Different environments and their influences on marketing

Marketing Environment

An organization operates basically in three types of environments macro, micro and internal environment. These environments also affect the marketing activities of an organization and they have direct and indirect effect on these activities. Some of the element of these environments are controllable and some are non controllable for the organizations. A brief description of these environments and their effect on the firms are as follow:

The Macro Environment This environment can be studied in the form of PEST Analysis.

1. Political Environment: It includes how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, law, trade, tariffs, and political stability. Furthermore, governments have great influence on the health, education, and infrastructure of a nation.
2. Economical Environment: It includes economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy
3. Social Environment: It includes the cultural aspects, health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. Companies may change various marketing strategies to adapt to these social trends (such as offering innovative health insurance schemes).
4. Technological Environment: It includes technological aspects such as R&D activity, automation, technology incentives and the rate of technological change such as how to market products on internet effectively. Technological shifts can affect costs, quality, and lead to innovation.

The Micro Environment These are internal factors close to the company that have a direct impact on the organization’s strategy. These factors include:

1. Customers: Marketing organizations survive on the basis of meeting the needs, wants and providing benefits to their customers.

2. Suppliers: Increase in raw material prices will have a knock on affect on the marketing mix strategy of an organization. Prices may be forced up as a result.

3. Shareholders: Satisfying shareholder needs may result in a change in tactics of marketing organization. Many internet companies who share prices rocketed in 1999 and early 2000 have seen the share price tumble as they face pressures from shareholders to turn in a profit.

4. Media: Consumer programmes with a wider and more direct audience can also have a very powerful and positive impact. It enforces organizations to change their marketing strategies.

5. Competitors: Marketing is all about differentiation. What benefit can the organization offer which is better than their competitors. Can they sustain this differentiation over a period of time from their competitors? Competitor analysis and monitoring is essential for an organization to maintain its position within the market. 

The Internal Environment It refers to the combination of elements inside the organization on which it has full control. These are as follow:

1. Employees: Employing the correct sales force and keeping it motivated is an essential part of the strategic planning process of a marketing organization. Training and development plays an essential role particular in service sector marketing in-order to gain a competitive edge.  This is clearly apparent in the airline industry.
2. Processes: Internal processes and procedures affect the product delivery, after sales services, customer satisfaction, etc. It is a very important aspect in services marketing.
3. Culture of the organization: It refers to whether the culture is supportive to marketing objectives of the organization?