Marketing Micro Environment

Environment

• Environment literally means the surroundings , external objects, influences or circumstances under which someone or something exists. The environment of an organization is the aggregate of all conditions, events and influences that surrounds and affects it. Since the environment influences an organization in many ways, its understanding is of crucial importance.

Marketing Environment

•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

Marketing Environment

• Successful Companies take outside- Inside view of the business

• Recognition of new Opportunities & Threats presented by the environment

• Need is to continuously monitor & adapt to the environment

• All successful companies recognize & respond profitably to unmet needs & Trends

Suppliers

CustomersCompetitors

Intermediaries

COMPANY

DEMOGRAPHIC

ECONOMIC

TECHNOLOGICAL

SOCIO-

CULTUR

AL

PHYSICALPOLITICAL

Components of Marketing Environment

Internal Environment

Micro Environment

Macro Environment

Micro Environment• The micro-environment affects the

organization directly. It refers to the environment that most closely linked to the firm

• This environment is also not under the full control of business.

• The business can influence this environment.

ORGANISATION’S INTERNAL MANAGEMENT

MARKETING

PURCHASE

FINANCE

RESEARCHAND

DEVELOPMENT

FACTORY

Micro Environment

Components

Customer

Supplier

Competitor

Marketing Intermediar

ies

Public

Customer• Customers are the

actual buyer of our goods and services.

• The company must study its customer markets closely since each market has its own special characteristics.

Customers: The customers of a company may be of five types:

1.Ultimate customers2. Industrial customers3.Resellers4.Government and other non- profit

customers5. International customers

Customer Market• individuals and households that buy goods

and services for personal consumptionConsumer

Market• buy goods and services for further

processing or for use in their production process

Business Market

• buy goods and services in order to resell them at a profitReseller Market

• agencies that buy goods and services in order to produce public services or transfer them to those that need them

Government Market

• buyers of all types in foreign countriesInternational Market

Suppliers• Suppliers are firms and

individuals that provide the resources needed by the company.

• They are an important link in the company’s overall customer “value delivery system.”

Suppliers

Timely Price Quali

tyRight Produ

ct

Point of Consideration

Availability

Price of key inputs

Competitors• Conducting

competitor analysis is critical for success of the firm

• A marketer must monitor its competitors’ offerings to create strategic advantage

Competitors

• Must understand competitor’s strengths• Must differentiate firm’s products and

offerings from those of competitors• Competitive strategies should

emphasize firm’s distinctive competitive advantage in marketplace

Continuum of Competition

• # of sellers

• Product

• Barriers

• Mkt power

• many sellers

• Homogeneous

• No barriers

• None

• Large

• Differentiated

• No barriers

• Little

• Few

• Similar

• High

• Lots

• One

• Unique

• Huge

• Infinite

BASIS OFCOMPARISON

PURECOMPETITION

MONOPOLISTICCOMPETITION OLIGOPOLY MONOPOLY

Number of sellersMany One

Marketing Intermediaries• Marketing

intermediaries are firms that help the company to promote, sell, and distribute its goods to final buyers.

Marketing Intermedia

ries

Reseller

Physical distributio

n firms

Marketing service

agencies

Financial intermedia

ries

Marketing Intermediaries

Reseller• They are those who hold and sell

company’s product.• Wholesaler and retailer.

Physical Distribution Firm• They help the company to stock and

move goods from their points of origin to their destinations.

• Transportation and warehousing.

Contd…

Marketing Service Agencies• They help the company target and

promote its products.• Advertising agencies. Media agency,

marketing research firms, etc.

Financial Intermediaries• They help finance transactions and

insure against risks.• Banks, credit companies, insurance

company, etc..

Public

• A public is any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives.

• A company should prepare a marketing plan for all of their major publics.

Public Group

Public

Group

Financial

Government

Media

LocalGeneral

Citizen

Internal

Responding to the marketing environment

• Those who make things happen: Take aggressive actions to affect the publics and

forces in their marketing environment Develop strategies to change the environment

• Those who watch things happen: Passively accept the marketing environment. Do not try to change it.

• Those who wonder what’s happened: Confused to do an actions and failed to identify the

problem because of the environment changes

MACRO ENVIRONMENTMacro environment refers to those factors which are external forces in the company’s activities and do not concern the immediate environment. These are uncontrollable factors which indirectly affect the concern’s ability to operate in the market effectively.

MACRO

DEMOGRAPHIC

POLITICAL

SOCIAL

TECHNOLOGICAL

Demographic factors: Demography is the study of population in terms of size, density, location, age, gender, occupation etc. These factors have a huge impact on the marketing decisions of the company.For example, a growth in population means increasing human needs which results in the expansion of product markets, if there is sufficient purchasing power.

Economic factors: It consists of factors related to the means of production and distribution of wealth that have an impact on the functioning of an organization. It affects the spending power of people. Further economic development and growth affects the product choice of the customers. For example- per capita income, Balance of payment position, Gross national product, inflation, deflation etc.

Physical factors: Components of physical forces are the earth’s natural renewable and non renewable resources. Natural renewable resources are forests, food products from agriculture or sea. Non renewable resources are finite such as oil, coal, minerals etc. both these components often change the level and type of resources available to a marketer for his production.

Political and legal factors: These factors include the policies related to public sector, small scale industries, sick industries, import and export, licensing, development of backward areas etc. the vast governmental network of laws and regulations have varied impact on marketing activities.

Soci0- Cultural factors: It comprises of society and culture. A society is a set of relations among people including their social status and roles. Culture consists of attitudes, customs, beliefs and values of a society.

SOCIO- CULTUR

AL

CULTURE

SOCIETY

References

• Marketing Mix by Gayatri27• The marketing environment

macro environment or external macro environment.by izzahnoaedia

• Marketing micro environmentthis presentation will help you to know about various micro environmental factors which influences the activity of marketing.by 17somya