The Marketing Environment
• The actors and forces outside marketing that affect marketing management ability to build and maintain successful relationship with target customers.
• The environment continues to change rapidly and both customers and marketer’s wonder what the future will bring is called marketing environment.
The environment, where found consumers, marketers, marketing researchers, marketing intelligence and some other engaged in marketing process & goods or product is being supplied, is known as marketing environment.
The entire marketing environment classified into two areas:
1) Micro Environment.
2) Macro Environment.
1) Macro- Environment:-
Definition: Macro Environment can be described as the collection of those factors and conditions, which has the capability of influencing the business positively or negatively.
Major external and uncontrollable factors that influence an organization's decision making, and affect its performance and strategies.
These factors include the
• Economic,
• Demographics,
• Legal,
• Political, and social conditions,
• Technological changes, and
• Natural forces is known as macro environment.
Elements of Macro-Environment :-
1) Political-Legal Environment
2) Economic Environment
3) Socio-Cultural Environment
4) Technological Environment
5) Demographic Environment
6) Global Environment.
1) Economic Environment :-
Marketers require buying power as well as people.
The economic environment consists of factors that affect consumers’ purchasing power and spending power/ patterns.
Marketers must pay close attention to major trends and consumers’ spending patterns.
The economic environment encompasses a number of factors such as nature and structure of the economy, availability of resources, level of income, GDP, rate of inflation, degree of economic development, distribution of income, factors of production, economic policies, economic conditions, monetary policy, fiscal policy, licensing policy, etc. which influences the business of a firm.
2) Political-Legal Environment :-
Marketing decisions are strongly affected by developments in the political environment.
Political environment consists of laws, government agencies, government itself and pressure groups that influence or limits various organizations and individuals in a given society
Political Environment covers the actions of the government, that have a bearing on the company’s operations. Further, the span of implementation of these actions i.e. Local level, state-level or national level, is significant in this regard.
The top management of the company has to keep a close watch on the actions of the government to take decisions accordingly.
It can be influenced by bureaucracy, tariffs, trade control, corruption level, tax policy, competition regulation and changes in different laws
These laws may include minimum wage laws, worker safety laws, company law, union law, etc.
Legislation Regulating Business :
Now a day’s controlling act has beenincreased. There are three reasons. That’s Are-
• To protect the company
• Save consumer against unfair performance of producers
• Save the society against dishonest business man.
• Changing Government Agency Enforcement
• Increases in Public Interest Group
3) Technological Environment :-
The technological environment is perhaps the most dramatic forces now shopping own destiny.
Technological environment involves forces that create new technologist creating new product and marketing opportunities.
Technology is updating every second and to keep the business going in the long run, the firm has to put efforts to go side by side with the changing technology. How much firm is focusing on innovation and research and development plays a great role in its success, because it can make the firm first and fast mover, in that technology.
The factors included are a type of technology presently in use, technological development level, technology policy, suitable technologies, the rate at which new technologies are adopted and diffused.
4) Demographic Environment :-
Demographic Environment covers the type, size and growth rate of population in the area in which the business operates. It discusses the education level, household patterns, age distribution, regional characteristics, level of income, level of consumption of the population.
Here, it must be noted that the marketing mix and the product type the organization introduces, largely depends on the demographic environment.
The pricing, distribution and promotional strategies are also based on the demography itself.
5) Socio-Cultural Environment:-
The cultural environment is made up of institutions and other forces that affect a society’s basic values, perceptions, preferences and behaviors.
There are few cultural values which affect marketing decision making.
These are, persistence of cultural value, shifts in secondary cultural value, people views of organization/ others, etc.
Society and Culture are an important part of the business environment. It won’t be wrong to say that society shapes the norms beliefs, values, attitude, and principles in the people, in which they are raised.
When we are talking about culture, we are stressing on the dance, drama, music, food, lifestyle and festivals. It also includes arts, law, morals, customs, traditions and habits. Goods and services bought and sold, highly depends on the culture prevalent in the region. Moreover, it also describes the attitude of people towards work.
• Persistence of Cultural Values
• Sub-cultures
• People’s view of others
• Shifts in secondary cultural values
• People’s view of themselves
• People’s view of organization
• People’s view of society
• People’s view of nature /People’s view of universe.
6) Natural Environment :-
The natural environment involves the natural resources that are needed as inputs by marketers or they are affected by marketing activities.
Environmental concerns have grown steadily during the past three decades.
Marketers should be aware of several trends in the natural environment
• Shortage of Raw Material
• Increase Cost of Energy
• Increase of Pollution
• Government in Natural Resources Management
(2) THE MICRO-ENVIRONMENT
Definition: Micro Environment refers to the environment comprising of all the actors of an organization’s immediate environment which influences the performance of the company, as they have a direct bearing on the firm’s regular business operations.
• The micro-environment affects the organization directly.
• It refers to the environment that most closely linked to the firm.
• This environment is also not under the full control of business.
The business can influence this environment.
Elements of Micro-Environment:-
1) Competitors
2) Suppliers
3) Customers
4) Intermediaries
5) Shareholders
6) Employees
7) Media.
1) Customers :-
Customers are the actual buyer of our goods and services
The success of the organization greatly depends on how effectively the firm fulfils the needs and wants of the customers, which is profitable to the firm and also provides value to the customer.
The firm needs to analyze what the customers expect from their products and services so that the firm can satisfy them.
It must be noted that without customers no business can survive for a long time. So, the primary objective of the firm is to create and retain customers, to keep itself going.
2) Suppliers:-
Suppliers are firms and individuals that provide the resources needed by the company.
The are an important link in the company’s overall customer “value delivery system’’
TIMELY+ PRICE +QUALITY =RIGHT PRODUCT’
Suppliers have the power to change the firm’s position in the market and its capabilities.
The relationship amidst the firm and its suppliers represents a power equation, based on the industry conditions and their dependence on each other.
3) Competitors:-
Conducting competitor analysis is critical for success of the firm.
A marketer must monitor its competitors offering to create strategic advantage.
competitor analysis also helps in maintaining or improving market share and position.
Competition is what keeps the firm thriving. Competitors are the rival sellers operating in the same industry.
It must be noted that the nature and intensity of competition highly influence the firm’s products and services.
Product Differentiation is something that helps the firm to beat the cut-throat competition in the market.
4) Marketing Intermediaries :-
Intermediaries refer to marketing intermediaries which cover agents, reseller ,merchants, distributors, dealers, wholesalers, physical distribution firm, Marketing services agencies, financially intermediaries etc. that participate in the company’s supply chain, in stocking and transporting the goods from their source location to their destination.
It acts as a link between the business organization and the ultimate consumer.
5) Shareholders :-
Shareholders are the real owners of the company who invest their money in the company’s business, by purchasing the shares, for which they are paid a dividend every year as a return. Shareholders have the right to vote in the company’s general meeting.
6) Employees :-
Placing the right person at the right job and retaining them for the long term by keeping the staff motivated is very important for the strategic planning process.
Training and development act as a guide to the firm’s employees which ensures an up-to-date workforce.
A qualified and competent workforce can help the firm to achieve success with little efforts.
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