Marketing is a general term used to describe all the various activities involved in transferring goods and services from producers to consumers. In addition to the functions commonly associated with it, such as advertising and sales promotion, marketing also encompasses product development, packaging, distribution channels, pricing, and many other functions. The modern marketing concept, which is applied by most successful small businesses, is intended to focus all of a company’s activities upon uncovering and satisfying customer needs. After all, an entrepreneur may come up with a great product and use the most efficient production methods to make it, but all the effort will have been wasted if he or she is unable to consummate the sale of the product to consumers.
In order to correctly identify opportunities and monitor threats, the company must begin with a thorough understanding of the marketing environment in which the firm operates. The marketing environment consists of all the actors and forces outside marketing that affect the marketing management’s ability to develop and maintain successful relationships with its target customers. Though these factors and forces may vary depending on the specific company and industrial group, they can generally be divided into broad micro environmental and macro environmental components. For most companies, the micro environmental components are: the company, suppliers, marketing channel firms (intermediaries), customer markets, competitors, and publics which combine to make up the company’s value delivery system. The macro environmental components are thought to be: demographic, economic, natural, technological, political, and cultural forces. The wise marketing manager knows that he or she cannot always affect environmental forces. However, smart managers can take a proactive, rather than reactive, approach to the marketing environment.
As marketing management collects and processes data on these environments, they must be ever vigilant in their efforts to apply what they learn to developing opportunities and dealing with threats. Studies have shown that excellent companies not only have a keen sense of customer but an appreciation of the environmental forces swirling around them. By constantly looking at the dynamic changes that are occurring in the aforementioned environments, companies are better prepared to adapt to change, prepare long-range strategy, meet the needs of today’s and tomorrow’s customers, and compete with the intense competition present in the global marketplace. All firms are encouraged to adopt an environmental management perspective in the new millennium.
A company’s marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers.
- Being successful means being able to adapt the marketing mix to trends and changes this environment.
- Changes in the marketing environment are often quick and unpredictable.
- The marketing environment offers both opportunities and threats.
- The company must use its marketing research and marketing intelligence systems to monitor the changing environment.
- Systematic environmental scanning helps marketers to revise and adapt marketing strategies to meet new challenges and opportunities in the marketplace.
The marketing environment is made up of two components: