The market environment is a marketing term and refers to factors and forces that affect
a firm’s ability to build and maintain successful relationships with customers.
Three levels of the environment are 3: Micro environment - small forces within the company
that affect its ability to serve its customers.
Meso environment – the industry in which a company operates and the industry’s market(s).
Macro environment - larger societal forces that affect the microenvironment.
Micro-Environment The micro environment refers to the business
itself and to all the challenges that come from inside the business.Businesses can therefore
take control over all the challenges and influences in the micro environment.Sometimes, the micro
environment is also known as the internal environment.
The micro environment refers to the forces that are close to the company and affect its
ability to serve its customers.
It includes the company itself, its suppliers, marketing intermediaries, customer markets
and public.
The company aspect of micro-environment refers to the internal environment of the company.
This includes all departments, such as management, finance, research and development, purchasing,
operations and accounting.
Each of these departments has an impact on marketing decisions.
For example, research and development have input as to the features a product can perform
and accounting approves the financial side of marketing plans and budget in customer
dissatisfaction.
Marketing managers must watch supply availability and other trends dealing with suppliers to
ensure that product will be delivered to customers in the time frame required in order to maintain
a strong customer relationship.
Marketing intermediaries refers to resellers, physical distribution firms, marketing services
agencies, and financial intermediaries.
These are the people that help the company promote, sell, and distribute its products
to final buyers.
Resellers are those that hold and sell the company’s product.
They match the distribution to the customers and include places such as Wal-Mart, Target,
and Best Buy.
Physical distribution firms are places such as warehouses that store and transport the
company’s product from its origin to its destination.
Marketing services agencies are companies that offer services such as conducting marketing
research, advertising, and consulting.
Financial intermediaries are institutions such as banks, credit companies and insurance
companies.
Another aspect of micro-environment is the customers.
There are different types of customer markets including consumer markets, business markets,
government markets, international markets, and reseller markets.
The consumer market is made up of individuals who buy goods and services for their own personal
use or use in their household.
Business markets include those that buy goods and services for use in producing their own
products to sell.
This is different from the reseller market which includes businesses that purchase goods
to resell as is for a profit.
These are the same companies mentioned as market intermediaries.
The government market consists of government agencies that buy goods to produce public
services or transfer goods to others who need them.
International markets include buyers in other countries and includes customers from the
previous categories.
Competitors are also a factor in the micro-environment and include companies with similar offerings
for goods and services.
To remain competitive a company must consider who their biggest competitors are while considering
its own size and position in the industry.
The company should develop a strategic advantage over their competitors.
The final aspect of the microenvironment is publics, which is any group that has an interest
in or impact on the organization’s ability to meet its goals.
For example, financial publics can hinder a company’s ability to obtain funds affecting
the level of credit a company has.
Media publics include newspapers and magazines that can publish articles of interest regarding
the company and editorials that may influence customers’ opinions.
Government publics can affect the company by passing legislation and laws that put restrictions
on the company’s actions.
Citizen-action publics include environmental groups and minority groups and can question
the actions of a company and put them in the public spotlight.
Local publics are neighborhood and community organizations and will also question a company’s
impact on the local area and the level of responsibility of their actions.
The general public can greatly affect the company as any change in their attitude, whether
positive or negative, can cause sales to go up or down because the general public is often
the company’s customer base.
And finally those who are employed within the company and deal with the organization
and construction of the company’s product.
Macro-Environment The macro-environment refers to all forces
that are part of the larger society and affect the micro-environment.
It includes concepts such as demography, economy, natural forces, technology, politics, and
culture.
Factors affecting organization in Macro environment are known as PESTEL, that is: Political, Economical,
Social, Technological, Environmental and Legal.
Demography refers to studying human populations in terms of size, density, location, age,
gender, race, and occupation.
This is a very important factor to study for marketers and helps to divide the population
into market segments and target markets.
An example of demography is classifying groups of people according to the year they were
born.
These classifications can be referred to as baby boomers, who are born between 1946 and
1964, generation X, who are born between 1965 and 1976, and generation Y, who are born between
1977 and 1994.
Each classification has different characteristics and causes they find important.
This can be beneficial to a marketer as they can decide who their product would benefit
most and tailor their marketing plan to attract that segment.
Demography covers many aspects that are important to marketers including family dynamics, geographic
shifts, work force changes, and levels of diversity in any given area.
Another aspect of the macro-environment is the economic environment.
This refers to the purchasing power of potential customers and the ways in which people spend
their money.
Within this area are two different economies, subsistence and industrialized.
Subsistence economies are based more in agriculture and consume their own industrial output.
Industrial economies have markets that are diverse and carry many different types of
goods.
Each is important to the marketer because each has a highly different spending pattern
as well as different distribution of wealth.
The natural environment is another important factor of the macro-environment.
This includes the natural resources that a company uses as inputs that affects their
marketing activities.
The concern in this area is the increased pollution, shortages of raw materials and
increased governmental intervention.
As raw materials become increasingly scarcer, the ability to create a company’s product
gets much harder.
Also, pollution can go as far as negatively affecting a company’s reputation if they
are known for damaging the environment.
The last concern, government intervention can make it increasingly harder for a company
to fulfill their goals as requirements get more stringent.
The technological environment is perhaps one of the fastest changing factors in the macro-environment.
This includes all developments from antibiotics and surgery to nuclear missiles and chemical
weapons to automobiles and credit cards.
As these markets develop it can create new markets and new uses for products.
It also requires a company to stay ahead of others and update their own technology as
it becomes outdated.
They must stay informed of trends so they can be part of the next big thing, rather
than becoming outdated and suffering the consequences financially.
The political environment includes all laws, government agencies, and groups that influence
or limit other organizations and individuals within a society.
It is important for marketers to be aware of these restrictions as they can be complex.
Some products are regulated by both state and federal laws.
There are even restrictions for some products as to who the target market may be, for example,
cigarettes should not be marketed to younger children.
There are also many restrictions on subliminal messages and monopolies.
As laws and regulations change often, this is a very important aspect for a marketer
to monitor.
The final aspect of the macro-environment is the cultural environment, which consists
of institutions and basic values and beliefs of a group of people.
The values can also be further categorized into core beliefs, which passed on from generation
to generation and very difficult to change, and secondary beliefs, which tend to be easier
to influence.
As a marketer, it is important to know the difference between the two and to focus your
marketing campaign to reflect the values of a target audience.
When dealing with the marketing environment it is important for a company to become proactive.
By doing so, they can create the kind of environment that they will prosper in and can become more
efficient by marketing in areas with the greatest customer potential.
It is important to place equal emphasis on both the macro and micro environment and to
react accordingly to changes within them.
Meso-Environment Marketing intermediaries help to sell, promote,
and distribute goods.
Intermediaries take many forms: Resellers
Physical distribution firms Marketing services agencies
Financial intermediaries Customer markets must be studied:
Market types Consumer
Business Government
Reseller International
Various publics must also be considered: Government
Media Financial
Local General
Internal Citizen Action Groups
location References
^ Kotler, Armstrong, Philip, Gary.
Principles of Marketing.
pearson education.
^ Kotler, Phillip and Gary Armstrong(2006), Principles of Marketing.
Pearson Education Inc.
New Jersey External Resources
Marketing Environment Article by Mohammad Monwer Hossain