Marketing Environment

Prepared by:- Lalit Kumar Mohanta

Contents:-• Introduction• What is Environmental Scanning?• What External Sources Should be Scanned?• Types of Marketing Environment• Micro Environment• Factors affecting Micro Environment• Macro Environment• Factors affecting Macro Environment• Conclusion• References

Introduction• The market environment is a marketing term and refers to factors and

forces that affect a firm’s ability to build and maintain successful relationships with customers.• Firms are affected by lots of different things; a firm's marketing

environment is made up of all of the things that affect the way it operates. Some of the factor's in a firm's marketing environment can be controlled by the firm but some are uncontrollable. Firms need to understand their marketing environment so that they can make the most of positive factors and manage the impact of negative factors.

What is Environmental Scanning?• Environmental scanning is a review of external sources to discover factors

that impact a business. The main goal is to identify and consult sources outside the business. Although these sources are uncontrollable from the business' perspective, it is important to consider them in the decision-making process.

• One popular method of environmental scanning is SWOT analysis. Each letter stands for one area to review: strengths, weaknesses, opportunities, and threats. The strengths and opportunities are factors within the company, and the weaknesses and threats come from sources outside the company.

What External Sources Should be Scanned?• When companies are putting resources and time toward an

environmental scan, they want the results to be as comprehensive as possible.• Most scans include a thorough look at the competition, economics,

technology, legal issues, and social/demographic factors.

Types of Marketing Environment• Three levels of the environment are :• Micro (internal) environment - small forces within the company that

affect its ability to serve its customers.• Meso environment – the industry in which a company operates and

the industry’s market(s).• Macro (national) environment - larger societal forces that affect the

microenvironment.

Micro Environment• The micro environment is made up of factors that are close to the

firm and affect it on a 'day to day' basis• It is the job of the marketer to establish good relationship with their

micro environment as the success of the company depends upon the micro environment.• In company marketer must discuss all the plans and policies with the

top management, R&D, purchasing, manufacturing, selling and other departments to give satisfaction to the consumer.• Micro environment examples include customers, banks and trade

unions as they all interact with the firm.

Factors Affecting Micro Environment• Suppliers:- Suppliers are the persons who provide the company necessary

raw material. If the company is not having cordial relations with the supplier then it may result into short run loss in sale and damage the customer relations.• Marketing intermediaries:- they help in promoting, selling and distributing

the goods to the ultimate consumer. They include middleman like agents, dealers, whole-sellers, retailers, brokers; physical distribution firms which help the manufacturer in moving the goods from the factory to their destination; warehousing firms which help in storing and protecting the goods; transportation firms which help in moving the goods; market service agencies which help in consultancy, research, advertising etc; financing firms provide help in insuring the risk associated with the buyer.

• Customers:- as likes of customer changes very fast so for the growth

of the company the marketer must keep studying the customer related factors and their demand regular basis.• Competitors:- it is necessary for the marketing manager to have the

knowledge about the competitors status, strength, weakness to take the competitive advantage.• Public:-the company must have good public relation department to

maintain good relations with the public.

Macro Environment• The macro environment is made up of factors that affect the firm on a

long term basis.• Macro environment factors are uncontrollable factors but still

influence company strategy.• The macro-environment refers to all forces that are part of the larger

society and affect the micro-environment. It includes concepts such as demography, economy, natural forces, technology, politics, and culture.

Factor affecting Macro Environment• Factors affecting organization in Macro environment are known as PESTEL,

that is: Political, Economical, Social, Technological, Environmental and Legal.• Demographic environment:- it includes the life style, income, qualification,

age, marital status, sex, family structure etc. so the marketer must have the knowledge about it. Like teenage market, kids market.• Economic environment:– it means the purchasing power of the consumer

the marketer must have the knowledge about the inflation, changing consumer pattern, real income, low saving etc.• Natural environment:- the marketer must have the knowledge about natural

resources, their shortage if any, government policies etc.

• Technological environment:-it is the technology which is changing the life of the people. So the marketer must keep an eye on the changing technology.• Political environment:- political stability is very important for the

growth of any economy it include the law, government agencies etc. marketing decisions are affected by the political environment.• Legal environment:- the marketer must function as per the legal

formalities and should not work against them.• Cultural environment:– it include the values, beliefs, perceptions of

the consumer which also affect the marketing environment. So the marketer must have the knowledge about it.

Conclusion:-The marketer can not always control the environment but whenever possible they can take proactive approach to the marketing environment.

References:-• Scanning the Market Environment-

http://www.managementstudyguide.com/scanning-market-environment.htm• Marketing environment and types-

http://www.winnerscience.com/marketing-management/marketing-environment-and-types/• THE MARKETING ENVIRONMENT-

http://www.learnmarketing.net/environment.htm• Market environment-• https://en.wikipedia.org/wiki/Market_environment

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