The Marketing Environment

• Marketing Environment -  is the combination of external and internal factors and forces that affect the company’s ability to establish a relationship and serve its customers.
• COMPONENTS OF MARKETING ENVIRONMENT - the marketing environment is made up of the internal and external environment of the business. While the internal environment can be controlled, the business has very less or no control over the external environment.
• INTERNAL ENVIRONMENT - The internal environment of the business includes all the forces and factors inside the organization which affect its marketing operations.
• These components can be grouped under the Five M’s of the business, which are:

  • Men
  • Minutes
  • Machinery
  • Materials
  • Money
• MEN – The people of the organization include both skilled and unskilled workers.
• MINUTES – Time taken for the processes of the business to complete
• MACHINERY – Equipment required by the business to complete the process.
• MATERIALS – Supplies required by the business to complete the production.
• MONEY – the financial resource used to purchase machinery, materials, and pay the employees.
• The internal environment is under the control of the marketer and can be changed with the changing external environment. This environment includes the sales department, the marketing department, the manufacturing unit, the human resource department.
• EXTERNAL ENVIRONMENT - The external environment constitutes factors and forces which are external to the business and on which the marketer has little or no control.
• The external environment is of two types:

  • Micro Environment
  • Macro Environment
• MICRO ENVIRONMENT – The micro-component of the external environment is also known as the “task environment”. It comprises external forces and factors that are directly related to the business. These include suppliers, market intermediaries, customers, partners, competitors and the public.
• Suppliers - include all the parties which provide resources need by the organization.
• Market Intermediaries - include parties involved in distributing the product or service of the organization.
• Partners - are all the separate entities like advertising agencies, market research organization, banking and insurance companies, transportation companies, brokers, etc. which conduct business with the organization.
• Customers - comprise of the target group of the organization.
• Competitors - are the players in the same market who targets similar customers as that of the organization.
• Public - is made up to any other group that has an actual or potential interest or affects the company’s ability to serve its customer.