Principal actors in the company's

Principal actors in the company's

Figure 4.1

microenvironment

groups form the internal environment (see Figure 4.2). Top management sets the company's mission, objectives, broad strategies and policies. Marketing managers must make decisions consistent with the plans made by top management, and marketing plans must be approved by top management bel'ore they can be implemented.

Marketing managers must also work closely with other company depart­ ments. Finance is concerned with finding and using funds to carry out the marketing plan. The R & D department focuses on the problems of designing safe and attractive products. Purchasing worries about getting supplies and materials, whereas manufacturing is responsible for producing the desired quality and quan­

tity of products. Accounting has to measure revenues and eosts to help marketing know how well it is achieving its objectives. Therefore, 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 customer' and they should work together to provide superior customer value and satisfaction.

suppliers

Suppliers

Firms and individuals that provide the

Suppliers are an important link in the company's overall customer 'value delivery resources needed by ilie company and its

system". They provide the resources needed by the company to produce its goods competitors to produce and services. Supplier developments can seriously affect marketing. Marketing

goods and services. managers must watch supply availability ­ supply shortages or delays, labour

strikes and other events can cost sales in the short run and damage customer marketing [Satisfaction in the long run. Marketing managers must also monitor the price

intermediaries

trends of their key inputs. Rising supply eosts may force price increases that can Firms that help the harm the company's sales volume.

company to promote, sell and distribute its goods to final buyers; they

Marketing Intermediaries

include physical distribution firms,

Marketing intcrmcdiaries are firms that help the company to promote, sell and marke ting­service distribute its goods to final buyers. They include resellers, physical distribution

agencies and financial firms, marketing services agencies andfinancial intermediaries. Resellers are

intermediaries. distribution channel firms that help the company find customers or make sales to

then). These include wholesalers and retailers which buy and resell merchandise. resellers Selecting and working with resellers is not easy. No longer do manufacturers have The individuals and organisations that buy

many small, independent resellers from which to choose. They now face large and goods and services to growing reseller organizations. These organizations frequently have enough

resell ar a profit power to dictate terms or even shut the manufacturer out of large markets.

148 • Chapter 4 The Marketing Environment

Figure 4.2

The company's internal environment

physical distribution Physical distribution firms help the company to stock and move goods from firms

their points of origin to their destinations. Working with warehouse and trans­ Warehouse,

portation firms, a company must determine the best ways to store and ship goods, transportation and other

balancing such factors as cost, delivery, speed and safety.

firms thai help a Marketing services agencies are the marketing research firms, advertising company to stock and agencies, media firms and marketing consultancies that help the company target move goods from their

points of origin to their and promote its products to the right markets. When the company decides to use

destinations. one of these agencies, it must choose carefully because the firms vary in creativity, quality, service and price. The company has to review the performance

marketing services of these firms regularly and consider replacing those that no longer perform well. agencies

Financial intermediaries include banks, credit companies, insurance com­ Marketing research

panies and other businesses that help finance transactions or insure against the firms, advertising

risks associated with the buying and selling of goods. Most firms and customers agencies, media firms,

depend on financial intermediaries to finance their transactions. The company's marketing consulting

marketing performance can be seriously affected by rising credit costs and limited firms and other service

credit. For example, small and medium­sized businesses in the United Kingdom providers that help a

have often found difficulty in obtaining finance for market and product develop­ company to target and

ment activities. Many such businesses blame this on the insupportive financial promote its products to

the right markets. system in the UK. In marked contrast, the Japanese kieretsu system favours

lower­cost financing for both large and small companies that form part of the financial intermediaries

informal network of banking, trading and commercial organizations within the flanks, credit

Itieretsu, Whether or not businesses enjoy the support of a favourable financial companies, insurance

system, individual businesses must be aware of financial organizations' impact on companies and other

marketing effectiveness. For this reason, the company has to develop strong re­ businesses that help

lationships with the most important financial institutions.

finance transactions or Like suppliers, marketing intermediaries form an important component of insure against the risks

the company's overall value delivery system. In its quest to create satisfying associated e usith the

customer relationships, the company must do more than just optimize its own buying and selling of

performance. It must partner effectively with suppliers and marketing intermedi­ goods.

aries to optimize the performance of the entire system.