Ans. Marketing Environment -Marketing activities are influenced by several factors inside and outside a business firm. These factors or forces influencing marketing decision making are collectively called marketing environment. It comprises all those forces which have an impact on market and marketing efforts of the enterprise. According to Philip Kotler, marketing environment refers to "external factors and forces that affect the company's ability to develop and maintain successful transactions and relationships with its target customers." For example, the relevant environment to a car tyre manufacturer may be the car manufacturers and buyers, the tyre manufacturing technology, the tax structure, imports and export regulations, the distributors, dealers, competitors, etc. In addition to these, the company may have to consider its internal environment in terms of Finance, Purchasing, Accounting, Manufacturing Technology, R&D. Top Management, etc. However, this internal environment is controllable to a large extent. The external environment becomes important due to the fact that it is changing and there is uncertainty. Most of these external environmental factors are uncontrollable. There is both a threat and opportunity in these changes.
Micro Environment - Micro environmental factors which influence the marketing decisions of the company are: i) organization's internal environment, ii) suppliers, iii) marketing intermediaries, iv) competitors, and v) consumers.
Organization's Internal Environment - Organization's financial, production and human resource capabilities influence its marketing decisions to a large extent. For instance, while deciding about the sales targets, it is necessary to see whether the existing production facilities are enough to produce the additional quantities or not. If the existing facilities are not enough and expansion to plant and machinery is required, it is necessary to think about financial capabilities.
Suppliers - For production of goods or services you require a variety of inputs. The individuals or firms who supply such inputs are called suppliers. Success of the marketing organization depends upon the smooth and continuous supply of inputs in required quantities on reasonable terms. Hence suppliers assume importance. The timely supplies of specified quality and quantity makes the producer to keep up the delivery schedule and the quality of the final product.
Intermediaries - Normally, it is not possible for all the producers to sell their goods or services directly to the consumers. Producers use the services of a number of intermediaries to move their products to the consumers. The dealers and distributors, in other words the marketing intermediaries, may or may not be willing to extend their cooperation. These persons normally prefer well established brands. Newcomers may find it extremely difficult to find a willing dealer to stock his goods. From newcomers they may demand favourable terms by way of discount, credit, etc., and the producer may find it difficult to satisfy them.
Competitors - Competitors pose competition. Competitors' strategies also affect the marketing decisions. Apart from competition on the price factor, there are ,other forms of competition like production differentiation. There are also competitors who use brand name, dealer network, or close substitute products as the focal point. Their advertising may present several real or false attributes of their product. If one advertises that his product has an imported technology, the other may say that he is already exporting his product. Competitor's strategies sometimes may change an opportunity in the environment into a challenge.
Customers - There are many types of customers. A firm may be selling directly to the ultimate users, the resellers, the industries, the Government or international buyers. It may be selling to any one or all of these customers. Each type of consumer market has certain unique characteristics and the marketer should be fully acquainted with the art of persuading and selling to these consumers. The environment presented by customer profile will have a direct influence on these marketing activities.
Macro Environment - The macro environmental factors that exert influence on an organization's marketing system are: 1) physical environment, 2) technological environment, 3) political and legal environment, 4) economic environment, 5) demographic environment, and 6) social cultural environment.
Physical Environment - The earth's natural renewable resources (e.g. forest, food products from agriculture, etc.) and finite non-renewable resources (e.g, oil, coal, minerals, etc.), weather (climatic) conditions, landscapes and water resources are components of an environment which quite often change the level and type of resources available to a marketer for his production. For example, India does not have enough petroleum resources, and imports petrol and other products. Recently, the Gulf War drastically affected the supply of petrol and diesel in the country. This had lot of implications for the companies consuming petro-products.
Technological Environment Technology is shaping the destiny of the people. The revolution in computers, electronics and communication in general may make one's production out of tune with the current products and services. For example, new printing technology like laser printing and desk top publishing, has already made the labour-intensive type-set printing uneconomical.
Political and Legal Environment - Political changes bring ill new policies and laws relevant to industry. Government regulation continues with different intensities and the law and the rules framed thereunder are becoming complex. Many areas of business are brought under one law Marketing Environment or the other, and the marketer cannot escape from the influence of these laws. The tax laws for example, the sales tax. excise duty, income-tax, etc., have direct bearing on the costs and prices of the products and services marketed.
Economic Environment - Under economic environment, a marketing manager generally studies the following factors and trends:
i) Trends in gross national product and real income growth;
ii) Pattern of income distribution;
iii) Variations in geographical income distribution and its trends;
iv) Expenditure pattern and trends.
v) Trends of consumer savings and how consumers like to hold their savings, i.e., either in the form of bank account, investments in bonds arid securities; purchase of real estate, insurance policies, or any other assets;
Demographic Environment - Marketers are keenly interested in the demographic characteristics such as the size of the population, its geographical distribution, density, mobility trends, age distribution, birth rate, death rate, the religious composition, etc. The changing life styles, habits and tastes of the population, have potentials for the marketer to explore. For example, when both husband and wife go for jobs, the demand for gadgets that make house keeping easier and the semi-cooked food products increase.
Socio-Cultural environment - There are core cultural values which are found stable and deep rooted, and hence change very little. There are also secondary cultural values which are susceptible to fast changes. Some of them like hair styles, clothing, etc. just fade. Even in a given culture, the entire population may not adopt the changes. There are different degrees with which people adopt them. Religion is also an important component of culture which has implications for the marketer. For example, Hindus worship the cow and do not eat beef. So the products made out of beef meat do not have demand.
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