The marketing environment surrounds and impacts upon the organization. There are three key perspectives on the marketing environment, namely the ‘macro-environment,’ the ‘micro-environment’ as well as the ‘internal environment’ and the ‘external environment’.
The marketing concept is a philosophy. It makes the customer, and the satisfaction of his or her needs, the focal point of all business activities. It is driven by senior managers, passionate about delighting their customers.
Marketing Micro-Environment
This environment influences the organization directly. It includes suppliers that deal directly or indirectly, consumers and customers, and other local stakeholders. Micro tends to suggest small, but this can be misleading. In this context, micro describes the relationship between firms and the driving forces that control this relationship. It is a more local relationship, and the firm may exercise a degree of influence.
Marketing Macro-Environment
This includes all factors that can influence and organization, but that are out of their direct control. A company does not generally influence any laws (although it is accepted that they could lobby or be part of a trade organization). It is continuously changing, and the company needs to be flexible to adapt. There may be aggressive competition and rivalry in a market. Globalization means that there is always the threat of substitute products and new entrants. The wider environment is also ever changing, and the marketer needs to compensate for changes in culture, politics, economics and technology.
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Internal Marketing Environment
All factors that are internal to the organization are known as the ‘internal environment’. They are generally audited by applying the ‘Five Ms’ which are Men, Money, Machinery, Materials and Markets. The internal environment is as important for managing change as the external. As marketers we call the process of managing internal change ‘internal marketing.’ Essentially we use marketing approaches to aid communication and change management.
External Marketing Environment
The external environment can be audited in more detail using other approaches such as SWOT Analysis, Michael Porter’s Five Forces Analysis or PEST Analysis. Click on the options below. For example, Five Forces Analysis helps the marketer to contrast a competitive environment. It has similarities with other tools for environmental audit, such as PEST analysis, but tends to focus on the single, stand alone, business or Strategic Business Unit (SBU) rather than a single product or range of products. For example, Dell would analyse the market for Business Computers i.e. one of its SBUs. Five forces analsysis looks at five key areas namely the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.
Conclusions
Now that you have been introduced to some definitions of marketing and the marketing concept, remember the important elements contained as follows:
- Marketing focuses on the satisfaction of customer needs, wants and requirements;
- The philosophy of marketing needs to be owned by everyone from within the organization;
- Future needs have to be identified and anticipated;
- There is normally a focus upon profitability, especially in the corporate sector. However, as public sector organizations and not-for-profit organizations adopt the concept of marketing, this need not always be the case.
- More recent definitions recognize the influence of marketing upon society.