Module 2- CHAPTER 3, Week 7,

Lesson 7 – Scanning The

Marketing Environment

OBJECTIVES
At the end of the lesson, the students will be able to:
✓ identify the actors and forces that affect a business in serving its customer.
✓ appreciate the significance of environmental scanning and analysis
✓ evaluate the impact of environmental forces in marketing decisions.
✓ understand how social responsibility can affect business

KEYWORDS
Scanning the Environment

Marketing Environment

Microenvironment

Macro environment

Resellers

Suppliers

Competitors

Intermediaries
Module 2 - CHAPTER 3 Week 7, Lesson 7-Scanning the Marketing Environment

PRE-TEST

Direction: Write TRUE or FALSE in the blank before each number.

_______ 1. The marketing environment consists of the actors and forces outside marketing that
affect marketing management’s ability to build and maintain successful
relationships with target customers.

_______ 2. Marketing environment consists both micro and macro environment.

_______ 3. The microenvironment consists of the actors close to the company that affect its
ability to serve its customers

_______ 4. The customers are the primary focus of the marketing environment.

________ 5. Resellers are distribution channel firms that help the company find customers &
make sales to them. It includes wholesalers and retailers who buy and resell
merchandise.

INTRODUCTION
Environmental scanning is a constant and careful analysis of the internal and
external environment of an organization in order to detect opportunities, threats, trends,
important lessons, and weaknesses which can impact the current and future strategies of the
organization. It requires members of an organization to look externally and identify prominent
lessons, trends, opportunities, or threats that can adversely affect the company. No successful
company can survive and grow without a well-researched and clearly articulated strategy

Environmental scanning is an important part of the business process as it is the responsibility of

an organization to keep a check on things which can put negative impacts on their business and
their consumers. The members of the organization look for the prominent internal and external
threats which adversely affect the organization. Not only the issues which directly impact their
consumers and suppliers but also the issues which impact the competitors and overall
environment of the industry are scanned and new strategies are developed to deal with these
issues.

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Module 2 - CHAPTER 3 Week 7, Lesson 7-Scanning the Marketing Environment

Lesson 7: Scanning the Marketing Environment

In this lesson, we’ll look

deeper into the first step of
the marketing process –
understanding the
marketplace and customer
needs and wants.

We’ll discover that

marketing operates in a
complex and changing
environment.

Marketing Environment includes the actors and forces outside marketing that affect
marketing management’s ability to build and maintain successful relationships with target
customers.
• To develop effective marketing strategies, we must first understand the environment in
which marketing operates.
• The marketing environment represents a mix between internal and external forces which
surround an organization
• It has an impact especially the company’s ability to build and maintain successful
relationship with target customers.

Fig. 3 Marketing Environment Factors

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Module 2 - CHAPTER 3 Week 7, Lesson 7-Scanning the Marketing Environment

*MICROENVIRONMENT (Internal Factors)

It refers to the forces closely influencing the company and directly affecting the organization's
relationships.

COMPANY
• Marketing managers must work directly with other company departments
• In designing marketing plans, marketing management takes other company group into
account.
• They are top management, finance, R&D, purchasing, operation and accounting. All of
these interrelated groups from the internal environment.
• Top management sets the company’s mission, objectives, broad strategies, and policies for
the company.
• The entire department must work together in order to achieve the company objective – to
provide superior customer value & relationships.

SUPPLIERS
• Most companies understand the importance of creating close relationships with its
suppliers
• Essential link in the company’s overall customer value delivery network.
• Suppliers provide the resources needed in producing goods and services.
• Marketing managers must watch supply availability and costs.
• Supply shortages or delays will seriously affect marketing.
• Most marketers nowadays treat their suppliers as partners in creating & delivering
customer value.

MARKETING INTERMEDIARIES
• Assist the company, promote, sell, and distribute products to its unlimited buyers.
• Like suppliers, marketing intermediaries is an essential element of the company’s general
value delivery network
• Intermediaries are firms that help the company to promote, sell and distribute its goods
to final buyers.

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Module 2 - CHAPTER 3 Week 7, Lesson 7-Scanning the Marketing Environment

a) Resellers
- They are distribution channel firms that help the company find customers &
make sales to them. It includes wholesalers and retailers who buy and resell merchandise.

b) Physical Distribution Firms

- Help the company to stock and move goods from their points of origin to their
destinations. E.g. warehouse

c) Marketing Services Agencies

- Marketing research firms, advertising agencies, media firms & marketing
consulting firms that help the company target & promote its products to the
right markets.

d) Financial Intermediaries
- Financial intermediaries are institutions such as bank, credit companies and
insurance companies.
- These institutions help finance transactions or insure against the risks
associated with the buying and selling of goods.

COMPETITORS
• Any person or entity which is a rival against each other.
• In business, a company in the same industry or a similar product or service
• To achieve strategic advantage by situating their offerings better than competitors’
offerings.
• Cautious marketing decisions must factor in competitors like their most likely number and
how good they are at what they do will affect the marketing plans.
• If for instance, competitors are able to offer their product for a much lower price, they
should give emphasis that the product has higher quality, better or lasts longer. If there are
few or no local competitors, a company is free to expand into new markets.

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Module 2 - CHAPTER 3 Week 7, Lesson 7-Scanning the Marketing Environment

PUBLIC
• A group that has a genuine or possible interest in or influence on an organization’s ability
to attain its objectives.

1. Financial publics – ability to acquire funds like banks, investment, and stockholders
2. Media publics – news, features, and editorial opinion (newspaper, magazines, TV, blogs,
and other internet media)
3. Government publics – government developments: product safety, truth in advertising
4. Citizen-action publics – consumer organization, environmental groups
5. Local publics – local residents and community organizations
6. General publics – general public’s attitude on its products and activities
7. Internal publics – workers, managers, volunteers, and board of directors

CUSTOMER
• an individual or business that purchases the goods or services produced by a business
• All business aim to produce profit through serving the customer demand
• Today marketing of a company starts and also ends with the customers
• Customer satisfaction is the bottom line for company’s success.

*MACROENVIRONMENT (External Factors)

- A larger societal forces that affect the microenvironment – demographic, economic,
natural, technological, political, and cultural forces.

1. Demographic Environment
- The study of human populations in terms of size, density, location, age, gender, race,
occupation and other statistics.
- Demographic is one of the most important elements in marketing macro environment
because it involves people and people make-up markets.

2. Economic Environment
- Factors that affect consumer buying power and spending patterns.
- Changing in income poses influences on how consumers spend their money.
- For example, if consumer’s income increases, they will buy luxurious goods more,
spending on convenience products will decrease at the same time.
-Represent the wider economy and consist of external factors in a business’ market and
the broader economy that can influence a business. Ex. Interest rates and monetary
policies, Exchange rates and Inflation rates.

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Module 2 - CHAPTER 3 Week 7, Lesson 7-Scanning the Marketing Environment

3. Environmental forces

- Include all those that influence by the surrounding environment

- Natural resources are the elements that are needed as input by the marketers or the
elements that are affected by marketing activities
- Marketers should be aware of several trends in the natural environment.
Ex. Increased pollution: Government will intervene if the production activities
endangered the environment.

4. Technological Environment

- Forces that create new technologies, creating new product and market opportunities.
- Technology may help a company to increase its productivity, thus company should pay
a close attention to the technology as these elements will help them to flourish. If a
business does not pay a close attention to technology; they may be left behind.
Ex. Android and Apple rivalry in terms of improving phone features

5. Political & Social Environment

- Includes laws, government agencies & pressure groups that influence and limit various
organizations & individuals in a given society.
- Marketers should be aware of the law and legislation imposed by the government,
agencies and regulating bodies. Ex. Price changes in the world market-oil, gas, goods.

6. Cultural Environment

- Institutions & other forces that affect society’s basic values, perceptions, preferences,
and behaviors.
- Marketers should be aware with the cultural values of their target market.
Ex. Separation of Church and State: Contraceptive Products, selling of Hijab in Muslim
countries

CHECK YOUR UNDERSTANDING

Short bond paper - Choose 1 local business in your area (for example, a bakery,
laundry or carwash) that you will examine. Identify the Microenvironment and
Macro environment forces and its potential business opportunity and threats.

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Module 2 - CHAPTER 3 Week 7, Lesson 7-Scanning the Marketing Environment

UNDERSTANDING COMPETITIVE FORCES THROUGH THE FIVE FPRCES ANALYSIS

Competition is an important aspect of business and is present in all markets. It is important for
marketers to understand the nature of competition within their respective business environments.

Porter’s Five Forces Analysis is a framework used to analyze the nature and level of competition
within an industry. This tool helps a marketer understand the strengths of the competing
organizations, determine the present status of the organization, and identify the best possible
position that it can occupy in the market. It also helps marketers determine if a new product or
service can be profitable.

Fig. 4 Five Competitive Forces

Porter’s Five Forces Analysis
1. The entry of competitors – How easy or difficult is it for new business to enter the market?
2. The threat of substitutes – How easily can our products is substituted by an existing product
on the market?
3. Bargaining power of buyers – How strong is the influence of buyers on the company? Can
they work together to drive down our prices?
4. Bargaining power of suppliers – How strongly can suppliers influence the prices of resources
and materials? Is there only one supplier or are there many? Are here other potential
suppliers?
5. Competitive rivalry – Is there strong competition among existing players? Is there a dominant
player, or are all businesses equal in strength?

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Module 2 - CHAPTER 3 Week 7, Lesson 7-Scanning the Marketing Environment

ACTIVITY 7.1
Direction: Answer Page 72 of your Book - Five Forces Analysis and the Market for Online
Education

Analyze the following statements regarding the online education industry. Make a Five Force
Model and place the statements in the appropriate space in the model corresponding to a
competitive force.

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Module 2 - CHAPTER 3 Week 7, Lesson 7-Scanning the Marketing Environment

REMEMBER
• Businesses operate in a dynamic market. A company’s marketing environment consists of
outside forces that affect the organizations ability to build and maintain successful
relationships.

• Marketing Environment includes the actors and forces outside marketing that affect
marketing management’s ability to build and maintain successful relationships with target
customers.

• Microenvironment are the actors and forces outside marketing that affect marketing
management’s ability to build and maintain successful relationships with target customers.

• Macro Environment A larger societal forces that affect the microenvironment –

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

• Marketing intermediaries assist the company, promote, sell, and distribute products to its
unlimited buyers.

• Porter’s Five Forces Analysis is a framework used to analyze the nature and level of
competition within an industry. This tool helps a marketer understand the strengths of the
competing organizations, determine the present status of the organization, and identify the
best possible position that it can occupy in the market. It also helps marketers determine if
a new product or service can be profitable.

POST-TEST
List down the actors that belong to the following.

Macroenvironment Microenvironment

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