Marketing has a very wide effect of internal and external factors and those factors inside and outside the organization commonly known as marketing. It comprises of all the factors which has a great effect on the marketing. According to Philip Kotler, marketing environment refers to “ external factors and forces that affect the company’s ability to develop and maintain successful transaction and relationship with its target customers”.
Importance of study of Marketing environment
- A study of the environment enables the organization to force the impact of social economic changes at the national and international level.
- Marketing manager will be able to adapt themselves to the prevailing conditions.
- A marketing manager can be aware of their competitors.
- It helps in marketing analysis.
- It facilitate the organization to increase general awareness about the environmental change.
- It help an organization to develop broad strategies and long term policies.
Environmental Factors
The marketing company tries to take advantage of its internal as well as external factors by analyzing its opportunities and monitoring the potential to deal with the threats. The marketing environment is is affected by the following major factors-
1.Micro Environment
2.Macro Environment
1.Micro Environment- The micro environment are those which consist of various factors which effect the immediate functioning of the market such as suppliers, customers, competitors, own company, work force etc.
The suppliers- They are those who supply the resources needed by the organization. The supply of good and services can effect the marketing activities. A marketing manager needs to keep their eye on the availability, shortage and delay of the supply which can effect cost sales in the short run can disappoint the potential customer.
The customers- The most valuable aspect for any organization are its potential user i.e. customers it consist of individuals and households who buy the product and services. There are various types of customers in the market such as business persons who buys product or services for the further processing the goods, the re-sellers who buy the product to sell it again and government agencies who produce them in their own different manner and sell it to the needy.
The competitors- The marketing is surrounded by the competitors as well. Each business enterprise have it own competitors with who they compare the product and services. The competitors have to identified and monitored to gain and maintain the customers loyalty. Development of marketing also depends upon the plans and strategies of the competitors. The marketing manager always need to check its competitors activity in order to be better than competitors.
The company- The most effective factor of the marketing activity is its own company. While designing the marketing plan the company also contact with other department such as accounts and finance, production , sales, research and development. Finance department deals with funds, research department is concern with making the product more attractive and useful so the marketing management must work closely with other department too in order to reduce its negative impact on marketing.
The workforce- The employees who are concern with distribution of product and services have a great effect on marketing it include retailers, physical distribution firms, marketing agents. They help the organization to sell, promote as well as distribute the product and services.
2.Macro environment- These are those factors which are under control of other organization, individual groups and have broader effect on marketing as well as its micro environment such as economical environment, demographic environment, political environment. Cultural environment, technological environment etc
Economic environment- Economic conditions such as national income, economic policies, growth rate has a great impact on the business. The economic system is very important determinant of the scope of business. The general economic conditions such as per capita income, price levels, employment growth etc and the industrial conditions such as market growth, product life cycle which are influenced by the organization. Economic environment describe the overall economic condition of the country.
Demographic environment- Demography is the study of human population and their characteristics that used of describe human. This is a very vital aspect for the market manager to know about their customers who are they, where are they, hoe many like to buy their product and many thing about their customers. The important thing to be noticed here is a marketer should be a descriptive knowledge about their customers to reduce the negative impact of it.
Political environment- political environment is concern with the economic system and economic policy. Sometimes government may specify the packaging of certain products, sometime it may prohibits the marketing of a product at a certain geographic area. Number of laws as been enacted to regulate business and marketing and to protect the consumer from unfair practices. Thus it help the business organization to grow and also bring challenges to the origination.
Cultural environment- cultures refers to beliefs, values and the lifestyle of individual in a society. These factors can bring the threats as well as opportunities for the organization. The factor which need to be consider here are buying habits of consumers, their tradition, language, traditions, rituals, taste and preference. The marketer need to understand the need of various culture an accordingly market the product. Culture influence every aspect of marketing, Marketing decision should be based on recognition of needs and wants of the customers.
Technological environment- One of the most dramatic force which is shaping our lives is technology. Technological discoveries and development create opportunity as well as threat for the market. The marketers need to go with the technological trends. Smart phones has replaced almost many thing from our lives, technology has released such wonders as penicillin open heart surgery and birth control pills. Everyday there is a new technological ideas coming up. Marketers need to see through that whether they should go with the trend or should not do any changes further.
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