Meaning & Types of Marketing Environment
Business does not and cannot operate in isolation from their environment. Efficient companies take an inside-outside perspective of their business. These companies always adapt and change their strategies in light of changing environments. In this article, we will know the Meaning & Types of the Marketing Environment.
Table of Contents
Meaning of Marketing Environment
The marketing environment contains various elements that impact marketing decisions. Marketing firms have to determine these forces and accordingly, interact and adjust their plans and programs.
“A company’s marketing environment consists of the actors and forces that affect the company’s ability to develop and maintain suceessful transactions and relationships with customers.”
-Philip Kotler
Based on the provided definition, it is clear that the marketing environment contains both internal and external factors that significantly impact marketing operations.
Internal factors, like company objectives, policies, resources, and departments, are more controllable. External factors consist of customers, government, and socio-economic forces.
Types of Marketing Environment
The marketing Environment can be divided into two groups:
MicroEnvironment
The micro-marketing environment is related to the factors that are close to a company, have a direct impact, and are controllable on its marketing activities. These elements include customers, suppliers, distributors, competitors, and other stakeholders that interact with the company. Let’s look at each of these factors in more detail
The Customers:
Most of the decisions of the business are influenced by the customers. The Customer is one of the most important factors in the company’s immediate environment.
The Competitors:
It is essential for the company to identify and closely monitor the activities of its competitors. The information must be collected about competitors in respect of product, price, promotion, and distribution strategies. This information will help to analyze the strength and weaknesses of the competitors.
The Suppliers:
Suppliers are firms and individuals, who provide resources or requirements the company needs to produce its goods and service. The Suppliers supply raw materials, machines, equipment, and other resources. This has a direct impact on the firm’s success.
The Middlemen:
The dealers and other negotiators in the chain of distribution are also essential actors in the firm’s immediate environment. In order to promote products in the market, the company must carefully choose and fulfill the needs of its dealers.
Shareholders:
The shareholders are the owner of the company. They buy to the equity share capital of the company. Such equity participation feeds long-term capital to the business firm which helps firms to:
- Set up the new unit
- Undertake R&D
- Modernize the facilities, etc.
2. Macroenvironment
The second type of marketing environment is the microenvironment. The microenvironment consists of the bigger societal forces that impact all the factors in the company’s microenvironment. The macroenvironment is related to the demographic, economic, natural, technological, political, cultural, international, and legal forces. Let’s look at each of these factors in more detail
Demographic Environment:
The demographic environment studies various aspects of the human population, including its size, density, distribution, growth rate, age composition, educational attainment, occupation, religious affiliation, and more.
Marketing focuses on people and therefore, the marketing managers must have exact information about the consumers in respect of:
- Number of consumers.
- Purchasing power of consumers.
- Location of consumers.
- Buying patterns of consumers, etc.
Economic Environment:
A business firm regularly and closely interacts with its economic environment. The economic environment is generally related to those external forces which directly impact business. This factor is the most important factor that affects business.
Natural Environment:
The natural environment contains valuable resources such as land, water, minerals, and port facilities, among others.
A business uses natural resources like iron ore, coal, crude oil, water, land, etc. It needed such resources to produce a tangible product. In doing so two things happen.
- Erosion of natural resources
- Pollution of resources such as water and air due to industrial waste.
Marketing managers have to understand the above two effects and take crucial measures.
Technological Environment:
Technology stands as the most impactful force, dramatically shaping the lives of people. There are regular and continuous breakthroughs in science and technology. Marketing managers must constantly monitor changes in the technological environment. This is because a change in technology will impact business.
Political Environment:
Marketing decisions are deeply influenced by developments in the political environment. This environment is composed of laws, government agencies, and pressure groups that control and influence organizations and individuals in society.
A change in government brings about a change in attitude preferences, objectives, and priorities.
So, these were the Meaning and types of marketing environments If you have any suggestions to improve this post, please share them in the comments.
Read more: 4Cs of Marketing
