The marketing environment can be divided into two groups.
1. The Company’s Micro Environment
2. The Company’s Macro Environment
A. The Micro Environment
These are the actors and forces which are close to the company. These can be further divided into several groups.
1. The Company
This refers to the relationship of the the marketing management with other groups or departments of the company. Marketing managers take into account considerations of other departments and prepare the marketing plan in line with their policies. The company other groups may be:
A good and consistent chain of supply is important for marketing management. Marketing managers need to constantly monitor the costs, delivery, value of goods and other input related variables.
These are the forces or actors which promote the company’s good to final buyers. These may include financial agents, transporters and other firms.
These are the groups of people who buy the company’s products for their own use. These can be further divided into
Consumer market of individuals and households
Business markets for further use or their own use such inputs etc.
Institutional markets such as schools, hospitals, nursing homes, prisons etc.
It refers to other players in the same market. The purpose of the marketing is not to simply satisfy the customer but to serve him better than competition.
This may include any group that have an interest in the company. Banks, media, government, general public, and employees are some of the groups that can be classified under the heading of publics.
B. the Macro environment
The macro environment of the company refers to all those outside factors and forces which operate in the larger environment of the company. These may be classified such as:
1. Demographic Environment
This is to examine human population and its features in a particular country, area or city etc. It is the analysis of size, density, age, sex, race, income and other related features. Population changes with the advancement of time. A time of joint family has changed to a family of couples with one or two children. New sexual orientations are being recognized. Education is spreading across the world and diversity is on the rise. The reduction of mortality rate, the changing family structure and greater diversity are the factors which marketing managers need to pay attention to.
2. Economic Environment
Income distribution, purchasing powers and buying patterns are the actors within the economic environment. Developing countries may rely on the agricultural output with low income whereas industrial countries have higher income. Underdeveloped countries may depend on other affluent economies. Growth of international trade, potential in overseas markets, economic instability in some countries, income disparities, changing patterns of buyers behaviours are some some of the most important factors in the economic environement.
3. Natural Environment
It refers to the availability of natural resources that marketer’s need and which can affect the activities of the marketing managers. Recently environmentalism or concerns for environment has drawn special attention from governments and general public. Marketers need to strictly some of the grown trends such as:
Shortages of raw materials
High Costs of energy
4. Technological Environment
This refers to the technological change with the scientific progress and development. Technology has been fast changing and new developments such as advance computer systems, hardware, software, engineering and automation processes. Technological advancement has increased production considerably. New markets and opportunities have developed. Innovations require new budgetary limits for Research and Development. Marketers need to understand the new technological environment and the increased regulations of the governments.
5. Political Environment
Business legislation, public interests, political stability, change of government policies, government regulations and various other official policies are the areas that marketers must be aware of. Governments enact business legislation for a number of reasons such as protecting companies, consumer protection, protecting the interest of social society, conforming to trade and fiscal policies etc. More recently, the demand for marketing ethics has increased. Various groups actively strive to seek solutions for environmental protections issues. Emphasis on ethics and socially responsible actions has grown. Pressure groups have forced governments to pass legislation which are more in conformity with the concept of societal marketing.
6. Cultural Environment
This refers to the forces which affect the values, preferences and perceptions of society. People may have core and secondary beliefs: the former usually resistant to change while the later are more elastic and open to change. Understanding of cultural environment is of paramount importance. What is considered as good in one culture may be just the opposite in another culture and vice versa.
The company’s environment thus consists of micro and macro environments. The macro environment consists of all the external forces of the big picture. PEST analysis is an effective tool and model for understanding and evaluating the macro environment of the company. The microenvironment, on the other hand, refers to the actors and forces which are near to the company. Marketer’s managers must understand both the micro and macro environments to effectively handle the company’s marketing strategies. The marketing environment is relevant to all types of companies, large or small. International companies require to analyse global environment changes.
Points to Remember
1. What is the Company’s Environment?
2. Definition of Micro and Macro Environment.
3. Examples of Marketing Environment.
4. External Actors and Forces.
5. Internal Actors and Forces.
6. Impact of Marketing Environment
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