Marketing Environment (chapter 4) (3rd semester)

Meaning of Marketing Environment Marketing environment consists of all those internal and external forces which affect the marketing strategies. Modern marketer realizes that environmental scanning would provide them with continuous interaction between the customers and the business they are in. According to Philip Kotler “ Marketing environment as the external factors and forces that affect a firm’s ability to develop and maintain successful transactions and relationships with the target customers.”

Nature of Marketing environment The marketing environment of a business firm may be static or dynamic when the environment forces do not show a significant change, it is termed as stable or static environment. And when significant changes are seen in the environment forces it is termed as dynamic environment. But the degree and nature of change is predictable. There are some other forces in the environment which have considerable influences on the marketing strategies of a firm are listed below; Increased Competition Labour unrest Social changes Technological changes Change in fashion

Components Or factors affecting marketing environment These forces are either internal or external to the firm. The components of marketing environment or the forces/factors affecting the marketing environment can be grouped in two broad categories: Controllable or Internal Marketing Environment Uncontrollable or External Marketing Environment

Controllable or Internal marketing environment Marketing environment includes all factors that effect marketing policies, decisions and operations of a company. The internal environment of a firm include controllable factors or variables such as product design, branding packaging, pricing, advertising and distribution policies of the firm. A firm or a company can achieve its marketing objectives by selecting a balanced Marketing Mix. Marketing Mix The policies adopted by manufacturers to attain success in the marketing constitute the marketing mix. Marketing Mix is considered as an important part of marketing system of the company. It is controllable factor of marketing environment.

Uncontrollable or External Marketing environment. The external forces or factors which constitute uncontrollable environment are divided into two parts for the study purpose: (i) Micro factor such as: Suppliers, Intermediaries, Competitors, Customers and General public (ii) Macro Factors such as: demographic, economic, political, Legal, Technological, Social and Cultural. These factors or forces influencing marketing decision making are collectively called as Marketing Environment.

Micro Marketing Environment Micro environment factors are closely related to a specific company/firm and are included as part of the firm’s total marketing system. Hence, marketers must get adequate information about Internal Environment. Micro marketing Environment Company Suppliers Intermediaries Customers Competitors Publics

Macro marketing environment It consists of all uncontrollable as far as business is concerned. A brief explanation of macro environment is as follows: Macro Marketing Environment Demographic Environment Economic Environment Socio-Cultural Environment Political Environment Legal Environment Technological Environment Competitive Forces Consumer Demand Ecological Environment

Impact of environment on marketing The marketing environment consists a number of forces which influence the marketing activities of a business firm. Some of these forces/elements influence the business directly, while others indirectly. The impact of environment on marketing is studied in two parts: Direct- action Forces Indirect-action Forces

Scanning of Marketing Environment Though, future is unpredictable, but marketer can obtain appraisals of what is ‘most probable’. To monitor changes in the marketing environment effectively, marketer must engage himself in the scanning and analysis of marketing environment. Advantages of scanning of marketing environment There are several benefits that accrue to a marketer by scanning of marketing environment, such as; Trendy products can be brought out in the market. Competitor moves can be anticipated and countered. Marketing mix strategy can be properly formulated. Adapting to the uncontrollable environment become easy.

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