Topics: Marketing, Business, Environment Pages: 2 (875 words) Published: October 11, 2014
External factors are beyond the control of a firm, its success depends to a large extent on its adaptability to the environment. The external marketing environment consists of :
a) Macro environment, and
b) Micro environment
a) Micro environment: The environmental factors that are in its proximity. The factors influence the company’s non-capacity to produce and serve the MARKET.The factors are : 1) Suppliers: The suppliers to a firm can also alter its competitive position and marketing capabilities. These are raw material suppliers, energy suppliers, suppliers of labor and capital.According to michael Porter, the relationship between suppliers and the firm epitomizes a power equation between them. This equation is based on the industry condition and the extent to which each of them is dependent on the other. The bargaining power of the supplier gets maximized in the following situations: a) The seller firm is a monopoly or an oligopoly firm.

b) The supplier is not obliged to contend with other substitute products for sale to the buyer group. c) The buyer is not an important customer.
d) The suppliers’ product is an important input to the buyer’s business and finished product. e) The supplier poses a real threat of forward integration.
2) Market Intermediaries : Every producer has to have a number of intermediaries for promoting, selling and distributing the goods and service to ultimate consumers. These intermediaries may be individual or business firms. These intermediaries are middleman (wholesalers, retailers, agent’s etc. ), distributing agency market service agencies and financial institutions. 3) Customers : The customers may be classified as :

1) Ultimate customers: These customers may be individual and householders. 2) Industrial customers: These customers are organization which buy goods and services for producing other goods and services for the purpose of other earning profits or fulfilling other objectives. 3) Resellers: They are the...
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