Marketing Environment | Micro & Macro Environment

In this article, you will learn what is marketing environment? Also, you will learn about the types of marketing environment.

Marketing Environment

The marketing environment refers to external factors and forces that effect the company’s ability to develop and maintain successful transactions and relationships with companies target customers.

It is the combination of external and internal factors and forces which affect establish a relationship and serve its customers.

The individuals and forces that influence a company’s marketing management’s capacity to create and sustain successful interactions with its target customers are referred to as the marketing environment.

The environment for marketing presents both opportunities and threats. Successful businesses understand how crucial it is to constantly monitor and adjust to the changing environment utilizing their marketing research and intelligence systems. Unfortunately, far too many other businesses fail to view change as an opportunity. They refuse to accept or embrace necessary changes until it is almost too late. Their cultures, systems, structures, and tactics become progressively out of date.
The fact that powerful corporations like General Motors and IBM ignored environmental changes for too long led to crises.

It is mostly the role of a company’s marketers to recognize important environmental changes. Marketers should be the ones to watch trends and look for opportunities more than any other department in the firm. Although every management in a company must be aware of the outside world, marketers have two unique skills. They have organized ways to gather data about the marketing environment, including marketing research and marketing intelligence.

Additionally, they typically spend more time around customers and rivals. Marketers can modify and adapt their marketing strategy to take advantage of brand-new opportunities and difficulties by doing systematic environmental scanning.

Types of Marketing Environment

There are two types of marketing environment:

▶Micro Environment

▶Macro Environment

Micro Environment

The responsibility of marketing management is to develop attractive offers for target markets. However, marketing managers cannot limit their attention to the needs of the target market. The microenvironmental actors of the company will also have an impact on their success.

Micro Environment consists of all those factors that influence marketing activities directly.

It is also known as internal or controllable environment. It includes the factors that influence marketing performance positively or negatively.

Factors that effect micro environment are:

⫸ Organization / Company

⫸ Customers

⫸ Supplier

⫸ Competitors

⫸ Market Intermediaries

⫸ Various publics

Organization / Company

Top management, finance, R&D, purchasing, manufacturing, and accounting of a company should be considered when establishing marketing strategy. Internal environment consists of interconnected marketing groups.

Top management sets mission, objectives, strategies, and policies. Marketing managers must make decisions aligned with senior management’s plans before implementing them.

Marketers must work closely with other departments.

Finance involves finding and deploying finances for the marketing plan.

The R&D department designs safe, appealing products.

Purchasing concerns about getting supplies and materials, whereas manufacturing is responsible for producing the desired quality and quantity of products.

Accounting measures revenues and costs to help marketing meet its goals.

These departments affect marketing’s plans and actions. All of these functions must ‘think customer’ and work together to create exceptional customer value and satisfaction.

Customers

The business must carefully study its customer markets. There six types of customer market according to Philip Kotler.

Consumer markets

Consumer markets are made up of people and households that purchase goods and services for their own use.

Reseller markets

In contrast to reseller markets, which acquire products and services to resale for a profit.

Business markets

Business markets purchase products and services for further processing or for use in their production process.

Institutional markets

Schools, hospitals, nursing homes, jails, and other institutions that provide commodities and services to individuals under their care make up institutional markets.

Government markets

Government agencies purchase products and services to provide public services or to be distributed to people in need, making up the government markets.

International markets

Finally, buyers from other nations, such as consumers, producers, resellers, and governments, make up international markets.

Every market type has unique characteristics that the vendor should carefully study. The company may work with one or many customer markets at any given moment.

For instance, Unilever must keep in touch with retailers who carry and resell its branded products and promote the benefits of its detergent brand to consumers.

Competitors

According to the marketing principle, in order to be successful, a firm must deliver more consumer value and satisfaction than its competitors. Marketers must therefore do more than simply adapt to the needs of their target consumers. They must also obtain a strategic advantage in the minds of consumers by forcefully positioning their offerings against competitors’ offerings.

There is no single competitive marketing strategy that is best for all businesses. Each company should assess its own size and industry position in relation to its competitors.

Large companies with dominant positions in an industry can employ techniques that smaller companies cannot. Being enormous, however, is insufficient.

There are successful and losing tactics for major corporations. Small businesses can also develop techniques that provide higher rates of return than huge corporations.

Supplier

Suppliers play a crucial role in the company’s overall “value delivery system” for customers. They give the business the resources it needs to generate its goods and services.

Changes in suppliers can have a significant impact on marketing. Marketing managers need to keep an eye on supplier availability since delays in or shortages of supplies, labor disputes, and other occurrences can affect sales in the short term and customer satisfaction in the long term.

The pricing patterns of their key inputs must also be monitored by marketing managers.  Price rises resulting from rising supply costs could affect the company’s sales volume.

Market Intermediaries

Marketing intermediaries assist companies promote, sell, and distribute goods. They include resellers, distributors, marketing services agencies, and financial intermediaries.

Like suppliers, marketing intermediates are key to the company’s value delivery system. In order to please customers, the corporation must do more than boost its own performance. It must work with suppliers and marketing intermediaries to optimize the system.

Resellers

Resellers assist companies to locate clients and sell to them. These include wholesalers and retailers who resell. It’s hard to choose and operate with resellers. No longer can manufacturers choose from many small dealers. Now they face increasing reseller organizations. These organizations have the power to dictate terms or shut down large markets.

Distributors

Physical distribution firms store and convey products from origin to destination. Working with warehouse and transportation services, a corporation must balance cost, delivery, speed, and safety when storing and shipping items.

Marketing services agencies

The marketing research companies, advertising agencies, media companies, and marketing consultancies that assist the business in identifying and promoting its products to the appropriate markets are referred to as marketing services agencies.

The organization must choose wisely because the firms vary in innovation, quality, service, and price. The company must examine these firms’ performance and replace those that don’t perform well.

Financial intermediaries

Financial intermediaries include banks, credit companies, insurance companies, and other enterprises that finance transactions or insure against buying/selling risks.

Most firms and customers rely on financial intermediaries. Rising credit costs and limited credit impair the company’s marketing success.

Whether or not a business has a favorable financial system, it must be aware of how financial institutions affect marketing. For this reason, the organization must build good partnerships with major financial institutions.

Publics

The marketing environment of the organization also involves a variety of publics. A public is defined as any group with an actual or future interest in or impact on an organization’s capacity to achieve its goals.

A company can create marketing strategy for both these publics and its consumer markets. Assume the corporation desires a specific response from a specific public, such as goodwill, favorable word of mouth, or monetary or time donations. The company would have to create a public offer that is appealing enough to elicit the required response.

There are seven different sorts of public:

Financial publics

Financial publics have an impact on the company’s ability to raise capital. The primary financial publics are banks, investment firms, and stockholders.

Government public

Management must consider government developments. Marketers must frequently engage with the company’s lawyers on product safety, truth-in-advertising, and other problems.

Internal publics

. Internal publics of a firm include its employees, management, volunteers, and the board of directors. Large corporations utilise newsletters and other communication tools to inform and motivate their internal audiences. When employees have a positive attitude toward their organisation, it spreads to their external audiences.

General public

A firm should be concerned about the general public’s perception of its products and actions. The public’s perception of the company influences its purchasing. As a result, many multinational firms spend vast quantities of money to market and build a positive company image.

Local publics

Every business has a local public, such as citizens and community organisations. Large corporations typically designate a community-relations officer to interact with the community, attend meetings, answer queries, and give to worthy initiatives.

Citizen action publics

Consumer organizations, environmental groups, minority groups, and other pressure groups may dispute a company’s marketing decisions. Its public relations department can assist business in maintaining contact with consumer and citizen groups.

Media publics

Media publics are those who broadcast news, features, and editorial commentary. Newspapers, publications, radio and television stations are among them.

Macro Environment

The macro environment includes the factors that are external to the company. These factors are uncontrollable and indirectly impact on company’s performance.

Factors that effect macro environment are:

⫸ Political and Legal Environment

⫸ Economic Environment

⫸ Social and Cultural Environment

⫸ Technological Environment

⫸ Demographic Environment

⫸ Natural Environment

Demographic Environment

The people who make up the market make up the demographic environment. It is defined as the factual  investigation and division of the population into groups based on factors such as size, density, location, age, gender, race, and occupation.

Demographic Environment includes:

→ Study of population and its distribution

→ Rate of growth, birth and death

→ Gender Ratio

→ Age group

→ Educational level

→ Occupation

→ Religious background

Demographic Environment have an impact on performance of marketing in which you are conducting marketing that is urban area or rural area.

Political and Legal Environment

The laws and current government policies are part of the political and legal environment. It also covers other organizations and pressure groups that influence or impose restrictions on how businesses and/or industries operate in society.

It includes monetary and fiscal policies acts, Industry policy, foreign policy.

Economic Environment

Customers’ purchasing power and spending patterns are influenced by the economic environment. The GDP, GNP, interest rates, inflation, income distribution, government funding and subsidies, as well as other important economic variables, are some of these elements.

Purchasing power of customers depends on factors such as their income, savings, inflation and availability of credit, GDP , interest ratio.

If economy of a country is good then people will have money and then they purchase products which will have an impact on marketing performance.

Social and Cultural Environment

The macroenvironment’s social-cultural component consists of peoples’ attitudes, values, cultures, prejudices, and beliefs. In different regions, this varies.

It also includes culture, social class and traditions.

Natural Environment

It is the environment in which the business operates. Climate, environmental change, natural disasters, pollution, availability of water and raw materials, oil, coal minerals, cost of energy etc. are all included in this.

If all these things are cheap than your product will be cheap, price will be low and customers will buy it.

Natural Environment consists of natural recourses, ecology and climate condition in a state , country where company operates.

Technological Environment

The technological environment includes technological innovation, technological research and development, technological alternatives, technological innovation inducements, as well as technological operational barriers. One of the biggest and most dynamic sources of dangers and opportunity for the organization is technology.

Technology has revolutionized the production processes, use of new raw materials, and logistics.

Technological innovation has impacted education and healthcare.

Other articles

Please read through some of our other articles with examples and explanations if you’d like to learn more about marketing.