In the 21st century, the marketing environment is one of complexity and organizations face many challenges in developing marketing strategy. The external environment of an organization is increasingly characterised by change and uncertainty. Customers, the critical assets of companies, have higher and higher expectations for quality, service and value. In certain business markets, customers view suppliers as strategic partners looking to them to provide thoughtful leadership, creativity and innovation. Developing distinct capabilities that are hard for competitors to imitate therefore becomes a priority for competitive advantage. For many organizations, in a recessionary climate, the search for increased market share and growth means expansion beyond home markets into international markets. These are just some of the challenges

How then do organizations develop strategies in a complex marketing environment? How do they assess opportunities and threats? Which markets and segments do they target and why? Which market positions play to an organization's strengths? What product portfolio should be maintained for long-term value? These are some of the questions we shall address

We commence by examining what is meant by markets, products and market segments, and then go on to examine how the marketing environment can be assessed. The marketing environment consists of an organization's external environment as we well as its internal environment. The external environment can be sub-divided into macro and micro environment. By macro environment we mean the broader national and global influences that have the potential to impact a business - political changes, socio-cultural changes, technological innovations, economic cycles, taxation changes and demographic changes. The micro environment, on the other hand, is the environment of the industry or business sphere within which the organization operates - customers, suppliers, competitors, possible new entrants to the industry and strategic partners. The internal environment of an organization consists of all factors that are within it - factors such as organizational structure, leadership and management style, organizational culture, the skills of its people and organizational capabilities. An assessment of the marketing environment gives a view on the opportunities as well as the threats to the organization