Marketing Environment

MARKETING ENVIRONMENT
Meaning
Definition: The Marketing Environment includes
the Internal factors (employees, customers,
shareholders, retailers & distributors, etc.) and the
A company’s marketing
External factors( political, legal, social, technological, environment consists of the
economic) that surround the business and influence actors and forces outside of
its marketing operations. marketing that affect marketing
management ability to build
Some of these factors are controllable while some and maintain successful
are uncontrollable and require business operations to relationships with target
change accordingly. Firms must be well aware of its customers”. – Philip Kotler
marketing environment in which it is operating to
overcome the negative impact the environment
factors are imposing on firm’s marketing activities.
The marketing environment of a business consists of an internal and an external
environment. The internal environment is company-specific and includes owners,
workers, machines, materials etc.
The external environment is further divided into two components: micro & macro.
The micro or the task environment is also specific to the business but external. It
consists of factors engaged in producing, distributing, and promoting the offering.
The macro or the broad environment includes larger societal forces which affect
society as a whole. The broad environment is made up of six components:
demographic, economic, physical, technological, political-legal, and
social-cultural 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 very less or no control over the external
environment.
demographic
Characteristics of population - Demography is the study of human populations

in terms of size, destiny, location, age, gender, race, occupation, and other
statistics.
This is the very important factors that help the marketer to divide the
population into different market segments and target markets.
economic
Economic Environment is those macro factors that affect consumer buying power and spending patterns.
It includes the level of income, policies, and nature of an economy, economic resources, trade cycles,
distribution of income and wealth.
Disposable , discretionary income- effects demand and supply
Inflation
boom/recession
Interest rate
competition
political
Political Environment
It includes government actions, government legislation, public policies, and acts which affect the
operations of a company or business.
These forces may affect an organization on a local, regional, national or international level.
So marketers and business management pay close attention to the political forces to judge how
government actions which will affect their company.
technological
Technological Environment
Technological forces are perhaps the most dramatic forces which are changing rapidly. These
macro-environmental forces create a new product, new markets and marketing opportunities for
marketers.
Social and cultural
● Social and cultural forces: The impact the products and services your organisations brings to market have on
society must be considered. Any elements of the production process or any products/services that are harmful to
society should be eliminated to show your organisation is taking social responsibility. A recent example of this is
the environment and how many sectors are being forced to review their products and services in order to
become more environmentally friendly.
Micro environment
Competitors
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.
For a firm to survive competition it is required to keep a close watch on the competitors (both existing and
potential) future moves and actions, so as to prepare in advance, as well as to predict the response of
competitors to company’s moves. Moreover, competitor analysis also helps in maintaining or improving market
share and position.
Suppliers
Suppliers are the one who provides inputs such as material, components, labour and other stock of goods to
the firm, which is required to undertake manufacturing activities. when there is uncertainty as to the supply
constraints, it usually builds pressure on the firms and they are required to maintain high inventories, which
leads to cost increases.
Suppliers have the power to change the firm’s position in the market and its capabilities.
Intermediaries
Intermediaries refer to marketing intermediaries which cover agents, merchants, distributors, dealers,
wholesalers, 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.
Customers
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.
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.
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.
Media
We all know the power of media these days, it can make or break an organization or its products/services
overnight.
Management of media whether electronic media, press media or social media is really important not just to
create a positive and clean image of the company and its products in front of the audience but also to support
the firm in building a good reputation in the market. The right use of media can do wonders for the company
and boost its sales.
Internal environment
Company policies and procedures - mission vision ojectives
Working condition
Financial position
Assets
Org structure
5 M’s - Men Money Material Machine, methods

Marketing Environment

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MARKETING ENVIRONMENT

Characteristics of population - Demography is the study of human populations

Disposable , discretionary income- effects demand and supply

Company policies and procedures - mission vision ojectives

5 M’s - Men Money Material Machine, methods

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