Marketing Environment Notes Class 11

Unit 6

Marketing Environment

Meaning and defination of marketing environment

Marketing environment is a mix of internal and external forces which surrounded a business firm and have an impact upon it. In other words,marketing environment is the totality of forces that affect the marketing decision and the attainment of marketing goal. Marketing environment plays a crucial role in the ability of a firm to build and maintain exchange relationship with customers.It is a known fact that business firm exists and operates in the society we live. It is thus obvious that they are surrounded by a number of components. These components affect the business firm exists and operates in the society we live. It is thus obvious that they are surrounded by a number of components.These components affect the business firm. They influence the growth and development of the firm. It is thus, important that one understands the different aspects of marketing environment. Familiarity with marketing environment keeps firm in better stand as they can:

Maximize Strength
Minimum Weakness
Grab Opportunities
Reduce Threats

Different experts have given different opinions on marketing environment. A few of the Important ones are listed below:

"A company's marketing environment comprises all the actors and forces outsides marketing that affect marketing management's ability to develop and maintain successful transactions with its larget customers.''

-Philip Kolter

"The market environment consists of external forces that directly or indirectly influence organization's acquisition of inputs (human, financial, natural resources, raw materials and information ) and the creation of outputs (goods, services or ideas)."

-Pride and Ferrell

Features of market

The sailent features of marketing environment are explained as follows:

Dynamic: Marketing environment is dynamic in nature. A large number of forces govern the marketing environment making it unstable and constantly changing. Marketers can control few forces; however, they cannot control all the forces making marketing environment a vibrant and dynamic entity.

Complex: Marketing environment consists of number of features,influences and condistions. The continuous interaction between these elements makes the marketing environment complex and difficult to predict. The complex nature of marketing environment comples the marketers to face uncertainly in their business.

Uncertainty: Marketing environment is uncertain in nature. Market forces are unpredictable in nature. Although a marketer tries to predict market force and develop strategy. It is still difficult to predict many changes.

Long-term impact: Marketing environment has the ability to imapct a marketing firm on long term basis. The impact could be positive or negative and it does affect the way marketing firm operates.

Relativity: Marketing environment is relative in nature. The relative associated with marketing environment explains the reason for differences in demand for a particular product in a particular country. for example, daura-suruwal are the traditional dress in Nepal. Thus, it is always indemand. However,in many european countries the demand for daura-suruwal may be zero.

Multifaceted: Every marketing environment is multifaceted in nature.Any change in the marketing environment could be perceived positive by one marketer and negative by other. In this regard, the same environmental change could be perceived differenly by different marketers creating an opportunity and challange for them.
For example: Corona Pandemic is challange for most of the markets while it is an opportunity for medical suppliers, hospitals, digital technology, etc.

Component Of Marketing Environment

Experts have classified marketing environment in their unique way. Among many, the widely recognized and accepted classification of marketing environment is explained in this part of the chapter.

Internal Environment

The internal marketing environment refers to all the forces and factors inside the organization which affect its marketing operations. The internal environment is under the control of the marketers and can be adjusted as per the need of the situation. The strength and weakness of the marketing activities is associated with its internal environment and hence the internal environment directly or indirectly influemces organization's marketing activities.The primary components of internal environment is explained as follows:

i. Organizational Objectives
The specific goals, purpose and mission of an organization established by its management and communicated to its employees is known as organizational objectives.

ii. Value System
The ethical beliefs that guide the organization in achieving its objective is defined as the value system.

iii. Organizational Resources
The resources possessed by an organization is another important internal environment component. The availability and access of resources is so crucial in formulation and successful implementation of marketing activities.

iv. Organizational Structure
The nature of an organizational structure has a significant influence over how a decision

v. Corporate culture
Corporate culture refers to the beleifs and behaviours that determines how a company's employees and management interact and handle the outside business transactions. Corporate culture is not expressely defined and is developed organically over a period of time based on the cumulative traits of the human resource that organization hires.

External Environment

An external environment consists of environment factors that are outsode the firm. An external environment consists of the micro and macroenvironment. Both of these micro and macro environments are uncontrollable in nature and have a considerable effect on any marketing system. Even though these environments are uncontrollable, organizations should try their best to adapt to the changes in the marketing environment.

Microenvironment

The microenvironment of an environment of an organization refers to the sum total of forces that are close to it and impacts its ability to serve its customers. Also referred as operating environment due to its existence in organization's immediate area of operation micro marketing environment influences the organization directly. The management moreover has to deal with the components of microenvironment frequently.

"microenvironment consists of the forces close to the company that affects its ability to serve its customers- the company, suppliers, marketing channels, customers, competitors and publics."

-Philip Kotler

Microenvironment components are closely related to a particular company and are included as part of the firm's total marketing system. The major components of the microenvironment of marketing are explained below:

Organization
one of the most important components of the microenvironment is the organization itself. It is therefore crucial that the organization understand its own strengts and weaknesses, objectives, availabiliy of resources, etc. The following specific elements of an organization can affect the marketing and over all performance.

Owner
Top Management
Employees

Customer

In the words of Peter Drucker."there is only one valid defination of business purpose,that is to create a customer." Customers are people or organization who buy products and services. An organization's survival depends upon customers. Today marketing of an organization begeins and also ends with the customer. This is the primary reason customer is thus considered as the most important element in the microevenment of any business.

Competitors

Every business has competition. In fact, no organization,how ever large it may be, enjoys monopoly and thus has to face competitors in some way. Competitors refer to those organizations must be well aware of the strength and weakness of the competitors and should be in a position to analyze the probable threats.

Suppliers

Suppliers are another critical componet of the microenvironment. Every organization that is engaged in production depends on a number of suppliers for raw materials, equipment, human resources, etc. suppliers have the power to influence the cost of structure and are hence major force. suppliers that offer the best mix of quality, delivery, reliability, credit, warranties, low cost, etc. are the one that help the organization sustain in the long run. It is therefore important for a marketer to treat suppliers as a crucial component in creating value. In today's cut throat competitions, it is often the relationship between marketers and suppliers that acts as the key components of success.

Marketing Intermediaries

Individuals or business houses who come to the aid of the organizations in promoting, selling and distributing the goods to the end users are known as marketing intermediaries. for many organizations, it is too difficult to reach the end users. In such cases marketing intermediaries act as a linkage between manufacturerres and end users for dissemination of information and the product. A few marketing intermediaries are listed as follows:

Middlemen
Physical Distribution Firms
Marketing Service Agencies
Financial Intermediaries