BUS343 Chapter 3

What is this chapter about?

Understanding the outside forces that affect a company’s ability to build and maintain relationships with customers

What is microenvironment?

Close forces the company interacts with directly

What is macro environment?

Larger societal forces beyond the company’s control

What are the forces in micro environment?

1. The Company

• Internal departments (marketing, finance, R&D, HR) must coordinate as a value delivery network.

2. Suppliers

• Provide resources needed to produce goods/services.

• Supply issues (delays, shortages, inflation) can affect pricing and quality.

3. Marketing Intermediaries

• Help promote, sell, and distribute goods (e.g., retailers, logistics firms, marketing agencies).

• Building strong partnerships is crucial.

4. Competitors

• Companies must position themselves strongly against rivals.

• Competitive advantage is key to long-term survival.

5. Publics

Any group with actual or potential interest in or impact on the company’s ability to achieve objectives.

6. Customers

The most important actors in the microenvironment:

• Consumer markets

• Business markets

• Reseller markets

• Government markets

• International markets

Types pf publics in micro environment?

• Financial publics (banks, investors)

• Media publics (news, social media)

• Government (laws, regulations)

• Citizen-action (consumer advocacy groups)

• Local (neighborhood orgs)

• General (public opinion)

• Internal (employees)

What are the external forces in Macroenvironment?

1. Demographic Forces

• Study of human populations (age, gender, race, income, education, etc.)

• Baby Boomers, Gen X, Millennials, and Gen Z all behave differently

• Generational marketing tailors messages for each group

➡ Changing household structures and increased diversity also affect marketing decisions.

2. Economic Environment

• Factors that affect consumer purchasing power and spending patterns

• Includes inflation, income distribution, interest rates

• Example: Recession leads to more value-focused marketing

3. Natural Environment

• Natural resources used or affected by companies (climate, raw materials, pollution)

• Growing importance of sustainability, eco-friendly products, and CSR

4. Technological Environment

• Most dramatic force — creates new markets and makes old ones obsolete

• Includes AI, apps, automation, digital platforms

• Rapid change = companies must innovate constantly

5. Political and Social Environment

• Laws, government agencies, and pressure groups that influence marketing

• Important legislation covers:

  • Product safety

  • Environmental protection

  • Competitive practices

• Also includes cause-related marketing and growing demand for ethical practices

6. Cultural Environment

• Institutions and values that influence perceptions and behaviors

Two types of beliefs:

• Core beliefs: Passed from parents/society; slow to change

• Secondary beliefs: More open to change (e.g., views on brands, lifestyles)

Trend examples:

• Individualism

• Wellness and mental health

• Social justice and inclusivity

How to respond to Marketing Environment change?

Smart marketers don’t just react — they actively shape the environment when possible.

• Proactive firms use lobbying, partnerships, CSR, or innovation to stay ahead.

• Reactive firms adjust only when forced to.

What is publics?

Groups with an interest or impact on the company (e.g. media, financial, government, local)

What is Demographic environment?

Study of population characteristics that influence marketing strategies

What is Generational Marketing?

Tailoring products and messages to specific ages group like Gen z and boomers

What are Core beliefs and secondary Beliefs?

Core beliefs - fundamental, persistent values passed through generations

Secondary Beliefs - more flexible, attitudes that marketers can influence.