Unit One

Fundamentals of Marketing
Module 1
Introduction
This chapter is divided into three sessions. The first session will deal with the definitions of
marketing and marketing management; the second session will focus on core concepts of
marketing and the last session will deal with the evolution of the marketing management
concepts/philosophies and the marketing process.

Learning objective
After completing this unit you will be able to
 Define marketing from different perspectives
 Understand the meaning of the core concepts of marketing
 Explain the evolution of marketing management philosophies
 Differentiate marketing from selling
 Explain the marketing process

Discussion Questions
 What do you think is marketing?
 Do you understand the following marketing concepts? Needs, wants, demand, product,

exchange, transaction and market.

Session 1
Reading Text
The Meaning of Marketing
The simplest definition is this one: Marketing is the delivery of customer satisfaction at a profit.
The twofold goal of marketing is to attract new customers by promising superior value and
to .keep current customers by delivering satisfaction. Sound marketing is critical to the success
of every organization-large or small, for-profit or not-for-profit, domestic or global…
Marketing Defined
Marketing can be defined as a social and managerial process whereby individuals and groups
obtain what they need and want through creating and exchanging products and value with others.

Marketing is different from selling. Selling occurs only after a product is produced. By contrast,
marketing starts 1ong before a company has a product. Marketing is the homework that
managers undertake assess needs, measure their extent and intensity, and determine whether a
profitable opportunity exists. Marketing continues throughout the product's life, trying to find
new customers and keep current customers by improving product appeal and performance,
learning from product sales results, and managing repeat performance. If the marketer does a
good job of understanding consumer needs, develops products that provide superior value, and
prices, distributes, and promotes them effectively; these products will sell very easily. Thus,
selling and advertising are only part of a larger “marketing mix”- a set of marketing tools that
work together to affect the marketplace.

Core Concepts of Marketing

In order to explain the marketing definition, we will examine the following important terms:
needs, wants, and demands; products and services; value, satisfaction, and quality; exchange,
transactions, and relationships; and markets. These core marketing concepts are linked, with each
concept building on the one before it.
Needs, Wants, and Demands
 Needs: The most basic concept underlying marketing is that of human needs. Human
needs are states of felt deprivation. They include basic physical needs for food, clothing,
warmth, and safety; social needs for belonging and affection; and individual needs for
knowledge and self-expression. These needs were not invented by marketers; they are a
basic part of the human makeup.
 Wants are the form taken by human needs as they are shaped by one's society’s culture
and individual personality, experience and economic background and are described in
terms of objects that will satisfy needs. A hungry person in America needs food but wants
 a hamburger, French fries, and a soft drink. A person in Mauritius needs food but wants a
mango, rice, lentils, and beans.
 Demand: When backed by buying power, wants become demands. Consumers view
products as bundles of benefits and choose products that give them the best bundle for
their money. Given their wants and resources, people demand products with the benefits
that add up to the most satisfaction.
Products and Services
People satisfy their needs and wants with products and services. A product is anything that can
be offered to a market to satisfy a need or want. The concept of product is not limited to physical
objects -- anything capable of satisfying a need can be called a product. In addition to tangible
goods, products include services, which are activities or benefits offered for sale that are
essentially intangible and do not result in the ownership of anything. Examples include banking,
airline, hotel, tax preparation, and home repair services.

More broadly defined, products also include other entities such as, persons, places,
organizations, information, and ideas. Consumers decide which entertainers to watch on
television, which place to visit on vacation, which organization to support through contributions
and which ideas to adopt. To the consumer, these are all products. If at times the term product
does not seem to fit, we could substitute other, terms such as satisfier, resource, or offer.

Lecture Synopsis
 Marketing is the delivery of customer satisfaction at a profit.
 Marketing can be defined as a social and managerial process whereby individuals and
groups obtain what they need and want through creating and exchanging products and
value with others.
 Marketing is different from selling.
 Selling occurs only after a product is produced.
 Needs are states of felt deprivation.
 Wants are the form taken by human needs as they are shaped by one's society’s culture
and individual personality, experience and economic background and are described in
terms of objects that will satisfy needs.
 When backed by buying power, wants become demands.
  A product is anything that can be offered to a market to satisfy a need or want.

Wrap – up Questions
1. Define marketing and marketing management.
2. Differentiate the core concepts of marketing such as needs, wants, demand and products

Session 2
Reading Text
Value, Satisfaction, and Quality
Consumers usually face a broad array of products and services that might satisfy a given need.
How do they choose among these many products and services? Consumers make buying choices
based on their perceptions of the value that various products and services deliver.
 Customer value is the difference between the values the customer gains from owning and
using a product and the costs of obtaining the product. Customers often do not judge product
values and costs accurately or objectively. They act on perceived value.
 Customer satisfaction depends on a product's perceived performance in delivering value
relative to a buyer's expectations. If the product's performance falls short of the customer's
expectations, the buyer is dissatisfied. If performance matches expectations, the buyer is
satisfied. If performance exceeds expectations, the buyer is delighted. Outstanding marketing
companies go out of their way to keep their customers satisfied. The key is to match
customer expectations with company performance. Smart companies aim to delight
customers by promising only what they can deliver, then delivering more than they promise.
 Quality: Customer satisfaction is closely linked to quality. In recent years, many companies
have adopted total quality management (TQM) programs, designed to constantly improve
the quality of their products, services, and marketing processes. Quality has a direct impact
on product performance and hence on customer satisfaction.
In the narrowest sense quality can be defined as "freedom from defects." But most customer-
centered companies go beyond this narrow definition of quality. Instead, they define quality in
terms of customer satisfaction. So quality can be understood as fitness to use or purpose or
meeting expectations. Quality begins with customer needs and ends with customer satisfaction.
Exchange, Transactions, and Relationships
  Exchange: Marketing occurs when people decide to satisfy needs and wants through
exchange. Exchange is the act of obtaining a desired object from someone by offering
something in return. Exchange is only one of many ways that people can obtain a desired
object. For example, hungry people could find food by hunting, fishing, or gathering
fruit. They could beg for food or take food from someone else. Or they could offer
money, another good, or a service in return for food.
People do not have to prey on others or depend on donations, nor must they possess the skills to
produce every necessity for themselves. They can concentrate on making things that they are
good at making and trade them for needed items made by others. Thus, exchange allows a
society to produce much more than it would with any alternative system.
For exchange potential to exist, five conditions must be satisfied.
 There are at least two parties
 Each party has something that might be of value to the other party.
 Each party is capable of communication & delivery
 Each party is free to accept or reject the exchange offer.
 Each party believes it is appropriate or desirable to deal with the other party.
 Transaction: Whereas exchange is the core concept of marketing, a transaction, in turn, is
marketing's unit of measurement. A transaction consists of a trade of values between two
parties: One party gives X to another party and gets Y in return. For example, you pay Birr
for a television set. This is a classic monetary transaction, but not all transactions involve
money. In a barter transaction, you might trade your old refrigerator in return for a neighbor's
secondhand television set.
In the broadest sense, the marketer tries to bring about a response to some offer. The response
may be more than simply buying or trading goods and services. A political candidate, for
instance, wants votes, a church wants membership, and a social action group wants idea
acceptance. Marketing consists of actions taken to obtain a desired response from a target
audience toward some product, service, idea, or other object.
 Relationship Marketing: Transaction marketing is part of the larger idea of relationship
marketing. Beyond creating short-term transactions, marketers need to build long-term
relationships with valued customers, distributors, dealers, and suppliers. They want to
build strong economic and social connections by promising and consistently delivering
 high-quality products, good service, and fair prices.
Increasingly, marketing is shifting from trying to maximize the profit on each individual
transaction to building mutually beneficial relationships with consumers and other parties. In
fact, ultimately, a company wants to build a unique company asset called a marketing network. A
marketing network consists of the company and its supporting stakeholders: customers,
employees, suppliers, distributors, retailers, ad agencies, and others with whom it has built
mutually profitable business relationships. Increasingly, competition is not between companies
but rather between whole networks, with the prize going to the company that has built the better
network. The operating principle is simple: Build a good network of relationships with key
stakeholders and profits will follow.
Market, Marketing and Marketing Management
 Market: The concepts of exchange and relationships lead to the concept of a market. A
market is the set of actual and potential buyers of a product. These buyers share a
particular need or want that can be satisfied through exchanges and relationships. Thus,
the size of a market depends on the number of people who exhibit the need, have
resources to engage in exchange, and are willing to offer these resources in exchange for
what they want.

Originally the term market stood for the place where buyers and sellers gathered to exchange
their goods, such as a village square. Economists use the term market to refer to a collection of
buyers and sellers who transact in a particular product class, as in the housing market or the grain
market. Marketers, however, see the sellers as constituting an industry and the buyers as
constituting a market. The sellers and the buyers are connected by four flows. The sellers send
products, services, and communications to the market; .in return, they receive money and
information. The inner loop shows an exchange of money for goods; the outer loop shows an
exchange of information.
 Marketing: - The concept of markets finally brings us full circle to the concept of
marketing. Marketing means managing markets to bring about exchanges and
relationships for the purpose of creating value and satisfying needs and wants. Thus, we
return to our definition of marketing as a process by which individuals and groups obtain
what they need and want by creating and exchanging products and value with others.
Exchange processes involve work. Sellers must search for buyers, identify their needs, design
good products and services, set prices for them, promote them, and store and deliver them.
Activities such as product development, research, communication, distribution, pricing and
service are core marketing activities. Although we normally think of marketing as being carried
on by sellers, buyers also carry on marketing activities. Consumers do marketing when they
search for the goods they can afford. Company purchasing agents do marketing when they track
down sellers and bargain for good terms.

In the usual situation, marketing involves serving a market of end users in the face of competi-
tors. The company and the competitors send their respective products and messages to
consumers either directly or through marketing intermediaries to the end users. All of the actors
in the system are affected by major environmental forces (demographic, economic, physical,
technological, political-legal, social-cultural).

Each party in the system adds value for the next level. Thus, a company's success depends not
only on its own actions but also on how well the entire system serves the needs of final
consumers.
 Marketing Management: - We define marketing management as the analysis, planning,
implementation and control of programs designed to create, build and maintain beneficial
exchanges with target buyers for the purpose of achieving organizational objectives.
Marketing management involves managing demand, which in turn involves managing
customer relationships.
Demand Management: The organization has a desired level of demand for its products.
At any point in time, there may be no demand, adequate demand, irregular demand, or to
much demand, and marketing management must find ways to deal with these different
demand status. Marketing management is concerned on only with finding and increasing
demand, but also with changing or even reducing it (demarketing). Demarkeitng is
marketing to reduce demand temporarily or permanently. The aim of demarketing is not
to destroy demand, but only to reduce or shift it. Thus, marketing management seeks to
affect the level, timing and nature of demand in a way that helps the organization achieve
its objectives. Simply put, marketing management is demand management.
Managing Customer Relationship: - Managing demand means managing customers. A
company’s demand comes from two groups: new customers and repeat customers.
Traditional marketing theory and practice have focused on attracting new customers and
 making sale. Today, however, the emphasis is shifting. Beyond designing strategies to
attract new customers and create transactions with them, companies now are going all out
to retain current customers and build lasting customer relationships.

Lecture Synopsis
 Customer value is the difference between the values the customer gains from owning and
using a product and the costs of obtaining the product.
 Customer satisfaction depends on a product's perceived performance in delivering value
relative to a buyer's expectations.
o If the product's performance falls short of the customer's expectations, the buyer is
dissatisfied.
o If performance matches expectations, the buyer is satisfied.
o If performance exceeds expectations, the buyer is delighted.
 Quality customer satisfaction is closely linked to quality.
 Exchange is the act of obtaining a desired object from someone by offering something in
return.
 A transaction consists of a trade of values between two parties: One party gives X to
another party and gets Y in return.
 Transaction marketing is part of the larger idea of relationship marketing.
 The concepts of exchange and relationships lead to the concept of a market.
 A market is the set of actual and potential buyers of a product.
 Originally the term market stood for the place where buyers and sellers gathered to
exchange their goods, such as a village square.
 Economists use the term market to refer to a collection of buyers and sellers who transact
in a particular product class, as in the housing market or the grain market.
 Marketing Management is the analysis, planning, implementation and control of programs
designed to create, build and maintain beneficial exchanges with target buyers for the
purpose of achieving organizational objectives.
 Marketing management involves managing demand, which in turn involves managing
customer relationships.

Wrap- up questions
  Define the marketing concepts
o Value, Satisfaction, and Quality
o Exchange, Transactions, and Relationships
o Market, Marketing and Marketing Management

Session 3
Reading Text
Marketing Management Concepts/Philosophies
 Evolution of Marketing Management Concepts/Philosophy
We describe marketing management as carrying out tasks to achieve desired exchanges with
target markets. What philosophy should guide these marketing efforts? What weight should be
given to the interests of the organization, customer and society? Very often these interests
conflict to each other.

There are five alternative concepts under which organizations conduct their marketing activities:
the production, product, selling, marketing, and social marketing concepts.
a. The Production Concept/philosophy
The production concept holds that consumers will favor products that are available and highly
affordable. Therefore, management should focus on improving production and distribution
efficiency. This concept is one of the oldest philosophies that guide sellers.
The production concept is still a useful philosophy in two types of situations.
 The first occurs when the demand for a product exceed the supply. Here, management
should look for ways to increase production.
 The second situation occurs when the product’s cost is too high and improving
productivity is needed to bring it down.

b. The Product Concept/philosophy

This assumes that consumers will favor products that offer the most in quality, performance, and
innovative features. Thus, an organization should devote energy to making continuous product
improvements. Manufacturers who follow this concept believe that “if you can build a better
mousetrap, preach a better sermon, write the best book, the world will make a beaten path to
your door, though you build your houses in the woods”.

Product-oriented companies often design their products with little or no customer input. They
trust that their engineers will know how to design or improve the product. But they are often
rudely shocked. Buyers may well be looking for a better solution to a mouse problem but not
necessarily for a better mousetrap. The solution might be a chemical spray, an exterminating
service, or something that works better than a mousetrap. Furthermore, a better mousetrap will
not sell unless the manufacturer designs, packages, and prices it attractively; places it in
convenient distribution channels; brings it to the attention of people who need it; and convinces
buyers that it is a better product.
c. The Selling Concept/philosophy (Mid 1930 –Mid 1950)
The Depression changed perception. The main problem no longer was to produce or grow
enough, but rather to sell the output. Just offering a good product was not an assurance for
market success. Managers began to realize that to sell their product in an environment where
consumers had the opportunity to choose from among many alternatives required substantial
promotional effort.
Many organizations follow the selling concept, which holds that consumers will not buy enough
of the organization's products unless it undertakes a large-scale selling and promotion effort. The
concept is typically practiced with unsought goods-those that buyers do not normally think of
buying, such as encyclopedias or insurance. These industries must excel at tracking down
prospects and selling them on product benefits.

Most firms practice the selling concept when they have overcapacity. Their aim is to sell what
they make rather than make what the market wants. Such marketing carries high risks. It focuses
on creating sales transactions rather than on building long-term, profitable relationships with
customers. It assumes that customers who are coaxed into buying the product will like it. Or, if
they don't like it, they will possibly forget their disappointment and buy it again later. These are
usually poor assumptions to make about buyers. Most studies show that dissatisfied customers do
not buy again. Worse yet, the average satisfied customer tells three others about good
experiences, the average dissatisfied customer tells ten others about his or her bad experiences.

d. The Marketing Concept/philosophy (Mid-1950s-1990)

The marketing concept holds that achieving organizational goals depends on determining the
needs and wants of target markets and delivering the desired satisfactions more effectively and
efficiently than competitors do. The marketing concept has been stated in colorful ways, such as
"We make it happen for you" (Marriott); "To fly, to serve" (British Airways); "We're not
satisfied until you are" (GE); and "Let us exceed your expectations" (Celebrity Cruise Lines).

The selling concept and the marketing concept are sometimes confused. The selling concept
takes an inside-out perspective. It starts with the factory, focuses on the company's existing-
products, and calls for heavy selling and promotion to obtain profitable sales. It focuses primarily
on customer conquest-getting short-term sales with little concern about who buys or why.

In contrast, the marketing concept takes an outside in perspective. As Herb Kelleher, Southwest
Airline’s colorful CEO, puts it, "We don't have a Marketing Department; we have a Customer
Department "The marketing concept starts with a well-defined market, focuses on customer
needs, coordinates all the' marketing activities affecting customers, and makes profits by creating
long-term customer relationships based on customer value and satisfaction. Thus, under the
marketing concept, customer focus and value are the paths to sales and profits. In the words of
one Ford executive, "If we're not customer driven, our cars won't be either."
L.L. Bean has included the following notice: I do not consider a sale complete until goods are
worn out and the customer still is satisfied. We will thank anyone to return goods that are not
perfectly satisfactory . . . . . .Above all things we wish to avoid having a dissatisfied customer.

Today, L.L. Bean dedicates itself to giving "perfect satisfaction in every way.” To inspire its
employees to practice the marketing concept, L.L. Bean has for decades displayed posters around
its offices that proclaim the following:
What is a customer? A customer is the most important person ever in this company - in
person or by mail. A customer is not dependent on us, we are dependent on him. A customer
is not an interruption of our work; he is the purpose of it. We are not doing a favor by serving
him; he is doing us a favor by giving us the opportunity to do so. A customer is not someone
to argue or match wits with -- nobody ever won an argument with a customer. A customer is a
person who brings us his wants -- it is our job to handle them profitably to him and to
ourselves.
In contrast, many companies claim to practice the marketing concept but do not. They have the
forms of marketing, such as marketing vice president, product managers, marketing plans, and
marketing research, but this does not mean that they are market-focused and customer-driven
companies. The question is whether they are finely tuned to changing customer needs and
competitor strategies.
e. The Societal Marketing Concept/philosophy
The societal marketing concept holds that the organization should determine the needs, wants,
and interests of target markets. It should then deliver superior value to customers in a way that
maintains or improves the consumer's and the society’s well being. The societal marketing
concept is the newest of the five marketing management philosophies.

The societal marketing concept questions whether the pure marketing concept is adequate in an
age of environmental problems, resource shortages, rapid population growth, worldwide
economic problems, and neglected social services. It asks if the firm that senses, serves, and
satisfies individual wants is always doing what's best for consumers and society in the long run.
According to the societal marketing concept, the pure marketing concept overlooks possible
conflicts between consumer short-run wants and consumer long-run welfare.

Consider the fast-food' industry. Most people see today's giant fast-food chains as offering tasty
and convenient food at reasonable prices. Yet many consumer and environmental groups have
voiced concerns. Critics point out that hamburgers, fried chicken, French fries, and most other
foods sold by fast-food restaurants are high in fat and salt. The products are wrapped in
convenient packaging, but this leads to waste and pollution. Thus, in satisfying consumer wants,
the highly successful fast-food chains may be harming consumer health and causing environmen-
tal problems.

Such concerns and conflicts led to the societal marketing concept. The societal marketing
concept calls on marketers to balance three considerations in setting their marketing policies:
company profits, consumer wants, and society's interests. Originally, most companies based their
marketing decisions largely on short-run company profit. Eventually, they began to recognize the
long run importance of satisfying consumer wants, and the marketing concept emerged. Now
many companies are beginning to think of society's interests when making their marketing
decisions.
Differences between Marketing and Selling Concepts
For most of us, we must mistakenly think that selling & marketing are synonyms. However,
there is a vast difference between the two activities. The basic difference is that selling is
internally focused, while marketing is externally focused.
E.g. 1. When a firm makes a product and then tries to persuade customers to buy it , that’s
selling. In effect, the firm attempts to alter consumer demand to fit the firm’s supply of
the product.
E.g. 2. When a firm finds out the customer wants and develops a product that will satisfy that
need and also yield a profit, that’s marketing. In marketing the company adjusts its
supply to the will of consumer demand.
A selling approach may be successful for a while, but if the customer is not given priority,
problems will occur. As a result despite selling many units it did not generate sufficient profits to
invest in critical marketing activities –promotion, customer service, product improvements and
building a strong dealer network- that would have continued to meet the needs of the market.
 Some distinction between selling and marketing are:
Selling Marketing
 Emphasis is on the product  Emphasis is on customer’s wants.
 Company first makes the Product and then  Company first determines Customers wants
figures out how to Sell it. and then figures at How to make and deliver
a product to satisfy those wants.
 Management is sales-volume oriented  Management is profit oriented.
 Planning is short run oriented, in terms  Planning is long-run oriented, In
of today’s products & markets. terms of new products, tomorrow’
markets , and future growth.
 Needs of seller are stressed  Wants of buyers are stressed.

The Marketing Process

The strategic pan defines the company’s overall mission and objectives. Within each business
unit, marketing plays a role in helping to accomplish the overall strategic objectives. Marketing’s
role and activities in the organization are summarized in the marketing process.

The marketing process is the process of analyzing marketing opportunities, selecting target
markets, developing the marketing mix and managing the marketing effort. Target consumers
stand in the center. The company identifies the total market, divides it into smaller segments,
selects the most promising segments, and focuses on serving and satisfying these segments. It
designs a marketing mix made up of factors under its control __ product, price, place and
promotion. To find the best marketing mix and put it into action, the company engages in
marketing analysis, planning, implementation and control.
A. Marketing Strategies for Competitive Advantage
To be successful, the company must do a better job than its competitors of satisfying target
consumers. Thus, marketing strategies must be geared to the needs of consumers and also to the
strategies of competitors.
Designing competitive marketing strategies begins with thorough competitor analysis. The
company constantly compares the value and customer satisfaction delivered by its products,
prices, channels, and promotion with those of its close competitors. In this way it can discern
areas of potential advantage and disadvantage.
The company asks:
 Who are our competitors?
 What are their objectives and strategies?
 What are their strengths and weaknesses?
 How will they react to different competitive strategies we might use?

The competitive marketing strategy a company adopts depends on its industry position. A firm
that dominates a market can adopt one or more of several market leader strategies. Market
challengers are runner-up companies that aggressively attack competitors to get more market
share. For example, Pepsi challenges Coke, Komatsu challenges Caterpillar, and MSN
challenges America Online.

The challenger might attack the market leader; other firms its own size, or smaller local and
regional competitors.

Some runner-up firms will choose to follow rather than challenge the market leader. Firms using
market follower strategies seek stable market shares and profits by following competitors'
product offers, prices, and marketing programs. Smaller firms in a market, or even larger firms
that lack established positions, often adopt market niches strategies. They specialize in serving
market niches that major competitors overlook or ignore. For example, Arm & Hammer has a
lock on the baking soda corner of most consumer goods categories, including toothpaste,
deodorizers, and others. Oshkosh Truck has found its niche as the world's largest producer of
airport rescue trucks and front-loading concrete mixers. "Nichers" avoid direct confrontations
with the majors by specializing along market, customer, product, or marketing mix lines.
Through smart niching, smaller firms in an industry can be as profitable as their larger
competitors.
B. Developing the Marketing Mix
Once the company has decided on its overall competitive marketing strategy, it is ready to begin
planning the details of the marketing mix. The Marketing mix is the set of controllable, tactical
marketing tools that the firm blends to produce the response it wants in the target market. The
marketing mix consists of everything the firm can do to influence the demand for its product.
The many possibilities can be collected into four groups of variables known as the “four Ps”;
product, price, place and promotion.
C. Managing the Marketing Effort
The company wants to design and put into action the marketing mix that will best achieve its
objectives in its target markets. The company first develops overall strategic plans, then translate
these companywide strategic plans into marketing and other plans for each division, product and
brand. Through implementation, the company turns the plans into actions. Control consists of
measuring and evaluating the results of marketing activities and taking corrective action where
needed. Finally, marketing analysis provides information and evaluations needed for all of the
other marketing activities.
A Simple Model of the Marketing Process
Capture value
Understand the Design a Construct a Build
from
marketplace Customer marketing profitable
customer to
and customers driven program that relationships
create profits
needs and delivers and create
wants
Marketing and customer
superior customer
Strategy equity
value delight

Lecture Synopsis
 There are five alternative concepts under which organizations conduct their marketing
activities.
  The production concept is one of the oldest concepts in business. Holds that consumers
will favor these products that are widely available and low in cost. Its objective is
achieving high production efficiency and wide distribution.
 The product concept holds that consumers will favor those products that offer the most
quality, performance or innovative features. It focuses on making superior products and
improving them over time.
 Along with responsibilities came expectations for performance. Unfortunately, overly
aggressive selling – the “hard sell” – and unscrupulous tactics also evolved during this
period.
 In the marketing orientation stage companies identify what a customer’s want and tailor
all of the activities of the firm to satisfy those needs as efficiently and effectively as
possible.
 A firm that sufficiently extends the breadth and time dimensions of its marketing goals to
fulfill social responsibility are practicing what has become known as the societal
marketing concept.
 Extending the time dimension of its marketing goals means that a firm should take a
long-term new of customer satisfaction and performance objectives, rather than
concentrating only on tomorrow.
 For a company to prosper in the long run, it must satisfy its customer’s social needs as
well as their economic needs.
Wrap- up Questions
 Differentiate the marketing management concepts/philosophies
 Differentiate selling from marketing
 Unit Two
The Marketing Environment
Module 2
Introduction
Environmental forces influence organization marketing. Some of these forces are external to the
firm, while others come from within. There isn't much that management can do about
controlling the external forces, but it generally can control the internal ones.

This chapter will discuss the marketing environment and the elements of the marketing
environment. The chapter is divided in to three sessions. Session 1 will focus on the meaning of
the marketing environment, the elements of the macro environment and session 2 will focus on
the microenvironment and internal environment of the marketing function.

Learning Objectives
After reading this chapter, you should be able to:
 describe the environmental forces that affect the company’s ability to serve its
customers
 explain how changes in the demographic and economic environments affect marketing
decisions
 identify the major trends in the firm’s natural and technological environments.
 Explain the key changes in the political and cultural environments.
 Discuss how companies can react to the marketing environment.

Discussion Questions
 What do you think is a marketing environment?
 How do you differentiate the marketing environment from the physical environment?

Session 4
Reading Text
The Meaning of Marketing Environment
Managing the marketing function would be hard enough if the marketer had to deal only with the
controllable marketing mix variables. But the company operates in a complex marketing
environment, consisting of uncontrollable forces to which the company must adapt. The
environment produces both threats and opportunities. The company must carefully analyze its
environment so that it can avoid the threats and take advantage of the opportunities.

The company's marketing environment includes forces close to the company that affect its ability
to serve consumers, such another company departments, channel members, suppliers,
competitors, and publics. It also includes broader demographic and economic forces, political
and legal forces, technological and ecological forces, and social and cultural forces.

As we enter the new millennium, both consumers and marketers wonder what the future will
bring. The environment continues to change at a rapid pace. For example, think about how you
buy groceries today. How will your grocery buying change during the next few decades? What
challenges will these changes present for marketers? Here's what two leading futurists envision
for the year 2025.

We won't be shopping in 21-aisle supermarkets in 2025, predicts Gary Wright, corporate

demographer for Procter & Gamble in Cincinnati. The growth of e-commerce and the rapid
speed of the Internet will lead to online ordering of lower priced, nonperishable products-
everything from peanut butter to coffee filters. Retailers will become "bundlers," combining
these orders into large packages of goods for each household and delivering them efficiently to
their doorsteps. As a result, we'll see mergers between retailing and home-delivery giants-think
Wal-Mart Express, a powerful combo of Wal-Mart and Federal Express. Consumers won't waste
precious time searching for the best-priced bundle. Online information agents will do it for them,
comparing prices among competitors.

Smart information agents also play a role in the world imagined by Ryan Mathews, futurist at
First Matter LLC in Detroit. By 2025, computers will essentially be as smart as humans, he
contends, and consumers will use them to exchange information with on screen electronic agents
that ferret out the best deals online. Thanks to embedded-chip technology in the pantry, products
on a CHR (continuous household replenishment) list-like paper towels and pet food-will sense
when they're running low and reorder themselves automatically. If the information agent finds a
comparable but cheaper substitute for a CHR product, the item will be switched instantly.

Such pictures of the future give marketers plenty to think about. A company's marketers take the
major responsibility for identifying and predicting significant changes in the environment. More
than any other group in the company, marketers must be the trend trackers and opportunity
seekers. Although manager in an organization needs to observe the outside environment,
marketers have two special aptitudes” They have disciplined methods-marketing intelligence and
marketing research-for collecting information about the marketing environment-They also spend
more time in the customer and competitor environment. By conducting systematic environmental
scanning, marketers are able to revise and adapt marketing strategies to meet new challenges and
opportunities in the market place.

The marketing environment is made up of a microenvironment and a macro environment. The

microenvironment consists of the forces close to the company that affect its ability to serve its
customers-the company, suppliers, marketing channel firms, customer markets, competitors, and
publics. The macro environment consists of the larger society forces that affect the
microenvironment-demographic, economic, natural, technological, political, and cultural forces.
We look first at the company's microenvironment.

2.2. External Environment – The General Environment

The company and all of the other actors operate in a larger macro environment. They are forces
that shape opportunities and process threats to the company. They are the set of uncontrollable
forces by the marketing department. They are common to all companies. They affect the
company in two different ways:
a. By creating the environment within which companies exist, and
b. By creating the direct forces that affect the marketing function directly.
In the remaining sections of this chapter, we examine these forces and show how they affect
marketing functions.

A. The Demographic Environment

Demography is the study of human populations in terms of size, density, location, age, gender,
race, occupation, and other statistics. The demographic environment is of major interest to
marketers because it involves people, and people make up markets.

The world population is growing at an explosive rate. It now totals more than 6 billion and will
exceed 7.9 billion by the year 2025. The explosive world population growth has major
implications for business. A growing population means growing human needs to satisfy.
Depending on purchasing power, it may also mean growing market opportunities. For
example, to curb its skyrocketing population, the Chinese government has passed regulations
limiting families to one child each. As a result, Chinese children are spoiled and fussed over as
never before. Known in China as "little emperors," Chinese children are being showered with
everything from candy to computers as a result of what's known as the "six-pocket syndrome."
As many as six adults-including parents and two sets of doting grandparents-may be indulging
the whims of each child. Parents in the average Beijing household now spend about 40 percent of
their income on their cherished only child. This trend has encouraged toy companies such as
Japan's Bandai Company (known for its Mighty Morphine Power Rangers), Denmark's Lego
Group, and Mattel to enter the Chinese market.

The world's large and highly diverse population poses both opportunities and challenges.
Thus, marketers keep close track of demographic trends and developments in their markets, both
at home and abroad. They track changing age and family structures, geographic population
shifts, educational
Many large companies, ranging from large retailers such as Sears and Wal-Mart to consumer
products companies such as Levi-Strauss and Procter & Gamble, now target specially designed
products and promotions to one or more of these groups. Miller beer, for example, created
television ads for -the Hispanic market shown exclusively on Spanish-speaking channels. Even
within the Hispanic market, however, different consumers have diverse interests and beliefs
depending on country of origin, length of time in the United States, geographic placement, and
other factors. Thus, although Miller employs the same visual elements across the country, it
alters background music and voice-overs to reflect differences between, for example, Cubans in
New York City and Mexican Americans in Los Angeles.

Diversity goes beyond ethnic heritage. For example, there are more than 52 million disabled
people in the United States-a market larger than African Americans or Hispanics-representing
almost $800 million in annual spending power. People with mobility challenges are an ideal
target market for companies such as Peapod (wwvv.pe.pod.com), which teams up with large
supermarket chains in many heavily populated areas to offer online grocery shopping and home
delivery. They also represent a growing market for travel, sports, and other leisure-oriented
products and services.
b. Economic Environment
Markets require buying power as well as people. The economic environment consists of factors
that affect consumer purchasing power and spending patterns. Nations vary greatly in their levels
and distribution of income. Some countries have subsistence economies-they consume most of
their own agricultural and industrial output. These countries offer few market opportunities. At
the other extreme are industrial economies, which constitute rich markets for many different
kinds of goods. Marketers must pay close attention to major trends and consumer spending
patterns both across and within their world markets. Following are some of the major economic
factors/variables that affect the marketers’ ability to achieve its objectives.
 Changes in Income
 Change in the cost of living.
 Change in interest rates,
 Change in savings and borrowing patterns
 Savings and investment policies
 Employment rate
 Balance of payment and etc
Companies watch these variables by using economic forecasting. Businesses do not have to be
wiped out by an economic downturn or caught short in a boom. With adequate warning, they can
take advantage of changes in the economic environment.

C. Natural Environment
The natural environment involves the natural resources that are needed as inputs by marketers or
that are affected by marketing activities. Environmental concerns have grown steadily during the
past three decades.

Marketers should be aware of several trends in the natural environment.

1st. Growing shortages of raw materials. Air and water may seem to be infinite resources, but
some groups see long-run dangers. Air pollution chokes many of the world's large cities and
water shortages are already a big problem in some parts of the United States and the world.
Renewable resources, such as forests and food, also have to be used wisely. Nonrenewable
resources, such as oil, coal, and various minerals, pose a serious problem. Firms making products
that require these scarce resources face large cost increases, even if the materials do remain
available.

2nd. Increased pollution. Industry will almost always damage the quality of the natural
environment. Consider the disposal of chemical and nuclear wastes; the dangerous mercury
levels in the ocean; the quantity of chemical pollutants in the soil and food supply; and the
littering of the environment with non-biodegradable bottles, plastics, and other packaging
materials.

3rd. Increased government intervention in natural resource management. The governments

of different countries vary in their concern and efforts to promote a clean environment. Some,
like the German government, vigorously pursue environmental quality. Others, especially many
poorer nations, do little about pollution, largely because they lack the needed funds or political
will. Even the richer nations lack the vast funds and political accord needed to mount a
worldwide environmental effort. The general hope is that companies around the world will
accept more social responsibility, and that less expensive devices can be found to control and
reduce pollution.

In the United States, the Environmental Protection Agency (EPA) was created in 1970 to set and
enforce pollution standards and to conduct pollution research. In the future, companies doing
business in the United States can expect strong controls from government and pressure groups.
Instead of opposing regulation, marketers should help develop solutions to the material and
energy problems facing the world.

Concern for the natural environment has spawned the so-called green movement. Today,
enlightened companies go beyond what government regulations dictate. They are developing
environmentally sustainable strategies and practices in an effort to create a world economy that
the planet can support indefinitely. They are responding to consumer demands with ecologically
safer products, recyclable or biodegradable packaging, better pollution controls, and more
energy-efficient operations. 3M runs a Pollution Prevention Pays program that has led to a
substantial reduction in pollution and costs. AT&T uses a special software package to choose the
least harmful materials, cut hazardous waste, reduce energy use, and improve product recycling
in its operations. McDonald's eliminated polystyrene cartons and now uses smaller, recyclable
paper wrappings and napkins. IBM's AS/400e series of midrange business computers is more
energy efficient, contains recycled content, and is designed to be disassembled for recycling.
Dixon-Ticonderoga, the folks who developed the first pencil made in the United States,
developed Prang crayons made from soybeans rather than paraffin wax, a by-product of oil
drilling. Soybeans are a renewable resource and produce brighter, richer colors and a smoother
texture. More and more, companies are recognizing the link between a healthy economy and a
healthy ecology:

D. Technological Environment
The technological environment is perhaps the most dramatic force now shaping our destiny.
Technology has released such wonders as antibiotics, organ transplants, notebook computers,
and the Internet. It also has released such horrors as nuclear missiles, chemical weapons, and
assault rifles. It has released such mixed blessings as the automobile, television, and credit cards.
Our attitude toward technology depends on whether we are more impressed with its wonders or
its blunders.

The technological environment changes rapidly. Think of all of today's common products that
were not available 100 years ago, or even 30 years ago. Abraham Lincoln did not know about
automobiles, airplanes, radios, or the electric light. Woodrow Wilson did not know about
television, aerosol cans, automatic dishwashers, room air conditioners, antibiotics, or computers.
Franklin Delano Roosevelt did not know about xerography, synthetic detergents, tape recorders,
birth control pills, or earth satellites. John F. Kennedy did not know about personal computers,
compact disk players, VCRs, or the World Wide Web.

New technologies create new markets and opportunities. However, every new technology
replaces an older technology. Transistors hurt the vacuum-tube industry, xerography hurt the
carbon-paper business, the auto hurt the railroads, and compact disks hurt phonograph records.
When old industries fought or ignored new technologies, their businesses declined. Thus,
marketers should watch the technological environment closely. Companies that do not keep up
with technological change soon will find their products outdated. They will miss new product
and market opportunities.

Scientists today are researching a wide range of promising new products and services, ranging
from practical solar energy, electric cars, and cancer cures to voice controlled computers and
genetically engineered food crops. Today's research usually is carried out by research teams
rather than by lone inventors like Thomas Edison, Samuel Morse, or Alexander Graham Bell.
Many companies are adding marketing people to R&D teams to try to obtain a stronger
marketing orientation. Scientists also speculate on fantasy products, such as flying cars, three-
dimensional televisions, and space colonies. The "Challenge in each case is not only technical
but also commercial-to make practical, affordable versions of these products.

As products and technology become more complex, the public needs to know that these are safe.
Thus, government agencies investigate and ban potentially unsafe products. In the United States,
the Federal Food and Drug Administration has set up complex regulations for testing new drugs.
The Consumer Product Safety Commission sets safety standards for consumer products and
penalizes companies that fail to meet them. Such regulations have resulted in much higher
research costs and in longer times between new-product ideas and their introduction. Marketers
should be aware of these regulations when applying new technologies and developing new
products.

E. Legal/Political Environment
Marketing decisions are strongly affected by developments in the political environment. The
political environment consists of laws, government agencies, and pressure groups that influence
and limit various organizations and individuals in a given society. The existence of party
competition, civil war or peace etc also affect the marketers’ ability to achieve its objectives.

F. Social/Cultural Environment
The cultural environment is made up of institutions and other forces that affect a society's basic
values, perceptions, preferences, and behaviors. People grow up in a particular society that
shapes their basic beliefs and values. They absorb a world view that defines their relationships
with others. The following cultural characteristics can affect marketing decision making.
 Persistence of Cultural Values
People in a given society hold many beliefs and values. Their core beliefs and values have a high
degree of persistence. For example, most Americans believe in working, getting married, giving
to charity, and being honest. These beliefs shape more specific attitudes and behaviors found in
everyday life. Core beliefs and values are passed on from parents to children and are reinforced
by schools, churches, business, and government.

Secondary beliefs and values are more open to change. Believing in marriage is a core belief;
believing that people should get married early in life is a secondary belief. Marketers have some
chance of changing secondary values, but little chance of changing core values. For example,
family-planning marketers could argue more effectively that people should get married later than
that they should not get married at all.
 Shifts in Secondary Cultural Values
Although core values are fairly persistent, cultural swings do take place. Consider the impact of
popular music groups, movie personalities, and other celebrities on young people's hairstyling,
clothing, and sexual norms. Marketers want to predict cultural shifts in order to spot new
opportunities or threats. Several firms offer "futures" forecasts in this connection, For instance,
the percentage of people who value physical fitness and well-being has risen steadily over the
years. Such information helps marketers cater to trends with appropriate products and
communication appeals.

The major cultural values of a society are expressed in people's views of themselves and others,
as well as in their views of organizations, society, nature, and the universe.

 People's Views of Themselves. People vary in their emphasis on serving themselves

versus serving others. Some people seek personal pleasure, wanting fun, change, and escape.
Others seek self-realization through religion and recreation.
G. International/Global environment
This represents the forces stated above at the international or global level.

Lecture Synopsis
 Successful marketing depends largely on a company's ability to manage its marketing
programs within its environment.
 Environmental monitoring also called environmental scanning is deemed necessary.
Environmental monitoring is the process of:
1. Gathering information regarding a company's external environment.
2. Analyzing it, and
3. Forecasting the impact of whatever trends the analysis suggests.
  Environmental forces influence organization marketing
 Marketing Environment is divided in to two parts:-
1. External Environment and
2. Internal Environment.
 There isn't much that management can do about controlling the external forces, but it
generally can control the internal ones.
 External macro environment (so called because they affect all firms) includes
demographics, economic conditions, culture, and laws.
 Elements of the Macro Marketing Environment
o Demographic Environment
o Legal/political Environment
o Cultural Environment
o Economic Environment
o Natural Environment
o Technological Environment
Wrap-up discussion questions/ activities (10 min)
 Define the marketing environment
 Discuss the elements of the marketing macro environment

Session 5
Reading Text
The Company's Microenvironment
Marketing management's job is to attract and build relationships with customers by creating
customer value and satisfaction. However, marketing managers cannot accomplish this task
alone. Their success will depend on other actors in the company's microenvironment-other
company departments, suppliers, marketing intermediaries, customers, competitors, and various
publics, which combine to make up the company's value delivery system.
a. The Company
In designing marketing plans, marketing management takes other company groups into account-
groups such as top management, finance, research and development (R&D), purchasing,
manufacturing, and accounting. All these interrelated groups form the internal environment. Top
management sets the company’s mission, objectives, broad strategies, and policies. Marketing
managers make decisions within the plans made by top management, and marketing plans must
be approved by top management before they can be implemented.

Marketing managers must also work closely with other company departments. Finance is
concerned with finding-and using funds to carry out the marketing plan. The R&D department
focuses on designing safe and attractive products. Purchasing worries about getting supplies and
materials, whereas manufacturing is responsible for producing the desired quality and quantity of
products. Accounting has to measure revenues and costs to help marketing know how well it is
achieving its objectives. Together, all of these departments have an impact on the marketing
department's plans and actions. Under the marketing concept, all of these functions must "think
consumer:" They should work in harmony to provide superior customer value and satisfaction.
Share holders and Boards of Directors
The governing structure of large public corporations gives shareholders the opportunity to
influence a company by exercising voting rights. Traditionally, shareholders have been interested
primarily in the return on their investment and have left the actual operation of the organization
to its managers. In recent years, however, certain groups of social activities have begun
purchasing small quantities of stock for the purpose of forcing votes on controversial issues at
annual corporate meetings.

Management is responsible for the organization as a whole, a responsibility that often requires
dealing with multiple stakeholders and balancing conflicting claims. For example, shareholders
want larger returns, employees want higher wages and better benefits; local communities want
parks and day – care facilities. Therefore management must keep the relationships among key
stakeholders in balance in order to ensure the survival of the organization both in the short and
long – term.
b. Suppliers
Suppliers are an important link in the company's overall customer value delivery system. They
provide the resources needed by the company to produce its goods and services. Supplier
problems can seriously affect marketing. 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. Marketing" managers" also 'monitor the price
trends of their key inputs. Rising supply cost may force price increase that can harm the
company's sales volume.
c. Marketing Intermediaries
Marketing intermediaries help the company to promote, sell, and distribute its goods to final
buyers. They include resellers, physical distribution firms, marketing services agencies, and
financial intermediaries. Resellers are distribution channel firms that help the company find
customers or make sales to them. These include wholesalers and retailers, who buy and resell
merchandise. Selecting and working with resellers is not easy. No longer do manufacturers have
many small, independent resellers from which to choose. They now face large and growing
reseller organizations. These organizations frequency have enough power to dictate terms or
even shut the manufacturer out of large markets.
Physical distribution firms help the company to stock and move goods from their points of origin
to their destinations. Working with warehouse and transportation firm, a company must
determine the best ways to store and ship goods, balancing factors such as cost, delivery, speed,
and safety. Marketing services agencies are the marketing research firms, advertising agencies,
media firms, and marketing consulting firms that help the company target and promote its
products to the right markets. When the company decides to use one of these agencies, it must
choose carefully because these firms vary in creativity, quality, service, and price. Financial
intermediaries include banks, credit companies, insurance companies, and other’s businesses that
help finance transactions or insure against the risks associated with the buying and selling of
goods. Most firms and customers depend on financial intermediaries to finance their transactions.

Like suppliers, marketing intermediaries form an important component of the company's overall
value delivery system. In its quest to create satisfying customer relationships, the company must
do more than just optimize its own performance. It must partner effectively with marketing
intermediaries to optimize the performance of the entire system.

Thus, today's marketers recognize the importance of working with their intermediaries as
partners rather than simply as channels through which they sell their products. For example,
Coca-Cola recently signed a 10-year deal with Wendy's that will make Coke the exclusive soft
drink provider to the fast-food chain, picking up more than 700 Wendy's franchises that were
previously served by Pepsi. In the deal, Coca-Cola promised Wendy's much more that just its
soft drinks. It pledged the powerful marketing support that comes along with an exclusive
partnership with Coke.
d. Customers
The company needs to study its customer markets closely. There are five types of customer
markets: Consumer, Business, Reseller, Government and International Markets.
 Consumer markets consist of individuals and households that buy goods and services
for personal consumption.
 Business markets buy goods and service for further processing or for use in their
production process
 Reseller markets buy goods and services to resell at a profit.
 Government markets are made up of government agencies that buy goods and services
to produce public services or transfer the goods and services to others who need them.
 Finally, international markets consist of these buyers in other countries, including
consumers, producers, resellers, and governments. Each market type has special
characteristics that call for careful study by the seller.
e. Competitors
The marketing concept states that to be successful, a company must provide greater customer
value and satisfaction than its competitors do. Thus, marketers must do more than simply adapt
to the needs of target consumers. They also must gain strategic advantage by positioning their
offerings strongly against competitors' offerings in the minds of consumers.

No single competitive marketing strategy is best for all companies. Each firm should consider its
own size and industry position compared to those of its competitors. Large firms with dominant
positions in an industry can use certain strategies that smaller firms cannot afford. But being
large is not enough. There are winning strategies for large firms, but there are also losing ones.
Small firms can develop strategies that give them better rates of return than large firms enjoy.
f. Publics
The company's marketing environment also includes various publics. A public is any group that
has an actual or potential interest in or impact on an organization's ability to achieve its
objectives.
  Financial publics influence the company's ability to obtain funds. Banks, investment
houses, and stockholders are the major financial publics.
 Media publics carry news, features, and editorial opinion. They include newspapers,
magazines, and radio and television stations.
 Government publics: Management must take government developments into account.
Marketers must often consult the company's lawyers on issues of product safety, truth in
advertising, and other matters.
 Citizen action publics: A company's marketing decisions may be questioned by
consumer organizations, environmental groups, minority groups, and others. Its public
relations department can help it stay in touch with consumer and citizen groups.
 Local publics include neighborhood residents and community organizations. Large
companies usually appoint a community relations officer to deal with the community,
attend meetings, answer questions, and contribute to worthwhile causes.
 General public: A company needs to be concerned about the general public's attitude
toward its products and activities. The public's image of the company affects its buying.
 Internal publics include workers, managers, volunteers, and the board of directors.
Large companies use newsletters and other means to inform and motivate their internal
publics. When employees feel good about their company, this positive attitude spills over
to external publics.
A company can prepare marketing plans for these major publics as well as for its customer
markets. Suppose the company wants a specific response from a particular public, such as
goodwill, favorable word of mouth, or donations of time or money. The company would have to
design an offer to this public that is attractive enough to produce the desired response.
g. The Media
In today’s business, nothing remains secret or hidden from the media.
Everything that the business does is known and exposed by the media. The
media has the power to expose these activities of the company to the public
or customers. This will affect the company positively or negatively depending
on the nature of the activity of the business.
h. Financial Institutions
Finance is the lifeblood of every business. As such the financial problems of
the marketers are solved by the acts of the financial institutions. The
availability of finance for loan, its interest rates, collateral required, etc. can
be considered.
i. Special Interest groups
These include the different groups that promote the interest of certain
groups. The interests of the groups such as: those who protect the wild life,
who animals, the disabled, or any disadvantaged groups in a society.
j. Government
The different government agencies that promote or restrict the marketer’s
activities can be considered here. These government agencies include such
agencies as:
 Revenues authority
 Customs authority
 Trade and tourism bureau
 etc

Internal Environment
Strictly speaking, internal stakeholders are not part of the organization’s environment; they are
part of the environment for which an individual marketing manager is responsible. They are
groups or individuals, such as employees, which are not strictly part of an organization's
environment but for whom an individual manager remains responsible.
 Employees
The nature of the work force is changing in most organizations, in part because of demographic
factors. The skills needed by employees are also changing. The relationship between employees
and employers should not be a master and servant relationship; rather it must be a partnership
relation. The organization survives because employees have contributed their skills and abilities
towards the success of the organization. In the other hand it is the employer who has sacrificed
its capital and creates an organization and job opportunities to the employees.

The Marketing Manager

The marketing manager’s vision innovativeness and strategy determines the success of an
organization. Visionary and innovative managers are looking for new and better things in their
day to day activities. This is important in a competitive environment of today.

The Position of the Marketing Department in the Organization

Organization structure is designed in such a way that the different activities of the organization
are given a due attention. The more important the activity is, the higher position of that activity
in the hierarchy of the organization. The higher the position the more influential it becomes in
strategy and policy issues in the company. Therefore, the position of the marketing department in
the organization structure determines the role of the department in the success of the marketing
activity. Marketing Strategies, Goals and Objectives also affect the

Synopsis of lecture
 External micro environment (so called because they affect a particular firm) consists of
suppliers, marketing intermediaries, and customers.
 The Micro Marketing Environment
 Elements of the Micro Marketing Environment
o The Company
o Suppliers Environment
o Competitors Environment
o Customers Environment
o Marketing Environment
o Public
 Internal forces that are controllable also shape an organization's marketing system by
management.
 These internal influences include a firm's production, financial, and personal activities.
 Other non-marketing forces are the company's location, its research and development
(R&D) strength, and the overall image the firm projects to the public.

Discussion questions/ activities

 Define the microenvironment.
 Discuss the elements of marketing environment.
 Discuss the elements of the internal environment.