What is a Marketing Environment?

Marketing environment is external to the marketing operations, partially controllable, and is relevant to the marketing decision making process. Environment refers to factors which affect the marketing functions of an organisation. Every company operates in an environment. As an organisation works in an environment, the changes in the environment naturally affect the operation and functions of the organisation.

The environment is made up of Macro and Micro environment components –
For most companies, the Micro environmental components are: the company, suppliers, intermediaries, customers, competitors.

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Explain Characteristics / Nature and Components of the Marketing Environment?

Environment Analysis results in identifying trends and events, and its occurrence and impact on the organisation. These trends and events directly or indirectly impact the marketing strategy. The organisation has to know where the environment is heading, what trends are emerging therein, and what should be its response to the environmental changes.

The marketing environment consists of macro environment and micro environment. Certain environmental forces are controllable and some are largely uncontrollable. An organisation has its own internal environment which consists of its culture, people, work ethos, etc. This includes the non-marketing departments within the company. The organisation has to deal with the environmental forces within the company.

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Discuss the Micro Environmental factors in Marketing Environment Dynamics

The Micro environment factors are partially controllable and the management can adjust them to suit the objectives of the organisation depending on how these factors are placed in the environment.

1. Company – Apart from external environment,Strategy development also depends on the strengths and capabilities of the organisation. The organisation is able to do a detailed analysis, as lot of information is available about the performance, organisational structure, management style, etc. Proper coordination between various departments, and flow of correct information is key to smoothly running the activities with minimal costs and effectiveness. A simple classification to look for in an organisation is given below (7M’s)-

a) Members –
Human resources information: staff appraisal records, manpower plan, skills testing programme, data with recruitment and retaining managers, etc.
Quality of management: Availability of skills with in the company, manager, employee capability and performance
Wages, costs and productivity
Training needs, etc.

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Discuss Macro Environmental factors in Marketing Environment Dynamics

All the organisations operate in a Macro Environment which has largely uncontrollable factors that pose threats and opportunities to the organisation.
These are –
1. Demographic,
2. Technological,
3. Natural or physical
4. Social and cultural
5. Political, Legal or Government
6. Economic

1. Demographic Environment –

• Age, size, education etc. of population
• Racial or ethnic composition
• Demographic trends that affect market size
• Significant trends offering threats and opportunities
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Discuss Importance / Need of Marketing Environment Analysis

Analysis of the marketing environment is of great importance to marketers because of the following reasons-

1) The impact of the environment on the organisation is enormous. To understand the trends and events in the market and successfully analysing the data to produce a product of customers need.

2) The changes in the environment affect the functioning of all the departments. The organisations who constantly screen the environment become future ready to overcome the challenges from environmental changes.
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