MARKETING ENVIRONMENT
Various Environmental factors affecting
marketing function.
The
environmental factors that are affecting marketing function can be classified
into :
1) Internal
environment and
2) External
environment
Internal
Environment of Marketing :
This
refers to factors existing within a marketing firm. They are also called as
controllable factors, because the company has control over these factors :
a)
it can alter or modify factors as its personnel, physical facilities,
organization and function means, such as marketing mix, to suit the
environment.
There
are many internal factors that influence the marketing function, they are :
Top
Management :
The organizational structure, Board of Director, professionalization of
management..etc..Factors like the amount of support the top management enjoys
from different levels of employees, shareholders and Board of Directors have
important influence on the marketing decisions and their implementation.
Finance
and Accounting:
Accounting refers to measure of revenue and costs to help the
marketing and to know how well it is achieving its objectives.Finance refers to
funding and using funds to carry out the marketing plan. Financial factors are
financial polices, financial position and capital structure.
Research
and Development :
Research and Development refers to designing the product safe and attractive.
They are technological capabilities, determine a company ability to innovate
and compete.
Manufacturing : It is responsible
for producing the desired quality and quantity of products.Factors which
influence the competitiveness of a firm are production capacity technology and
efficiency of the productive apparatus, distribution logistics etc.,
Purchasing : Purchasing refers
to procurement of goods and services from some external agencies. It is the
strategic activity of the business.
Company
Image and Brand Equity : The image of the company refers in raising
finance, forming joint ventures or other alliances soliciting marketing
intermediaries, entering purchase or sales contract, launching new products
etc.
In
organization, the marketing resources like organization for marketing, quality
of marketing, brand equity and distribution network have direct bearing on
marketing efficiency. They are important for new product introduction and brand
extension, etc..
External
Environment of Marketing.
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 :
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.Thefactors 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 intermediaries who purchase goods with a view to resell them at a
profit. They can be wholesalers, retailers, distributors, etc.
4) Government
and other non-profit customers: These customers purchase goods and
services to those for whom they are produced, for their consumption in most of
the cases.
5) International
customers: These customers are individual and organizations of other
countries who buy goods and services either for consumption or for industrial
use. Such buyers may be consumers, producers, resellers, and governments.
6 )Competitors: Competitors
are those who sell the goods and services of the same and similar description,
in the same market. Apart from competition on price, there are like product
differentiation. Therefore, it is necessary to build an efficient system of
marketing. This will bring confidence and better results.
7) Public: It
is duty of the company to satisfy the people at large along with its
competitors and the consumers. It is necessary for
future growth.The action of the company do influence the other groups
forming the general public for the company. A public is defined as ‘any group
that has an actual or potential interest in or impact on a company’s ability to
achieve its objective.’ Public relations are certainly a broad marketing
operation which must be fully taken care of.
Macro
Environment:
Macro
environment factors act external to the company and are quite uncontrollable.
These factors do not affect the marketing ability of the concern directly but
indirectly the influence marketing decisions of the company.
These
are the macro environmental factors that affect the company’s marketing
decisions :
a) Demographic
Forces: Here, the marketer monitor the population because people forms
markets. Marketers are keenly interested in the size and growth rate of
population in different cities, regions, and nations ; age distribution and
ethnic mix ; educational levels; households patterns; and regional
characteristics and movements.
b)Economic
Factors: The economic environment consists of macro-level factors
related to means of production and distribution that have an impact on the
business of an organization.
c) Physical
Forces: Components of physical forces are earth’s natural renewal
and non-renewal resources. Natural renewal forces are forest, food products
from agriculture or sea etc. Non- renewal natural resources are finite such as
oil, coal, minerals, etc. Both of these components quite often change the level
and type of resources available to a marketer for his production.
d) Technological
Factors: The technological environment consists of factors related to
knowledge applied, and the materials and machines used in the production of
goods and services that have an impact on the business of an organization.
e) Political
and Legal Forces: Developments in political and legal field greatly
affect the marketing decisions. sound marketing decision cannot be taken
without taking into account, the government agencies, political party in power
and in opposition their ideologies, pressure groups, and laws of the land.
These variables create tremendous pressures on marketing management. Laws
affect production capacity, capability, product design, pricing and promotion.
Government in almost all the country intervenes in marketing process
irrespective of their political ideologies.
f) Social
and Cultural Forces: This concept has crept into marketing literature as an
alternative to the marketing concept. The social forces attempt to make the
marketing socially responsible. It means that the business firms should take a
lead in eliminating socially harmful products and produce only what is
beneficial to the society. These are numbers of pressure groups in the society
who impose restrictions on the marketing process.