Several internal and external factors affect a business’s marketing activities. While some of the factors are in the control of the business, most of these are not and the business has to adapt itself to avoid being affected by changes in these factors. These external and internal factors group together to form a marketing environment in which the business operates. Show
Marketing environment is the combination of external and internal factors and forces that affect the company’s ability to establish a relationship and serve its customers. The marketing environment of a business consists of an internal and an external environment.
What Are The Components Of Marketing Environment?The marketing environment is made up of the internal and external environment of the business. While the internal environment can be controlled, the business has less or no control over the external environment. Internal EnvironmentThe internal environment of the business includes all the forces and factors inside the organisation which affect its marketing operations. These components can be grouped under the Five Ms of the business, which are:
The internal environment is under the control of the marketer and can be changed with the changing external environment. Nevertheless, the internal marketing environment is as important for the business as the external marketing environment. This environment includes the sales department, the marketing department, the manufacturing unit, the human resource department, etc. External EnvironmentThe external environment constitutes factors and forces which are external to the business and on which the marketer has little or no control. The external environment is of two types:
Micro EnvironmentThe micro-component of the external environment is also known as the task environment. It comprises external forces and factors that are directly related to the business. These include suppliers, market intermediaries, customers, partners, competitors and the public
Macro EnvironmentThe macro component of the marketing environment is also known as the broad environment. It constitutes the external factors and forces which affect the industry as a whole but don’t have a direct effect on the business. The macro-environment can be divided into 6 parts. Demographic EnvironmentThe demographic environment is made up of the people who constitute the market. It is characterised as the factual investigation and segregation of the population according to their size, density, location, age, gender, race, and occupation. Economic EnvironmentThe economic environment constitutes factors that influence customers’ purchasing power and spending patterns. These factors include the GDP, GNP, interest rates, inflation, income distribution, government funding and subsidies, and other major economic variables. Physical EnvironmentThe physical environment includes the natural environment in which the business operates. This includes the climatic conditions, environmental change, accessibility to water and raw materials, natural disasters, pollution etc. Technological EnvironmentThe technological environment constitutes innovation, research and development in technology, technological alternatives, innovation inducements also technological barriers to smooth operation. Technology is one of the biggest sources of threats and opportunities for the organisation and it is very dynamic. Political-Legal EnvironmentThe political & Legal environment includes laws and government’s policies prevailing in the country. It also includes other pressure groups and agencies which influence or limit the working of the industry and/or the business in the society. The social-cultural aspect of the macro-environment is made up of the lifestyle, values, culture, prejudice and beliefs of the people. This differs in different regions. Importance of Marketing EnvironmentEvery business, no matter how big or small, operates within the marketing environment. Its present and future existence, profits, image, and positioning depend on its internal and external environment. The business environment is one of the most dynamic aspects of the business. In order to operate and stay in the market for long, one has to understand and analyse the marketing environment and its components properly. Essential for planningAn understanding of the external and internal environment is essential for planning for the future. A marketer needs to be fully aware of the current scenario, dynamism, and future predictions of the marketing environment if he wants his plans to succeed. Understanding CustomersThorough knowledge of the marketing environment helps marketers acknowledge and predict what the customer actually wants. In-depth analysis of the marketing environment reduces (and even removes) the noise between the marketer and customers and helps the marketer to understand consumer behaviour better. Tapping TrendsBreaking into new markets and capitalising on new trends requires a lot of insight into the marketing environment. The marketer needs to research about every aspect of the environment to create a foolproof plan. Threats and OpportunitiesSound knowledge of the market environment often gives a first-mover advantage to the marketer as he makes sure that his business is safe from future threats and taps the future opportunities. Understanding the CompetitorsEvery niche has different players fighting for the same spot. A better understanding of the marketing environment allows the marketer to understand more about the competitions and about what advantages do the competitors have over his business and vice versa. Features Of Marketing EnvironmentThe marketing environment surrounding a business possesses the following five features:
Go On, Tell Us What You Think!Did we miss something? Come on! Tell us what you think of our article on the marketing environment in the comments section. A startup consultant, digital marketer, traveller, and philomath. Aashish has worked with over 20 startups and successfully helped them ideate, raise money, and succeed. When not working, he can be found hiking, camping, and stargazing. Are competitors part of the market environment?In a marketing environment, a competitor analysis is a crucial part of a small business's overall strategy and should include a thorough assessment of the strengths, weaknesses, opportunities and threats of current and prospective competitors as well as the political, economic and technological influences that affect ...
What are the 3 marketing environments?External Environment. Micro marketing environment.. Macro marketing environment.. What are 5 marketing environments?9.8 The Marketing Environment. Political and regulatory.. Economic.. Competitive.. Technological.. Social and cultural.. What are the two types of competition in marketing?Competition can be either direct (competing by selling the same products) or indirect (competing for the same market). The intensity of that competition, whether direct or indirect, will affect the overall potential for success of your business.
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