Marketing Essays - Macro Micro Environments

Macro Micro Environments

I have chosen Marketing Environment as my theme for the project. This task is about how exactly Marketing environment works and what their effects are.

  • Environmental pressure that affect the business's ability to provide their customer.
  • How changes in the conditions have an impact on marketing decision.
  • The main trends in the firm's natural and technology conditions.
  • The key changes that arise in the political and cultural environments.

Definition of Marketing

A general explanation of marketing is "the function or procedure for buying and selling in market".

According to John Saunders and Veronica Wong "A sociable and managerial process by which individuals and group obtain what they need and want through creating and exchanging products and value with others. (Philip Kotler 1999)

American marketing connection define marketing as, the procedure of planning and performing the conception, prices, promotion, and distribution of ideas, goods, and services to generate (Ref: http://www. websitemarketingplan. com/Arts/MktgChange. htm)

The all-embracing function that connect to business with the customer needs and want in order to obtain the right product to the right place at the right time. . (Ref http://www. tutor2u. net/business/marketing/what_is_marketing. asp)

Adrian Palmer in his publication defines marketing as "The management process which recognizes, anticipates a products customer requirements effectively and profitably". (Adrian Palmer 2004).

This diagram will summarises the main element components of marketing an their associations :( Ref: http://www. tutor2u. net/business/marketing/what_is_marketing. asp)

Introduction about marketing environments

A company marketing environment consists of the professional and pushes outside marketing that affect marketing management's capability to develop and keep maintaining successful transaction using its focus on customer. The marketing environment offers both opportunities and hazards. (Philip kotler 1999).

The marketing environment surrounds and effects upon the organization. You can find three key perspectives on the marketing environment, namely the 'macro-environment, ' the 'micro-environment' and the 'internal environment'.

(Ref: http://marketingteacher. com/Lessons/lesson_marketing_environment. htm)

The environments where you will have to market your new product are a significant factor in deciding your strategy. In the real-life Marketing Plan you'll spend a solid timeframe researching these conditions. For the purpose of your Marketing Plan, do enough informal and supplementary research to have a good notion of what will affect your product kick off. (Ref: http://www. atkinson. yorku. ca/~lripley/imUenviron. htm)

Basically first we must understand that what Marketing environment is? The marketing environment can be defined as exactly what surrounds an organization's marketing function and can impinge on it. Basically Marketing environment is based upon Macro and Micro environment. The result which we get immediately or you can say immediately those things comes in Micro environment such as delivery rate may seems inconsequential now, but could have a direct impact on a firm's Micro environment, expreesed through demand for its product. The causes which will be appear in future these kind of changes are called Macro-Environment or you can say that Macro environment consists of larger societal makes that could effect the Micro environment it could be demographic, cost-effective, culture and technology. Basically the entire marking environment revolves around Macro and Micro Environment.

Marketing environment is dependant on Micro-Environment and Macro-Environment.

Micro Environments

The Micro environment involves the forces near to the company that have an effect on its capability to serve its customer-the company, materials, marketing, channel companies, customer markets, rivals and publics. (Kotler/ Armstrong 1999)

This environment influences the organization straight. It includes suppliers that offer directly or indirectly, consumers and customers, and other local stakeholders. Micro will suggest small, but this is misleading. In this particular context, micro describes the partnership between organizations and the driving a car causes that control this marriage. It is a far more local marriage, and the firm may exercise a amount of influence.

(Ref: http://marketingteacher. com/Lessons/lesson_marketing_environment. htm)

The Company

In planning marketing plans, marketing management should take other company categories, such as top management, money, research and development(R and D), purchasing, manufacturing and accounting, into consideration. Each one of these interrelate teams form the internal surroundings. Top managements place the company's objective, goals boar strategies and procedures. (Philip kotler 1999)

The Marketing Concept tells us that in a perfect world, the complete company will work alongside one another to profitably meet the needs of the consumer. As the Marketing Supervisor for a new product, you suffer from things over which you have some immediate control - the merchandise itself, its price, its campaign, and where it is sold (circulation/place). In addition, it means that you cannot just work within the wall space of the Marketing Team; you need to get out and talk to the rest of the company, break down the artificial barriers that keep a firm from working as a team. This will include all other efficient areas of the business that touch on any issues of research, planning, execution and control, which means pretty much everyone.

(Ref: http://www. atkinson. yorku. ca/~lripley/imUenviron. htm)

The MARKETING THEORY instructs us that in a great world, the whole company will continue to work jointly to profitably meet the needs of the buyer. As the Marketing Director for a fresh product, you suffer from things over which you have some immediate control - the merchandise itself, its price, its advertising, and where it is sold (circulation/place). It also means that you cannot just work within the surfaces of the Marketing Office; you have to get out and talk to all of those other company, breakdown the artificial obstacles that keep an organization from working as a team. This includes all other practical areas of the company that touch on any issues of evaluation, planning, execution and control, and this means pretty much everyone.

(Ref: http://www. atkinson. yorku. ca/~lripley/imUenviron. htm)

Suppliers

Suppliers are an important website link in the company's overall customer "value delivery system". They provide the resources needed by the business to create its goods and services.

Supplier improvements can seriously impact marketing. Marketing professionals must watch source availability-supply lack or delays, labour strikes and other happenings can cost sales in the short run and harm customer satisfaction in the long run. Marketing managers must monitor the purchase price trends of these key input. Rising resource costs may power price increase that can harm the company's sales quantity. (Philip kotler 1999)

Increase in raw material prices will have a knock on impact on the marketing combination strategy associated with an organisation. Prices may have no choice but up as a result. Closer supplier associations are one way of guaranteeing competitive and quality products for an organisation. (Ref :( http://learnmarketing. net/microenvironment. htm)

  • Provide resources had a need to produce goods and services.
  • Important link in the "value delivery system".
  • Most markets treat suppliers like partner. . Ref:(http://faculty. necc. mass. edu/wkibbe/courses/MKT%20210/handouts/Ch%203. ppt#7):

These offer an organisation with goods services are changed by the company into value-added products for customer. For companies functioning in highly competitive market segments where differentiation between products is little, obtaining supplies at the best possible price may be vital in order to be able to pass on cost saving in the form of lower prices priced to customer. Where dependability of delivery to customer is crucial, unreliable suppliers may thwart a manufacture's marketing attempts. (Adrian palmer 2004)

Taking into account the needs of suppliers requires combo of shrewd business sense and good ethical practice. (Adrian Palmer 2004).

Marketing Intermediaries

We always say that all four of Marketing's P's are evenly important, but Place (stations of syndication) could very well be most important. (Ref: http://www. atkinson. yorku. ca/~lripley/imUenviron. htm)~

Price

We've all bought something that was more than we wanted to pay for it, but we needed it therefore we bought it (paying $8. 50 to park in Car parking Structure II when you already pay a big charge for a yearly parking pass, but in another section of campus)

Product

We've all bought something that wasn't quite right but we'd to have it therefore we took that which was there (your new car has everything you want but not automatic house windows and you choose to get it in any case)

Promotion

The sad thing here is that advertising research implies that often we bear in mind products BETTER when we hate their advertisings, and when we go to the store, we might forget that people hate the ad but we keep in mind the product enough to buy it

Place

But nobody has ever bought something that wasn't there to buy; we're not speaking here about placing your order something that has go out of stock, or buying on the web where you don't visit a physical product, but rather of a situation where the good simply wasn't open to be bought

Marketing intermediaries are firms that help the company to promote, sell and send out its goods to last potential buyers. They include resellers, physical distribution businesses, marketing services organizations and financial intermediaries. (Veronica Wong 1999)

Resellers

They are the distribution channel businesses that help the business find customer or make sales to them. Included in these are wholesalers and stores which buy and resell merchandise. (Philip kotler 1999)

Companies must not disregard the wholesalers, suppliers and agent who may be curial interfaces between themselves and their final consumers. Large-scale creation firms usually find it difficult to deal with each one of their final consumers individually, so they choose instead to market their product through intermediaries. In a few business sectors usage of effective intermediaries can be curial for marketing success. For-example, food companies who do not get shelf space in the major supermarkets may fin it difficult to achieve large-volume sales. (Adrian palmer 2004).

Customers

Simple and easy description of customer "Organisations endure on the basis of getting together with the needs, wishes and providing benefits because of their customers. Failure to take action will bring about a failed business strategy" Ref :( http://learnmarketing. net/microenvironment. htm)

We can specify customer into following categories:-

Consumer - individuals and households that buy goods and services for their own personal intake.

Business - also called Industrial market segments or B2B market segments, they buy goods and services for even more processing or for use in their own production process.

Reseller - buy goods and services for repackaging and offering at a profit.

Government - buy goods and services to create open public services or copy these to needy constituents. The number-one user of advertising in Canada is the government

International - potential buyers far away.

(Ref: http://www. atkinson. yorku. ca/~lripley/imUenviron. htm)

These are a crucial part of any organization's micro-enviroment. For your commercial group, no customer means no business. An organisation about the changing dependence on its customer and should keep in touch with these changing needs by using a proper information gathering system. In an excellent world, an organization should know its customer so well that it is able to anticipate what they'll require next, somewhat than wait until it is possibly too later and then follow.

  • In 2002 the Consumer's Relationship launched a advertising campaign against financial services companies which it stated possessed mis-sold endowment procedures to individuals. sales-people may have enticed by a higher level of fee to sell an insurance plan that the customer did not understand an was evidently not in their finest interest (for example, an insurance plan that would spend only time after the customer's home loan was anticipated to be paid).
  • Car manufacture's often a pricey stereo system to autos as standard, but relegate essential safety equipment to the status of "optional extra. "

In each of these circumstances most people might agree that, objectively, customers are being persuaded to make a choice against their own long-term self-interst. But on what moral grounds, can society say that consumer's alternatives in this situation are wrong? Relating for some individual's sense of priorities, a pricey in-car music system may indeed be considered to provide a higher-level of personal benefit than an airbag. (Ref: Adrian Palmer 2004)

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Competitors

The name of the overall game in marketing is differentiation. What gain can the organisation offer which is better then their competitors? Can they support this differentiation more than a time period from their competition? Competitor research and monitoring is vital if an company is to keep up its position within the marketplace. (Ref: http://learnmarketing. net/microenvironment. htm)

The marketing concept states that, to reach your goals, a company must provide higher customer value and satisfaction than its competitor's do. Thus, markets must do more than simply adjust to the needs of target consumers. They need to also gain tactical advantage by placing their offering strongly against competitors `s offering in the intellects of consumer's. (Philip kotler 1999)

THERE IS ALMOST* ALWAYS COMPETITION If you're producing something that hasn't been made before, for which you will get no direct competition, then your competition is merely at a broader level. You can NEVER say that you haven't any competition. In one class, a group came up with a concept for a device for a car that did not exist at the time (it now does - some type of computer helped map device to let you know what your location is). They thought that they had no competition until they realized that a car buyer would need to select from their expensive product and say, an upgraded audio system, leather bucket chairs, tinted windows. . . . there's always a competition for your potential customer's money. What you choose to think about your direct competition makes all the difference in what your online marketing strategy will be. Ref :( http://www. atkinson. yorku. ca/~lripley/imUenviron. htm)

Government:-

The demands of government firms often take precedence above the needs of your company's customer. Goverment has a number of roles to experience as stakeholder in commercial organisations
  • Commercial organisations provide governments with taxation income, so a wholesome business sector is in the interest of the federal government.
  • Government is progressively planning on business organisations to take over many responsibilities from the general public sector, for example with regards to the repayment of sickness a maternity benefits to employee.
  • It through business organisation that govt: achieve several economic and cultural purpose, for example with respect to regional economical development an art training. (Adrian palmer 2004)

Macro Environment:-

The simple and understandable classification of Macro environment "The macro conditions are generally uncontrollable by the company. Things happen and the business must anticipate to react. (Ref: http://www. atkinson. yorku. ca/~lripley/imUenviron. htm)

Now we will define some aspect of Macro environment:-

Political:-

Political factors can have a primary impact on just how business operates. Decisions made by government impact our every day lives and will come in the form of policy or legislation. The government's benefits of the statutory minimum income affects all businesses, as do consumer and health insurance and safety laws and so forth. The current upsurge in global petrol prices is having a deep impact on major economies, it is estimated that 200bn has been put into the global gas bill because the price increases started out (BBC information 19/9/00).

The politics decision as to whether the UK subscribes to the Solo European Money are again having a direct effect on UK businesses. Companies like Nissan who've recently invested in the UK have signalled that they will withdraw their business from the UK if the federal government fails to sign up (Ref: - http://learnmarketing. net/environment. htm).

Economical:-

All companies are affected by inexpensive factors nationally and internationally. Interest rate insurance policy and fiscal policy will have to be set accordingly. Within the UK the climate of the market dictates how consumer may act within population. Whether an overall economy is at a boom, recession or recovery will also impact consumer assurance and behaviour.

An economy which is booming is characterised by certain parameters. Unemployment is low, job assurance is high, and for that reason self confidence spending by consumers is also high. This has an impact of all businesses. Organisations have to be able to keep up with the increased demand if they are to increase turnover. An overall economy which is in a downturn is characterised by high unemployment, and low assurance. Because of high unemployment spending is low; self confidence about job security is also low. Businesses face trouble, consumers won't spend because of low disposable income. Many businesses start reducing on costs i. e. Labour, add shorter weeks and scale back on advertising to save lots of money. (Kotler, 1999)

Case: In the early 1990's when the united kingdom economy is at a slump, and businesses were folding regularly, a security company called 'Dreadlocks security' to battle falling sales embarked on strategy of cutting back on labour costs, and doubling advertising expenses. The companies' theory was that not their whole target portion was afflicted by the recession and he had to fight for the customers that still had the income to invest on security products.

Economies globally also have an impact on UK businesses, cheaper labour overseas affects the competitiveness of UK products nationally and internationally. An increase in interest rates in the USA will have an impact on the share price of UK securities or adverse weather conditions in India may have an impact on the price of tea.

A truly global player must be aware of monetary conditions across all borders and ensure they use strategies and tactics that their protects their business. (Ref: - http://learnmarketing. net/environment. htm)

Social & Cultural Environment:

I think Contemporary society & ethnic Environment is the most important aspect of marketing because if you are starting any product in virtually any country. First you have to check out how things work in that country, what their tradition & culture are. So, culture plays an important role in increasing yours earnings graph and in reaching your targets.

The "Social & ethnical environment" is made of organization and other pushes that impacts society's basic principles, perception, prefences, and behaviours. People grow up in a specific society that form their basic values and worth. They absorb a world view that defines their romantic relationship with others. (Ref: Armstrong & kotler 2005)

Institution and other pushes that affect culture basic values, perception, preferences and behaviour come in "population and cultural environment". (Ref: Kotler & Armstrong, 1999)

As I've already told that culture is an important aspect in marketing so by this case study it is clear that how culture effects marketing.

Case analysis: - Mecca Cola (Forget about ridiculous drink-drink with dedication)

"The unveiling of culturally distinctive product such as Mecca-Cola concern marketing ideas which derive from assumption of ethnic convergence. " Competitor Coca Cola has put in many years becoming a market innovator in many of the market it serves. In some developing countries, Coke has purchased relevance as a representation of a western-life style. However, in 2002 the competitor Mecca-Cola launches its slogan "Forget about ridiculous drink-drink with commitment", and concern a few of the cultural values that underlie Coke's success. Mecca Cola pledges to place back profits in to the communities that it functions (Ref: Adrian Palmer, 2004)

If we compare Coke and Mecca-Cola in a few Muslim countries like "Pakistan". We may easily figure out that Mecca-Cola has beat Coke although Coke is one of the leading companies however the thing that matter is culture. The crucial thing that Mecca-Cola have was that they centered on culture. They realized that they can not remain competitive Coke internationally nonetheless they knew they can contend in Muslim countries by using the culture. So they have this thing and they captured the market.

The demographic environment:

Demography is the study of population in term of size, denseness, location, years, gender, race, job and other figures. The demographic environment is of extensive interest to marketers because it involves people, and people make up marketplaces. (Ref: Kotler & Armstrong, 1999)

The study of individual populations in terms of size, density, location, age, gender, race, occupation, and other reports. (Ref: Armstrong & kotler, 2005)

Here we discuss the main demographic characteristics and fads in the major world markets.

Population size and Progress Trend:-

Population growth craze because they can offer marketers a sign of demand for several goods and services. A "Baby Boom` would suggest growing demand for newborn foods, nursery kitchen appliances, maternity services, baby clothing, playthings etc, in the brief to medium term, with rising demands for family-size accommodation, greater cars, classes and educational services on the long run. Difference in population growth patterns between country marketplaces could also suggest different international marketing opportunities for companies.

The changing family:-

The notion of an excellent family-dad, mum and two kids- has already been losing some of its lustre. People are marrying later and having fewer children. The precise figures can vary greatly among countries, but the general style is toward fewer maried people with children. Actually, couples without children under 18 now constitute a high percentage of all young families. These are worrying movements too for prosperous Parts of asia like Singapore, Japan and Hong Kong. (Ref: Kotler & Armstrong, 1999)

Increasing Diversity:

The ethnic composition of the UK population has become increasingly diverse. ANY OFFICE for National Information has predicted that almost 60% of the 4. 3 million people increase likely to appear between 2000 and 2025 will be accounted for by inward migration. Ethnic diversity has generated new opportunities to cater for cultural prefences in domains as diverse as food, travel and music. (Ref:-Adrian Palmer, 2004)

Conclusion:

In this assignment I have tried to determine what marketing environment is and will marketing environment really influence the business strategy. Basically Marketing environment is split into Micro-environment and Macro-environment. Micro-environment influences may demand urgent attention, but Macro-environment influences can have a more profound long-term effect on an organization's marketing. Marketing environment provides us lot of opportunities as well as we have got plenty of danger. It's true that marketing has got both option but I think that every organization has got too much to do with marketing environment because every giant and vital companies is aware the vital importance of their marketing research and brains to view and take up the changing marketing environment. The question is what happens to people companies who don't realize the value of marketing environment? It's so simple you can see IBM and Standard Motors they overlooked environmentally friendly changes and now they are really in crises. Actually marketing environment takes place with a mother board system of monetary, communal and technology interactions. In marketing environment a company creates its value through interaction with other individuals and organization to constitute marketing environment. You can't split marketing environment into distinctive areas. A good firms seeks to understand the complicated linkage between different parts of marketing environment. Marketing environment is performing as a pillar for the company and if a person neglect the value of marketing environment it quite hard for the organisation to maintain in market. So in my own assignment I've tried to analyse that on what ground marketing environment is based and what effect it's got on an organization.

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