Marketing Environment
Definitions of Marketing Environment
Marketing Environment is the combination of external and internal factors and forces that affect the company’s ability to establish a relationship and serve its customer. The marketing environment of a business consist of an internal and external environment.
The internal environment is company-specific and includes owner, worker, machine, materials etc.
The external environment is further divided into two components: micro and macro.
The micro or the task environment is also specific to the business, but it external. It consists of factors engaged in producing, distributing and promoting and offering.
The macro or the broad broad environment includes larger societal forces which affect society as a whole. It is made-up six components: demographic, economy, physical technology, political-legal and social-cultural environment.
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Components of Marketing Environment
The marketing environment is made-up of the internal and external environment of the business. While the internal environment can be controlled, the business has less or no control even over the external environment.
1. Internal environment:-
The internal environment of the business includes of the forces and factors inside the organization which affect its marketing operation. These components can be grouped under five MS of the business, which are:
a) Men:- The people of organisation including both skill and unskilled workers.
b) Minutes:- Time taken for the processes of the business to complete.
c) Machinery:- Equipment required by the business to facilitate or complete the processes.
d) Materials:- The factors of production or supplies required by the business to complete the processes or production.
e) Money:- Money is the financial resources used to purchase machinery, materials and pay the employees.
2. External Environment:-
The external environment constitute factors and forces which are external to the business and on which the marketer has little or no control. These external environment is of two types:
i) Micro marketing environment.
ii) Macro marketing environment.
i) Micro marketing environment:-
The micro-components of the external environment is also known as the task environment. It comprise external forces and factors that are directly related to the business. These include suppliers, market intermediaries, customers, partners, competitors and the public.
- Suppliers include all the parties which provide resources needed by the organisation.
- Market intermediaries include parties involved in distributing the product or services of the organization.
- Partners are always separate entitles like advertising agencies, market research organization, banking and insurance companies, transportation companies, brokers etc. Which conduct business with the organization.
- Customer comprise of the target group of the organization.
- Competitors are the players in the same market who target similar customers as that of the organisation.
- Public is made up of any other group that has an actual or potential interest or effects the company’s ability to serve.
ii) Macro marketing environment:-
The macro component of the marketing environment is also known as the broad environment. It constitutes the external factors and forces which affect the industry as a whole, but didn’t have a direct effect on the buisness. The macro-environment can be divided into 6 parts:
1. Demographic Environment:- The demographic environment is made-up of the people who constitute in the market.
2. Economic Environment:- The economic environment constitutes factors that influence customers, purchasing power and spending patterns.
3. Physical Environment:- The physical environment includes the natural environment in which the business operates.
4. Technological Environment:- The technological environment constitutes innovation, research, and development in technology, technological alternatives, innovation inducements also technological barriers to smooth operation.
5. Political-legal environment:- The political and legal environment includes laws and government’s policies prevailing in the country.
6. Social-cultural environment:- The social-cultural aspect of the macro-environment is made up of the lifestyle, values, culture, prejudice and beliefs of the people.
Importance of Marketing Environment
The Marketing Environment plays a crucial role in shaping a company's marketing strategies and success. Here are the reasons why it is important:
1. Essential for Planning: Understanding the marketing environment is fundamental to effective planning. It helps businesses anticipate trends, identify potential opportunities and threats, and adapt their strategies accordingly.
2. Understanding Customers: The marketing environment influences customer behavior, preferences, and purchasing power. By analyzing these factors, businesses can gain insights into their target audience and tailor their offerings to meet their needs and wants.
3. Tapping New Trends: The marketing environment is dynamic, with emerging trends and technologies constantly reshaping the market landscape. By staying informed about these trends, businesses can innovate, develop new products and services, and gain a competitive edge.
4. Threats and Opportunities: The marketing environment presents both threats and opportunities. By monitoring the environment, businesses can identify potential risks, such as changing regulations or economic downturns, and take proactive measures to mitigate them. Simultaneously, they can identify and capitalize on emerging opportunities, such as new market segments or technological advancements.
5. Understanding the Competition: The marketing environment includes competitors who are vying for the same customers. By analyzing their strategies, strengths, and weaknesses, businesses can identify opportunities to differentiate themselves and gain a competitive advantage.
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