Firms are affected by lots of different things; a firm's marketing environment is made up of all of the things that affect the way it operates. Some of the factors in a firm's marketing environment can be controlled by the firm but some are uncontrollable. Firms need to understand their marketing environment so that they can make the most of positive factors and manage the impact of negative factors. The market environment is a marketing term and refers to factors and forces that affect a firm’s ability to build and maintain successful relationships with customers.
In order to correctly identify opportunities and monitor threats, the company must begin with a thorough understanding of the marketing environment in which the firm operates. The marketing environment consists of all the actors and forces outside marketing that affect the marketing management’s ability to develop and maintain successful relationships with its target customers. Though these factors and forces may vary depending on the specific company and industrial group, they can generally be divided into broad micro environmental and macro environmental components.
For most companies, the micro environmental components are: the company, suppliers, marketing channel firms (intermediaries), customer markets, competitors, and publics which combine to make up the company’s value delivery system. The macro environmental components are thought to be: demographic, economic, natural, technological, political, and cultural forces.
1. The Company’s Microenvironment
The forces close to the company that affect its ability to serve its customers, the company, market channel firms, customer markets, competitors and publics, which combine to make up the firm’s value delivery system, is known as micro-environment.
The micro marketing environment consists of certain forces that are part of an organizations marketing process, but remain external to the organization. This micro marketing environment that surrounds organizations can be complex by nature; however the company has an element of control over how it operates within this environment.
2.1 The Company
In designing marketing plans, marketing management should take other company groups, such as top management, finance, research and development (R&D), purchasing, manufacturing and accounting, into consideration. All these interrelated groups form the internal environment. Top management sets the company’s mission, objectives, broad strategies and policies. Marketing managers make decisions within the plans made by top management.
Suppliers are firms and individuals that provide the resources needed by the company and its competitors to produce goods and services. Suppliers are an important link in the company’s overall customer value delivery system. They provide the resources needed by the company to produce its goods and services. Supplier developments can seriously affect marketing. Marketing managers must watch supply availability – supply shortages or delays, labor strikes and other events can cost sales in the short run and damage customer satisfaction in the long run. Marketing managers also monitor the price trends of their key inputs. Rising supply costs may force price increases that can harm the company’s sales volume. Increasingly, today’s marketers are treating their suppliers as partners in creating and delivering customer value.
2.3 Marketing Intermediaries
Marketing intermediaries are firms that help the company to promote, sell and distribute its goods to final buyers. They include resellers, physical distribution firms, marketing services agencies and financial intermediaries. Resellers are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers who buy and resell merchandise.
Resellers are the individuals and organizations...