The marketing environment involves a couple of factors or forces that function or control a company's performance in its chosen target market.
Jain (1981:69) defined the marketing environment to include all those factors that may affect the organization directly or indirectly in any perceptible way. Marketing environment factors impacts the organization incidentally of type and the organizations also have an impact on the environment by output. The relationship between the company and the marketing environment is also known as "inseparable" the business and its own environment are constantly in a state of: give and take" or homeostasis.
The marketing environment includes two major components.
Internal environment: the internal environment involves the controllable variables. Controllable variables are classified into two groups, they may be; the strategy variables and unmarketable parameters.
External environment: the exterior environment consists of the uncontrollable variables. As the marketing manager cannot directly control these elements, they are called uncontrollable variables. The marketing manager has to adjust to the surroundings by quick observation, analysis and forecasting of the environmental factors. The exterior environment can further be divided into two components, the micro environment and the macro environment.
(The Marketing Environment
By Robert W Mccormack)
(Source: MarketingTeacher. com)
The microenvironment includes the forces in the firm's immediate environment and affects the firm's capacity to provide its customers. It includes the business itself, its suppliers, marketing intermediaries, customer market segments, rivals, and publics.
¶ The company element of microenvironment identifies the internal environment of the company. This includes all departments, such as management, funding, research and development, purchasing, functions and accounting. Each of these departments has an impact on marketing decisions. For instance, research and development have insight regarding the includes a product is capable of doing and accounting approves the financial side of marketing strategies and finances.
¶ Another essential requirement of the microenvironment is the suppliers of any company because even the slightest delay in receiving products can result in customer dissatisfaction. Resource availability and other movements working with suppliers are crucial for a marketing director to ensure that product will be sent to customers in enough time frame essential in order to maintain a strong customer marriage.
¶ Marketing intermediaries includes resellers, physical distribution companies, marketing services companies, and financial intermediaries. These are important because they help the business promote, sell, and disperse its products to ultimate potential buyers. Resellers are those that carry and sell the company's product. They play the part of distributing the merchandise to the clients such as Wal-Mart, Target, and Best Buy. Physical circulation companies are warehouses that store and move the company's product from its source to its destination. Marketing services agencies are companies that provide services such as doing marketing research, advertising, and consulting. Financial intermediaries are establishments such as lenders, credit companies and insurance companies.
¶ Another aspect of microenvironment is the customers. There will vary types of customer markets including consumer marketplaces, business markets, government markets, international markets, and reseller markets. The buyer market is made up of people who buy goods and services for his or her own private use or used in their home. Business market segments include those that buy goods and services for use in producing their own products to sell. The government market contains government organizations that buy goods to produce open public services or transfer goods to others who need them. International market segments include buyers far away.
¶ Another essential aspect in the microenvironment is opponents. These are companies with similar offerings for goods and services. To stay competitive, a firm should create a strategic benefits over their rivals.
¶ The final aspect of the microenvironment is publics. Consumer is any group that has a concern in or drive on the organization's capability to meet its goals. For instance, financial publics have an effect on a company's ability to obtain money considering the degree of credit an organization has. Advertising publics include papers and magazines that can release articles of interest regarding the company and editorials that may influence customers' opinions. Government publics make a difference the company by passing legislation and regulations that put constraints on the company's activities. Citizen-action publics include environmental organizations and minority communities and can question the actions of your company and put them in the public spotlight. Local publics are neighborhood and community organizations and can also question a company's effect on the local area and the level of responsibility of their actions. The general public can greatly have an effect on the business as any change in their attitude, whether positive or negative, can cause sales to go up or down because the general public is usually the company's customer foundation. And finally, the internal publics include all those who are used within the business and package with the business and engineering of the company's product.
The macro environment includes all forces of the larger society and affects the microenvironment. It offers principles such as demography, current economic climate, natural causes, technology, politics, and culture.
¶ Demography is the study of individual populations in conditions of size, thickness, location, time, gender, competition, and occupation. As it helps to separate the populace into market segments and target marketplaces, it is vital factor to review for marketers. For example, classifying groups of folks according with their date of labor and birth. These classifications can be known as seniors, who are delivered between 1946 and 1964, generation X, who are created between 1965 and 1976, and era Y, who are created between 1977 and 1994. Each one of these classifications has different characteristics and triggers which are important to marketers. This can be beneficial to a marketing consultancy as they can decide who their product would advantage most and tailor their marketing plan to attract that portion. Demography addresses many aspects that are important to marketers including family dynamics, geographic shifts, work force changes, and levels of diversity in virtually any given area.
¶ Another aspect of the macroenvironment is the economical environment. This refers to the purchasing electricity of potential prospects and the ways in which people spend their money. In this area are two different economies, subsistence and industrialized. Subsistence economies are established more in agriculture and consume their own commercial output. Professional economies have markets that are diverse and carry many different types of goods. Each is important to the internet marketer because each has a highly different spending structure as well as different syndication of riches.
¶ The environment is another essential aspect of the macroenvironment. This includes the natural resources that a company uses as inputs and affects their marketing activities. The concern in this area is the increased pollution, shortages of recycleables and increased governmental involvement. As raw materials become ever more scarcer, the ability to create a company's product gets much harder. Also, pollution can go so far as negatively impacting on a company's reputation if they're known for harming the environment. The past concern, government treatment can make it significantly harder for a company to satisfy their goals as requirements have more stringent.
¶ The technical environment is perhaps one of the most effective changing factors in the macroenvironment. This includes all advancements from antibiotics and surgery to nuclear missiles and chemical substance weapons to automobiles and credit cards. As these market segments develop it can create new markets and new uses for products. In addition, it requires a company to stay before others and revise their own technology as it becomes out-of-date. They must stay enlightened of trends so they can participate another big thing, somewhat than becoming outdated and suffering the results financially.
¶ The politics environment includes all laws, government agencies, and organizations that affect or limit other organizations and people within a culture. It's important for marketers to understand these constraints as they can be intricate. Some products are regulated by both point out and federal regulations. There are even limitations for some products as to who the prospective market may be, for example, smokes should not be marketed to younger children. There are also many constraints on subliminal text messages and monopolies. As regulations change often, this is an essential aspect for a internet entrepreneur to monitor.
¶ The final aspect of the macroenvironment is the ethnic environment, which consists of establishments and basic worth and beliefs of a group of people. The beliefs may also be further classified into core values, which passed on from generation to generation and incredibly difficult to change, and secondary beliefs, which tend to be much easier to influence. Being a marketer, it is important to learn the difference between the two and focus your advertising campaign to indicate the values of a target audience.
When working with the marketing environment it is important for a firm to be proactive. In so doing, they can create the sort of environment that they will prosper in and may become better by marketing in areas with the greatest customer potential. It is important to place identical emphasis on both macro and microenvironment also to react accordingly to changes within them. (WIKIPEDIA)
Chapter 6: Technology
Effects of technology in the current business world:
Technology added a lot to the development of today's business world. Computer systems, internet and a host of other new improvements have made the business world much advanced. In marketing, internet by itself has made it easier to talk to the clients and vendors. Technology has permanently changed just how businesses interact with customers, forcing these to tailor their pitches in more detail than previously. Many standard marketings practices-mass multimedia advertising, sales advertising, sales force phone calls- were part of the old economy. They will continue to be important, but today's businesses must adapt to the changes as a result of technological advancement. Many makes play a significant role in reshaping the earth economy, included in this technology is one.
Much of today's business is carried over networks hooking up people and companies. These sites are called intranets when they hook up people in just a company to one another and to the company mainframe; extranets when they connect a company with its suppliers and vendors; and the internet when they hook up users to a sizable worldwide "information repository". Connectivity is further enhanced by cellular communication. This digitalization and connection is major drivers that underpin the new economy.
The new current economic climate is recognized by information businesses. Information gets the advantages of being easy to differentiate, customize, personalize and dispatch over networks at incredible speed. As companies are becoming effective in gathering information about individual customers, their potential to individualize their market offerings, communications and mass media have increased. For instance, Dell computer invites customers to specify exactly what they want in a computer and delivers a custom-built one in a few days. In addition to that, companies are also able to connect to each customer privately. Another example is Nike's Internet site, where buyers can now choose many models of tennis shoes of different designs, colors, size, even at different cost range.
Changes running a business practice:
The changes in technology and economy are eliciting a fresh set of values and practices on the part of business firms. Such as for example,
Marketing organizations are being created to address the needs of different customer teams. This means a swap from being product-centered to being customer-segment focused.
Companies are adding a concentrate on estimating individual customer life time value and planning their market offerings and prices to make a profit in the customer's life-time.
Companies now focus on the marketing scorecard to interpret what's happening to market share, customer reduction rate, customer satisfaction, product quality relative to rivals and other steps.
As the later David Packard of Hewlett-Packard discovered, "Marketing is much too important to leave to the marketing team. " Every worker has an influence on the client and must see the customer as the source of the company's success.
Companies are switching from building brands through advertising to building brands through performance.
New economy companies put much emphasis on customer retention than on customer acquisition.
An increasing range of companies are making client satisfaction a major goal.
In brief, today's market place is made up of traditional consumers (who do not buy online), cyberconsumers (who typically buy online), and hybrid consumers (who do both). Hence most companies will need a presence both offline and online to cater to these cross types consumers. Companies need to rethink and revise their overall company strategy and within that, their online marketing strategy.
Changes in marketing routines:
E-business describes the utilization of electric means and websites to execute a company's business. Companies can conduct their business faster, more accurately, over a wide range of time and space, at reduced cost and having the ability to customize and customize customer offerings.
E-commerce is more specific than e-business; it means that the business or the site offers to transact or accomplish the advertising of products and services online. E-commerce has given rise subsequently to e-purchasing and e-marketing. E-purchasing means companies decide to get goods, services and information from various online suppliers. E-marketing details company efforts to inform, speak, promote and sell its products and services over the Internet.
E-business and e-commerce happen over four major Internet domains: B2C (business to consumer), B2B (business to business), C2C (consumers to consumers) and C2B (consumers to businesses).
Business-to-Consumer (B2C, sometimes also called Business-to-Customer) identifies activities of businesses providing end consumers with products and/or services. For instance, Calyx & Corolla (C&C), Homeowners. com
While the word e-commerce identifies all online ventures, B2C means "business-to-consumer" and applies to any business or corporation that markets its products or services to consumers online for its own use. When most people think of B2C e-commerce, they think of Amazon, the web bookseller that launched its site in 1995 and quickly took on the country's major retailers. Furthermore to trusted online retailers, B2C has grown to add services such as online bank, travel services, sale, health information and real house sites. Peer-to-peer sites such as Craigslist also fall under the B2C category. (Wikipedia)
Business-to-business (B2B) represents commerce trades between businesses, such as between a supplier and a wholesaler, or between a wholesaler and a shop. The quantity of B2B trades is much greater than the volume of B2C transactions. The primary reason for this is the fact that in a typical supply chain there will be many B2B deals including subcomponent or raw materials, and only 1 B2C transfer, specifically sale of the done product to the end customer. For example, B2B - SoluMed. com, FreeMarkets.
Consumer-to-consumer (C2C) (or citizen-to-citizen) electric commerce includes the electronically-facilitated ventures between consumers through some third party. A example is the web auction, when a consumer posts an item on the market and other consumers bid to get it; the third get together generally charges a set fee or payment. The sites are only intermediaries, just there to complement consumers. They don't have to check on quality of the merchandise being offered. This sort of e-commerce is expected to increase in the near future because it cuts out the expenses of using another company. For instance, eBay, Amazon. com.
Consumer-to-business (C2B) is an electronic commerce business design where consumers (individuals) offer products and services to companies and the companies pay them. This business design is an entire reversal of traditional business model where companies offer goods and services to consumers (business-to-consumer = B2C).
In addition to e-marketing, companies are becoming more skilled in customer relationship marketing (CRM). CRM allows companies to provide excellent real-time customer service by creating a marriage with each respected customer through the effective use of specific account information. Based on what they find out about each customer, companies can customize market offerings, services, programs, text messages and mass media.
The three stages where CRM can help to support the partnership between a company and its customers are, to:
Acquire: a CRM can help a company in acquiring clients through excellent contact management, direct marketing, advertising and fulfillment.
Enhance: a web-enabled CRM coupled with customer service tools offers customers excellent service from a team of trained and skilled sales and service specialists, that provides customers the capability of one-stop shopping.
Retain: CRM software and directories enable a company to identify and reward its loyal customers and further develop its targeted marketing and marriage marketing initiatives.
E-commerce
From Shuvo
According to Patricia Seybold, a management consultant, e-business is the wave into the future and that customer support will be its banner. Those that don't heed the value of e-commerce in making it through the brutal business community will be really affected, but those who underestimate the value of it will perish.
Technological revolution of the marketplace has allowed a larger change and customization of the merchandise, services and promotional information than more mature marketing tools. It offers helpsed the stores to build up and maintain a good romantic relationship with the consumers. Conducting commercial business deal via EDI was the first step to use technology in market place. Every now and then new technologies come along and replace the relatively older one or merging with it, create a fresh sizing and paves the best way to new possibilities. Competition drives new technology.
E-commerce is a successively progressing and producing sector. It includes added a new dimension available on the market to meet up with the consumers' ever-changing needs. It creates the consumers' way of shopping and purchasing much easier and consumers from any distant place can easily access the site, choose their things and get started shopping. Due to comfortablity and easiness, it is becoming an integral part of daily lives for some consumers.
Moreover, for a few products, online purchasing is more suitable. Online sellers can sell some non-digital products and services effectively and may make a good revenue from it. These products may include embarrassing objects or may be ordered from remote places.
Every occasionally market researches and studies are conducted carefully by collecting consumers' information observing their activities. Information from point-of-sales systems within stores help greatly in supposing buyer needs and reaching the goals.
Advantages of E-commerce:
Technology provides consumers ability to analyze on the products they cherish to buy. With this new technology, they may have the energy they never had before- the energy to examine and recheck the products endlessly along with videos and demos and compare prices from thousands of other vendors. Vendors also take good thing about the e-commerce since it doesn't need any live salesman and s/he will keep it wide open for business purpose 24/7 hours. Additionally, even retailers with small capital can establish an international or global reach with a simple website.
E-business has made the international business door open to all. Internet has transformed just how of business through targeted advertising. Companies can lead certain consumers/customers with their business site specifying some keywords and all these are possible by using Google.
Reasons for slow-taking of new technology:
Despite the significance, flexibility and potentiality of the e-commerce and e-business, people has used more time to adopt with this new environment than expected. There are several reasons behind this fact.
Accessibility and supply will be the major key matter regarding this fact. Though it might be accessed from remote places, yet its ease of access and availability are really lows in the indegent, under-developed and developing countries. There are also transfer and delivery problems which greatly diminishes the potential of e-commerce and e-business.
Security concerns come to mind whenever people go for any money-costing occasion like shopping and buying over internet. Many consumers hold back their shopping or buying, even after having good impression on the merchandise, just thinking about the safety of the amount of money. They feel awkward to make use of the bank card due to matter about fraud and fraudulence.
Lack of instant gratifying response on behalf of vendors often decreases the buyer number and amount of visitors.
Social position of the buyer and the cultural aspect of online and offline shopping influences the consumers profoundly. Many consumers favor talking to salesman about the staff or even to their cohorts for real that are not quite the same in online public sale.
Sources of problems:
Steps need to be taken to use the market segmentation in e-commerce and e-business effectively to steer clear of the casualties, or it could raise problems. Failing to understand the consequences will eventually lead compared to that situation. Origins behind these problems are-
1. Failure to understand absolutely free themes. Failing to do it will harmed the consumers' feeling and rebel the actual customers.
2. If one fails to realize the competitive situation and struggles to predict environmental effect, the market talk about will surely fall down and it'll increase problems in future.
3. Both over-estimation of resource competence and under-estimation of time requirements are harmful to marketing plan.
4. Improper co-ordination and inability to follow a plan. It'll downturn the market. Failure to obtain senior management and staff dedication is another key source.
5. Failing to comprehend the ongoing varying structure of the world and predict its mother nature and acting consequently.
6. Becoming the victim of organized offense. The business might be infected by an prepared group of thieves and its conspiracy will harm the overall situation.
7. Inadequacy of e-valiability. Customers' needs have increased profoundly combined with the entry of new technology in the marketing over the year. Consumers plan to get it available all the time and if they don't, even for once, they'll go for alternatives. So to grab the interest of the consumer and support it, supply must be guaranteed.
There are also quality and business to business (B2B) relation issues. To maintain pace and compete with others, quality must be ensured combined with the consumer service. Otherwise, retailers will lose their share.
Recommendation:
To have a successful role in e-commerce endeavor, one has to do some additional deeds to have a better system in this competitive business world and you have to rethink of the strategies if needed, to change those to match with the ever-changing consumer needs and manage up with their requirements in this modern digital world. These responsibilities include the pursuing facts-
First of most, to attract the customers and to preserve them, we must make the web site very attractive and we have to supply the customers with a responsive and user-friendly environment in order that they feel like these are doing everything in a real market and thus, providing customers a better service as well as performance.
We should provide value to customers by offering them a product-line that attracts prospects at a competitive price just like in non-electronic business.
There should be a traffic monitoring system which will record anyone entering the web site and any deeds done by anyone with every single information so that distributors can track down the customer info, evaluate and review it, understand the people's requirements and act according to it.
We may provide incentives for customers to buy and give back. It could include coupons, special deals and discount rates, cross-linked websites and advertising internet affiliate programs. Besides this, providing customized website, purchase suggestions and personalized special offers may make the clients feel like home.
We may also provide additional facilities such as boards, message boards, soliciting customer insight, loyalty strategies and other affinity programs which will support the customers if needed. There should be an instant mail support service available to customers all the time. Besides, different customer oriented services like poll and review need to be implemented frequently to examine and check the marketplace demands and manage up with it.
Consistency and Security are just other vital and undeniable facilities which have to be ensured so the customers do not need to to be concerned for anything else besides his/her major needs. Guaranteeing security includes technological support as well as money insurance issues. Fail-safe technology, information encryption, firewalls, risk-free and guaranteed money-back option in case there is unexpected risks might gratify those demands and will surely increase customers in quantity. There has to be also a home-delivery facility so the customers need not do anything except buying via internet.
