Business functions as an inseparable part of the environment encompassing it. Hence to comprehend the environment is a significant task of a product manager. Otherwise successful and effective online marketing strategy formulation is extremely hard. The marketing environment includes many factors or pushes that function or control a company's action in its preferred marketplace.
According to Jain (1981:69), the marketing environment includes those factors that could influence the business either straight or indirectly in any observable way. The factors of marketing environment affect the business incidentally of source and the organizations also effect the environment by outcome. Thus the organization and the marketing environment act as "inseparable". Both are dependant on each other.
The marketing environment includes two major components.
Internal environment: the inner environment includes variables that can be controlled. Controllable variables are again of two types: the strategy variables and unmarketable variables.
External environment: the exterior environment includes the uncontrollable factors. As these elements can't be controlled directly, these are called uncontrollable factors. The product supervisor must become accustomed to the environment by quick observation, evaluation and prediction of these environmental factors. The external environment can then be labeled into two elements, the micro environment and the macro environment.
(The Marketing Environment
By Robert W Mccormack)
(Source: MarketingTeacher. com)
The microenvironment includes the makes in the firm's immediate environment and the firm is affected incidentally it acts its consumers. The company, its rivals, suppliers, customer markets, marketing intermediaries as well as publics; are a fundamental element of the microenvironment.
Company means the internal environment of the business enterprise. All the departments; management, money, research and development, procurement, functions and accounting; are included here. All the departments impact marketing decisions. For instance, research and development helps to add new and progressive features to a product and accounting look out the financial facet of marketing programs.
Another important aspect of the microenvironment is the suppliers of an company because receiving supplies with time is vital to avoid customer dissatisfaction. The option of supplies is critical for a marketing administrator because then he/she can ensure that products will be delivered to consumers timely and a strong consumer romance can be looked after.
Reseller, physical circulation company, marketing services agency, and financial intermediary; are area of the marketing intermediaries. These elements are important because the business enterprise organizations promote, sell and spread their products to ultimate clients using their help. Those that maintain and sell the business's product to customers are resellers. They play the part of distributing the merchandise to the customers such as Wal-Mart, Concentrate on, Best Buy etc. Physical syndication firms or warehouses help to store and then move the merchandise from its starting place to its target. The firms conducting marketing research, advertising, and consulting are marketing services agencies. Banks, companies providing credit and insurance are financial intermediaries.
The customers constitute an important area of the microenvironment. Customer market includes consumer market, business market, federal government market, international market as well as reseller market. In consumer market, individuals buy goods and services personal use. Business markets purchase goods and services to be able to produce their own products. The federal government market includes government firms who buy goods to provide general population services. International markets mean customers of other countries.
Another essential aspect in the microenvironment is competition. They provide similar goods and services to customers. To stay competitive, a company must set up its strategic advantage.
Public is the ultimate part of the microenvironment. General public means any group which has a matter in or force on the organization's functions. Here financial publics effect a company's capacity to acquire cash; media publics include newspaper publishers as well as periodicals which can affect the company's image; government publics affect the business through legislation and regulations restricting the company's actions; citizen-action publics include groupings that work for the general public interest and thus question the actions of the company; local publics include people in the neighborhood as well as the community organizations that can question the company's impact on the local area. The general public is also important because they make up the customer bottom and gets the power to cause sales go up or down. There is also the internal public who works for the business and is immediately involved in the making of company's product.
The macro environment symbolizes the larger contemporary society and can affect the microenvironment. Economy, demography, technology, politics natural causes, as well as culture are the components of the macro environment.
Demography studies and categorizes human being populations relating to size, location, time, density, race, love-making and occupation. By using it, the population can be divided into market sections. Thus it is a very essential factor for studying to marketers. For example, classifying groups of men and women according to their year of beginning; seniors (1946-1964), generation X (1965-1976), and generation Y (1977-1994). These classifications help the marketers to recognize the sections they can concentrate on suitably.
Economic environment affects the purchasing ability of people and thus impact their decision of how to spend money.
The environment is concerned about the natural resources that are used by the business as inputs and therefore can influence the actions related to marketing. The consequences of pollution on the surroundings, increasing scarcity of recycleables and governmental interference; will be the major concerns.
The technological environment is the most swiftly changing factors in the macro environment. Technology can build new market segments and add new features to existing products. Being up to date with the latest advancements in the scientific sector can help a business stay before its competition.
The political environment involves all the laws and regulations, polices, governmental and societal commitments etc. These restrictions are of much importance as they can either help or hinder the progress of the company. Additionally the changes in laws and regulations must be contained in the marketing plan.
The cultural environment, as the final phase of the macro environment, constitutes some basic ideals, perceptions, companies and behaviour of a group of people. The values are further divided into core values and secondary beliefs. Core values are carried as time passes and can't be changed easily and so influence a lot in the decision making process. Alternatively, secondary beliefs can be changed easily. For the marketers the difference between both of these is important.
To understand the role of the factors of the marketing environment is very important to a company so that it can change itself within the environment and so become proactive. Both macro and microenvironment are similarly important to look at the changes and react accordingly.