How Marketing Micro Environmental Factors Affect Business Strategy

Sat, 03/01/2014 - 08:11 -- Gulzar Ahmed

Marketing Environmental Factors affect Buiness

No business exists and operates in a vacuum, but every business exists and operates in an environment. Efficient and effective marketing strategy always depends upon marketing manager's ability to understand the marketing environment in which the business operates.

The marketing environment includes all those factors or forces that influence a company's performance in its chosen target market. Marketing environment factors affects the business by the way of input (Sales & Profit) and the business also affect the environment by output (Products & Services). The relationship between the organization and the marketing environment is "inseparable" and in a state of “give and take”.

In simple words the marketing environment consist of those forces or factors that impacts on the company's capability to operate and serve effectively in its chosen target market. The marketing environment of a particular company is divided into two major components.

  1. Company Micro environment
  2. Company Macro environment

marketing microenvironmental factors

Marketing Micro Environmental Factors

In this article, I would discuss Micro environment of a company. The company micro environmental forces include the company itself, its suppliers, marketing intermediaries, customers, competitors and various publics. The marketing manager must understand the micro environment of a business by prompt observation, market analysis and by other techniques in order to accomplish company’s marketing strategy. Let discuss marketing micro environmental factors in details.

  1. The Company
  2. Suppliers
  3. Marketing Intermediaries
  4. Customers
  5. Competitors
  6. Publics

The Company

In company the management focuses on different departments to attain the desired objectives. For examples company’s top management sets the overall Goals, Objectives, Strategies and Policies for company. Sales departments focus on sales and sales promotions. Distribution department make it sure the availability of companies departments in different shopping malls and stores. Research and intelligent department conduct different market survey and other research work.  So these all departments collectively make a company, and these departments have impact on company marketing department.

Suppliers

Suppliers are the most important factor of micro environment. They actually link the company with its overall customer value delivery system. Suppliers provide the resources needed by the company to produce its goods and services. Supplier problem can seriously affect a company’s marketing strategy.  So market mangers of all successful and market leaders companies like Houston Effler, Pepsi & Co and Toyota always have some precautionary measure on suppliers. They always watch supply availability, supply shortages or delays, labor strikes, and other factors related with supply of material. Some companies like Toyota also prints “Suppliers Guide".

Marketing Intermediaries

Marketing intermediaries is that element of micro environment which also plays a vital role for a company to accomplish its marketing strategy. These are the firms are peoples that help the company to promote, sell and distribute its goods to final customers, which affect the business in term of bring cash. The examples of marketing intermediaries are whole sellers, retailers, marketing services agencies and financial intermediaries.

Customers

Customers are those peoples who buy goods and services produced by a particular company. There is a purchase chain in which different people are involved and play significant roles before a purchase decision is made. The various customer influences must be understood by a good marketer. The critical factor here is that needs and wants of customers are changing rapidly. The changes in the preferences of the customers create opportunities as well as threats for a company. Only good knowledge of consumer’s behavior facilitates the design and production of goods and services that the customers need and want.

According to the world top CEOs like Keith Banks President US Trust, Bob Lord AOL Network business strategy must be driver as customers want. IMB recently conducted a study of over 4,000 top level executives where IBM Head of Strategy and Transformation Dr. Saul Berman says that customers are involving not only in process product development and sales but also engaged in recruitment and strategy.

Competitors

A competitor is a company or firm operating in the same industry or market. Marketing concepts tells us that a successful company must provide better and greater value and satisfaction than its competitors. So all successful companies like Pepsi co focus on strategic advantages by positioning product or offering in the mind of their customers better than its competitors. Companies also have an eye on their competitor’s strategies and policies.

Publics

This is the last component of company’s micro environment. Publics include all those groups that have actual or potential interest and impact on an organizational ability to achieve its Goal & Objectives. The five major types of public which influence the company ability to serve its customers are as under:

  1. Financial publics influence the company ability to obtain funds
  2. Media publics carry news and other features about company products
  3. Government publics concern with rules and regulation issues
  4. Internal publics include workers, mangers and board of directors
  5. General publics shows their attitude towards company products & services

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