Read this article to learn the (i) Meaning of Marketing Environment, (ii) Definitions of Marketing Environment, and (iii) Components of Marketing Environment…
Meaning of Marketing Environment:
Marketing environment is a combination of two words i.e., marketing and the environment. The term marketing starts with the determination of consumer wants and ends with the satisfaction of those wants. Environment indicates all internal and external factors and forces which affect the marketing activities.
Marketing activities are affected by various factors inside and outside a business firm. All internal and external forces or factors which influence marketing decision-making are called marketing environment.
Definitions of Marketing Management:
It includes various definitions like:
1. “A firm’s marketing environment includes all the factors and forces outside marketing that affect marketing management’s ability to maintain or develop successful transactions with its target customers.” – By Philip Kotler.
2. “A marketing manager must analyze customer needs and select marketing strategy variables within the framework of the marketing environment and how it is varying or changing”. – By E. J. Mc Carthy.
Components of Marketing Environment:
The marketing environment can be categorized into tw0 different parts:
(i) Micro Marketing Environment
(ii) Macro Marketing Environment
1. Micro Marketing Environment:
This type of marketing environment consists of the factors that influence marketing activities directly. The factors or forces are controllable in nature. These controllable factors are covered as under:
(i) Market Intermediaries:
Market intermediaries are like middlemen, (i.e., retailers, wholesalers, agents, etc) distributing agencies. Financial institutions and market service agencies who come to aid of the company in promoting, distributing, and selling of goods to the ultimate consumers or buyers.
These intermediaries directly affect marketing decisions.
The single peoples or firms who provide resources for the production of goods and services are called suppliers.
The business firm should go for developing specifications, analyzing and identifying the suppliers, searching the potential suppliers and thereafter chooses the supplier who is able to provide the best mix of reliability, quality, warranties, and credit facilities.
Who sell the products and services of a similar description in the same potential market, known as competitors. In changing, scenario identification and monitoring of competitors is very essential.
The famous author Philip Kotler has explained the kinds of competition like desire, generic, form, and brand competitions) and has reviewed by pointing out that, “a business firm must keep four basic dimensions in mind, which can be called the four C’s of the market, i.e., competitors, customers, channels, and its own features of a business firm.
It is very necessary to satisfy peoples. Philip Kotler said that the companies must put their initial energy into effectively managing their relationships with their buyers, distributors and suppliers, their overall growth will be affected by how other peoples in the society view their activity.
So, the factors of the business firm do affect the interests of the general public.
Customers also influence marketing decisions because modern marketing is totally based on the satisfaction of customers. There are five types of customers like;
(a) Industrial consumers, (b) Ultimate consumers, (c) Intermediaries consumers, (d) International consumers, (e) Government consumers.
2. Macro Marketing Environment:
Macro environment means those factors which are external to the business firm and are quite uncontrollable. These are economic conditions, demography, socio and cultural forces, competitions, political and legal forces. These factors do not influence marketing decisions directly but indirectly.
So, The uncontrollable forces or factors of the macro marketing environment affecting the company are covered as under:
(i) Demographic Factors:
Demography is a factor by which we can study about the human population and its distribution. These demographic features relate to the growth of population like sex ration, birth and death rates, age group, ethnic group, rate of literacy and religious structure.
All these demographic factors monitor the volume and nature of the demand for products.
(ii) Natural and Physical Factors:
Natural and physical factors that are forecast, sea, oil, food products, minerals, quite often change the type and level of resources available to a marketer for his production.
Every nation is trying to recycle or conserve their natural resources because the world is facing a crisis of natural resources. For Example, India is facing a crisis of problem of petroleum products and imports petrol and other related products. All these conditions are bound to have an impact on marketing decisions.
(iii) Economic Factors:
Economic factors include GNP, income distribution, cost of living, consumer saving, interest rates, etc. These forces or factors determine the spending pattern and purchasing power of consumers. So, the knowledge and study of economic factors are important for preparing effective marketing strategies.
(iv) Social and Cultural Factors:
The meaning of ‘social responsibility’ is directly affecting the current marketing programme. The involvement of socially responsible marketing is that business houses should avoid producing socially harmful products like a smokeless cigarette, soapless soap, high tech food, diet beer, and so on.
In this calculation, the manufacturer must consider cultural and social factors and try to introduce “ECO Mark” products.
(v) Political and Legal Factors:
Political and legal forces include monetary and fiscal policies, industrial policy, social legislation, foreign policy, etc.
(vi) Technological Factors:
Technological improvement may create new opportunities for the business firm. In the production process changing technology may affect the demand for resources and professional services also. In fact, technological factors help to shape changes in the lifestyle of the buyers and further demand in the future.