UNIVERSITY OF CEBU (UC)

GRADUATE SCHOOL
Sanciangko St., Cebu City

REACTION PAPER IN
MARKETING MANAGEMENT (BM 207)

Masterand: Agnes C. Ampo Course: MBA

Chapter 3 – Analyzing the Marketing Environment

Introduction

Every business, no matter how big or small, operates within the marketing

environment. This is why it is important to analyze the marketing environment. It’s

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 long, one has to

understand and analyze the marketing environment and its components properly.

Topic Summary

The marketing environment is consists of the actors and forces outside

marketing that affect marketing management's ability to build and maintain

successfully relationships with target customers. This would be the

microenvironment and macroenvironment. The microenvironment is consists of the

actors close to the company that affect its ability to services its customers. The

macroenvironment is consists of larger societal forces that affect the

microenvironment. In microenvironment, the marketing management's job is to build

relationships with customers by creating customer value and satisfaction. First actor

of the microenvironment is the company. This will be all the interrelated groups (top
management, finance, R&D, purchasing, operations, human resource and

accounting) from the internal environment. All groups should work in harmony to

provide superior customer value and relationships. Next actor is the suppliers. They

provide the resources needed by the company to produce its goods and services.

Marketing managers must watch supply availability-supply shortages or delays, labor

strikes, and other events can cost sales in the short run and damage customer

satisfaction in the long run. Another actor is marketing intermediaries. This helps the

company to promote, sell and distribute its products to final buyers. Under marketing

intermediaries are resellers, physical distribution firms, marketing agencies and

financial intermediaries. Marketers recognize the importance of working with their

intermediaries as partners rather than simply as channels through which they sell

their products. Other actor is competitors. Marketers must gain strategic advantage

by positioning their offerings strongly against competitor's offering in the minds of

consumers. Next is the publics which is any group that has an actual or potential

interest in our impact on an organization's ability to achieve its objectives. This

includes financial publics, media publics, government publics, citizen-action publics,

local publics, general publics and internal publics. The last and the most important

actor of the microenvironment is the customers. There are five types of customers

which are consumer markets, business markets, reseller markets, government

markets and international markets. On the macroenvironment, the actors includes

demographic environment, economic, natural, technological, political and cultural.

Demographic environment includes age, family, structure (baby boomers, generation

x, millennials and generation z) geographic population shifts, educational

characteristic and population diversity. Economic environment consists of factors that

affect consumer purchasing power and spending patterns. The natural environment
involves the natural resources that are needed as inputs by marketers or that are

affected by marketing activities. Trends in the natural environment include shortage

of raw materials, increased pollution and increased government intervention.

Companies are developing strategies and practices that support environmental

sustainability. Technological environment is the most dramatic force in changing

marketplace. It creates new products and opportunities. Safety of new products

always a concern. Political government consists of laws, government agencies, and

pressure groups that influence or limit various organizations and individuals in a

given society. Governments develop public policy to guide commerce. Business

legislation has been enacted for a number of reasons. This includes protecting

companies from each other, to protect consumers from unfair business practices, to

protect the interests of society against unrestrained business behavior. Socially

responsible behavior enlightened companies encourage their managers to do the

right think. The boom in the internet has created a new set of social and ethical

issues. Cultural environment is made up of the institutions and other forces that

affect society's basic values, perceptions, preferences, and behaviors. It is important

to understand the persistence of cultural values, the core and secondary beliefs and

its cultural shifts which includes people's view of themselves, people's view of others,

people's view of organizations, people's view of society, people's view of nature and

people's view of universe. Companies can passively accept the marketing

environment as uncontrollable element to which they must adapt, avoiding threats

and taking advantage of opportunities as they arise. Or they can take a proactive

stance, working to change the environment rather than simply reacting to it.

Whenever possible, companies should try to be proactive rather than reactive.

Recommendation
 The report was good. However, it would help if the reported provided plenty of

examples to understand more the actors and forces of the marketing environment.

Also, it would be helpful to ask the co-masterands to let them read some of the

presentation slides to have class interaction.

Conclusion

Indeed, understanding the micro and macro marketing environment forces is

essential for planning. This helps a business to compete more effectively against its

rivals. This assists in the identification of opportunities and threats and enables an

organization to take advantage of emerging strategic opportunities.