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Marketing Environment

Definition
There are several factors which affect a firm. All the things which affect the operations of a firm are known as marketing environment. Few of these factors can be controlled by the firm but not all.  In order to deal with these factors, firm must understand their market environment so that positive and negative factors would be managed accordingly.

“A company’s marketing environment consists of the actors and forces outside of marketing that affect marketing management ability to build and maintain successful relationships with target customers”. – Philip Kotler

In other words, a firm is surrounded by internal and external force which have a great effect on firm’s ability to maintain lasting relation with target customers.

 

Macro Environment

Micro Environment

Internal Environment

Population Change

Media

Health and Safety Legislation

Green Technology

Carbon Neutral

Inflation

Recession

Employees

Media

Banks

Customers

Distributors

Suppliers

Trade Unions

Employees

Machinery

Materials

Capital Assets

Company Policies

Company Procedures


Internal Environment factors
The internal marketing environment of a firm comprises all those factors which are inside firm, including the firms' employees, firms policies, firms capital assets, firms organizational structure and its products and services. Firm can control these factors.

External Marketing Environment
External marketing environment consist both Micro environment and Micro Environment. These factors are not controlled by a firm, but they greatly influence the decision of marketers during marketing strategy.

Micro Environment Factors
The Supplier:
 Business success depends on the suppliers when they enjoy an authority. The supplier of a company holds the power when they are the only one in market or when they are the largest supplier of the goods. The buyer is not essential to the suppliers business, as the supplier’s good is core ingredient of the finished product of buyer.

The Resellers: The success of companies marketing strategy also depends on resellers if the finished goods of a company is taken to market by market intermediaries or any other third party. These forces include wholesaler, retailers etc. For example If the retail seller holds a reputable name in the market then their reputation can impact the marketing of company’s product.

The Customers: The success of marketing strategy also depends on the customers of company’s product. The nature of customer such as b2c, b2b, international or local and the reason for buying the product will play a role in establishing the marketing strategy of company and how they approach the customers and serve them.

The Competition: Market competition exists when two or more firms sell same or similar products and services. The companies must take into account the way they approach the customers and sell their products to the customer, what price and product differentiation they have for their customer. These factors can be taken into account to get edge over their competitors.

The General Public: The satisfaction of general public is a duty of organization. Company must take decisions while taking the perspective of general public into consideration and how they will get affected by their decision. The customers hold the power to make a win-win situation for a company by helping it reach the goals.

Marketing Environment - Marketing Management | Marketing Management - B Com
 

Macro Environment Factors
Demographic Factors:
 Demographic forces do impact the different market segments, which includes region, country, age, educational level, ethnicity, lifestyle, cultural norms and values.

Economic Factors: The organization production and decision making process of customer also affected by the economic environment.

Natural/physical Factors: The Company must take into account the renewal of the natural resources of the earth such as agricultural product, forest, marine resources etc. The organizations production can also be affected by the non renewable resources which includes coal, oil mineral.

Technological factors: The organization must consider the technological factors as the knowledge and skills used in production of goods. The technology and materials used in production of goods and services helps in smoothing the process of business.

Political and Legal Factors: The organization should take into consideration the political and legal development relating to market and organization during decision-making process.

Social and Cultural Forces: The impact of your organization’s services and products on the society must be taken into consideration. If there is any element used in production process or product that is harmful to society should be avoided as it is a social responsibility of an organization. A most recent example is the environment and the organizations and sectors who have reviewed their services and products to be considered environmentally friendly.


Example of Marketing Environment
The study of decisions that people and businesses make for resource allocation and prices for services and goods is known as Microeconomics. The governmental regulations and tax policies are also taken into consideration. Microeconomics solely focuses on the forces that determine the level of price, supply and demand in an economy. For e.g. microeconomics factors see how a company would do to maximize the production and capacity in order to lower the prices of its products and to compete in the industry in better and efficient way.

Macroeconomics, on the other hand, is the study of whole economy which includes the study of complete industry and economies, not just of a specified company. This involves the phenomenon’s which are economy wide, such as Gross National Product (GDP) and how changes in the economical factors such as national income, unemployment, growth rate and level of price affects it. For instance, the impact of net- exports on nation’s capital account or effect of unemployment rate on GDP.

The macro and micro economics is considered as the study of two diverse divisions of economy. Whereas there are several issues in both fields that make them inter-reliant to each other. For instance, the price of end product would increase with the increase of inflation rate, as with the increase of inflation rate, the price of raw material will increase that will end up with increase in price of finished goods.

The microeconomics adopts the bottoms-up approach whereas macroeconomics has a top-down tactic to analyze the economical situation.

Studying Macroeconomics factors and microeconomics factors concurrently plays a vital role in establishing a successful business as it provides elementary means for professionals to operate the business in an efficient and effective way to generate sound revenue.


Conclusion
Strategic marketers must take into consideration the micro-economic factors and macro-economic factors during decision making process as these forces have a major effect on the marketing campaigns success. Thus marketing environment forces can play a vital role in success of a business, its marketing strategies, marketing campaigns and its branding.

The document Marketing Environment - Marketing Management | Marketing Management - B Com is a part of the B Com Course Marketing Management.
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FAQs on Marketing Environment - Marketing Management - Marketing Management - B Com

1. What is the marketing environment?
Ans. The marketing environment refers to the external factors that affect a company's ability to serve its customers and achieve its marketing goals. These factors include the economic, social, cultural, technological, and legal forces that shape the business environment in which the company operates.
2. What is the significance of the marketing environment in marketing management?
Ans. The marketing environment plays a crucial role in marketing management as it helps the company identify opportunities and threats in the market. By understanding the external factors that may impact the company's performance, marketers can develop effective strategies to capitalize on opportunities and minimize risks. It also helps in adapting the marketing mix to suit the changing needs and preferences of customers.
3. How does the economic environment affect marketing management?
Ans. The economic environment, including factors such as inflation, interest rates, income levels, and consumer spending patterns, significantly influences marketing management. In a recessionary economy, for example, consumers tend to cut back on spending, which may require marketers to adjust their pricing or promotional strategies. On the other hand, during periods of economic growth, marketers may focus on expanding their market share by targeting the growing consumer demand.
4. What role does technology play in the marketing environment?
Ans. Technology has a profound impact on the marketing environment. It has transformed how companies engage with customers, promote their products or services, and gather market intelligence. The advent of digital marketing channels, social media platforms, and data analytics has revolutionized marketing strategies. Marketers need to embrace technological advancements to reach their target audience effectively, enhance customer experiences, and gain a competitive edge.
5. How does the legal environment influence marketing management?
Ans. The legal environment encompasses laws and regulations that govern business practices, advertising, product safety, and intellectual property rights. Compliance with these legal requirements is essential for marketers to avoid legal consequences and maintain their reputation. Legal restrictions may also impact marketing strategies, such as limitations on certain types of advertising or promotional activities. Marketers must stay updated with the legal environment to ensure ethical and legal marketing practices.
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