts received in
lieu of the goods and services the employees are providing to the customers.
Also, these are the amount invested by the owners of the firm.
Machines are the product of technological advancements. They are produced
to make production more effective and efficient.
Materials are the in the form of inventories. It is an asset of the company and
used to produce finish goods.
Market is the environment of the company where the products / service is
sold. It could be everywhere as long as there is a legal object of sales and there
is a capable and willing buyer.
Forces and Factors of Micro-External Environment
The micro-external environment includes all those factors that are closely
associated with the operation of the firm and influences its decision. There are:The
Company are all the separate entities like advertising agencies, market research organizations,
banking and insurance companies, transportation companies, brokers, etc. which conduct
business with the organization.
Suppliers are entities or individual that provides the resources needed by the company.
The terms of payment maybe in the form credit or in cash basis.
Market Intermediaries are the parties involved in the distribution of the product / services
of the firm. Customers are the target market of the firm. It could be determined by age bracket,
economic standing, educational attainment, etc.
Competitors are the players of the same industry as the firm and target the
same customer as the company.
Public are groups of people that has an actual or potential interest to the
company. Examples: media, government.
THANK YOU!

Marketing Environment

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PRINCIPLES OF MARKETING

1. Company - includes areas inside the company like top management,

Most organizations view the marketing environment as an

Components of Marketing Environment

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