In designing marketing plans, marketing management takes other company groups into account—groups such as top management, finance, research and development (R&D), purchasing, operations, human resources, and accounting. All of these interrelated groups form the internal environment. Top management sets the company’s mission, objectives, broad strategies, and policies. Marketing managers make decisions within these broader strategies and plans. Then, as we discussed in Chapter 2, marketing managers must work closely with other company departments. With marketing taking the lead, all departments—from manufacturing and finance to legal and human resources—share the responsibility for understanding customer needs and creating customer value.

Suppliers form an important link in the company’s overall customer value delivery network. 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 and costs. Supply shortages or delays, natural disasters, and other events can cost sales in the short run and damage customer satisfaction in the long run. Rising supply costs may force price increases that can harm the company’s sales volume.

Most marketers today treat their suppliers as partners in creating and delivering customer value. For example, Honda knows the importance of building close relationships with its extensive network of suppliers, who furnish everything from fuel tanks, brake controls, and seating systems to production equipment and office supplies.2

In the United States alone, American Honda purchases more than $23 billion worth of auto parts and materials annually from 557 strategic suppliers in 34 states. It spends billions of dollars more on maintenance, repair, and operations (MRO) supplies and services from another 16,800 suppliers. Outside purchases represent about 75 percent of the cost of making a Honda vehicle. So Honda views strategic suppliers as key players in its success and develops deep relationships and teamwork with them. “These suppliers are literally considered extensions of Honda,” says one insider.

For example, Honda requires that strategic suppliers open up their books and give Honda full access to their financial information. This helps Honda purchasing associates, Honda engineers, and supplier engineers to work as a team to achieve target costs and quality standards, often improving suppliers’ performance and profit margins in the process. Supplier personnel also participate in Honda training programs on leadership, finance, quality, and other topics. And Honda meets formally each year with strategic suppliers to review the previous year’s results and set goals for the coming year. As a result of such teamwork, Honda has developed healthy, long-term supplier relationships. “Almost 100 percent of the original suppliers selected in the late 1980s are still Honda suppliers today,” says the insider. In a recent industry survey, automotive suppliers rated Honda the “most preferred” customer among the world’s top six auto manufacturers.

Marketing intermediaries help the company promote, sell, and distribute its products 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 that buy and resell merchandise. Physical distribution firms help the company stock and move goods from their points of origin to their destinations. 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. Financial intermediaries include banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods.

Like suppliers, marketing intermediaries form an important component of the company’s overall value delivery network. 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, when Coca-Cola signs on as the exclusive beverage provider for a fast-food chain, such as McDonald’s, Wendy’s, or Subway, it provides much more than just soft drinks. It also pledges powerful marketing support:3

Coca-Cola assigns cross-functional teams dedicated to understanding the finer points of each retail partner’s business. It conducts a staggering amount of research on beverage consumers and shares these insights with its partners. It analyzes the demographics of U.S. zip code areas and helps partners determine which Coke brands are preferred in their areas. Coca-Cola has even studied the design of drive-through menu boards to better understand which layouts, fonts, letter sizes, colors, and visuals induce consumers to order more food and drink. Based on such insights, the Coca-Cola food service solutions group develops marketing programs and merchandising tools that help its retail partners improve their beverage sales and profits. Its website, www.CokeSolutions.com, provides retailers with a wealth of information, business solutions, merchandising tips, advice on digital and social media marketing, and techniques on how to go green. “At Coca-Cola we always strive to be our customers’ most valued partner,” says Coca-Cola’s vice president of Foodservice Customer Marketing. Such intense partnering has made Coca-Cola a runaway leader in the U.S. fountain-soft-drink market.

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 with 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. And small firms can develop strategies that give them better rates of return than large firms enjoy.

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. We can identify seven types of publics:

• Financial publics. This group influences the company’s ability to obtain funds. Banks, investment analysts, and stockholders are the major financial publics.

• Media publics. This group carries news, features, editorial opinions, and other content. It includes television stations, newspapers, magazines, and blogs and other social media.

• 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.

• Internal publics. This group includes 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 the companies they work for, this positive attitude spills over to the external publics.

• 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 behavior.

• Local publics. This group includes local community residents and organizations. Large companies usually work to become responsible members of the local communities in which they operate.

For example, home-improvement retailer The Home Depot gives back to its local publics through its charitable giving arm, The Home Depot Foundation:4

The Home Depot Foundation has a simple mission: Improve the homes and lives of people. Through its support for local nonprofits, grants, and countless employee volunteer hours, the foundation focuses on repairing and refurbishing homes and facilities for veterans in addition to natural disaster relief. For example, when natural disasters strike, The Home Depot Foundation provides disaster relief supplies, resources, and volunteers to help rebuild homes and communities. It also awards Community Impact Grants to fund local community projects.

The Home Depot Foundation is now placing a special emphasis on helping military veterans who face growing financial and physical hardships at home as they return to civilian life. The goal is “to ensure every veteran has a safe place to call home.” To that end, the foundation provides Veteran Housing Grants to nonprofits that help develop and repair housing for veterans. And through Team Depot—the company’s employee-led volunteer program—dedicated Home Depot employees volunteer their time in local communities to create a meaningful impact on veterans’ lives. “From retrofitting a wounded warrior’s home to helping make a housing facility move-in ready,” says the company, “our Team Depot associates work with local nonprofit organizations to improve the homes and lives of thousands of deserving veteran families.” Since its establishment in 2002, The Home Depot Foundation has invested more than $380 billion in its local communities.

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 and social sharing, 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.

Customers are the most important actors in the company’s microenvironment. The aim of the entire value delivery network is to engage target customers and create strong relationships with them. The company might target any or all of five types of customer markets. Consumer markets consist of individuals and households that buy goods and services for personal consumption. Business markets buy goods and services for further processing or use in their production processes, whereas reseller markets buy goods and services to resell at a profit. Government markets consist 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.