2
2 The Marketing
Environment
Elaine Collinson
The marketing environment is defined as those actors and forces external to the firm’s
marketing management function, which have the potential to affect the business’ ability
to successfully develop and maintain transactions with its customers. (Kotler, 1998). The
factors affecting how well a company meets its customer needs are a combination of the
external forces, which dictate the operating environment of the business and the inter-
nal organizational pressures, which determine the nature of responses to those forces.
Internal environmental forces tend to be of a more controllable nature than external
forces. The external environment consists of a number of factors with degrees of influ-
ence at different stages in a product’s life or a company’s development.
Environmental analysis
All relevant external forces should be analysed as part of an ongoing planning
process, in order to identify any changes in the operating environment, which
could either represent a threat to the firm’s current position or an opportunity to
gain additional competitive advantage. This process is known as environment
scanning or analysis.
External forces
The external forces, also known as the macro environment, are often outside the
control of the firm:
Internal forces
The internal forces, or the micro environment, focus on the organization itself
and how its characteristics and composition influence the ways it responds to the
target market. It also considers how it is portrayed to the target market.
