Explain Characteristics / Nature and Components of the Marketing Environment?

Environment Analysis results in identifying trends and events, and its occurrence and impact on the organisation. These trends and events directly or indirectly impact the marketing strategy. The organisation has to know where the environment is heading, what trends are emerging therein, and what should be its response to the environmental changes.

The marketing environment consists of macro environment and micro environment. Certain environmental forces are controllable and some are largely uncontrollable. An organisation has its own internal environment which consists of its culture, people, work ethos, etc. This includes the non-marketing departments within the company. The organisation has to deal with the environmental forces within the company.

This internal environment of the organisation interacts with the external environment which consists of Macro as well as Micro components like political, technological, marketing intermediaries, competitors, etc.

Below chart lists the components of the Marketing Environment-

•  Micro environment is further divided into two parts, the Task Environment and the Internal Environment as seen in the figure.

The Task environment is made up of suppliers, Intermediaries, customers and competitors. The task environment has factors external to the organisations but are partially controllable by the organisation. The Internal environment refers to the Company itself which is also partially controllable and sometimes referred to as 7M’s of an organisation – Members, Make-up, Management, Money, Machinery, Materials and Markets.

• Micro environment includes factors that are external to the organisation and are uncontrollable by the organisation.

To focus on the task environment is to ignore the changes in the macro environment which has its effect on the task environment itself. It is necessary to understand all the aspects of the environment and its changes to chalk out an effective Marketing Strategy. Beyond the internal environment of an organisation, marketing employees deal with intermediaries such as distributors, advertising agencies, marketing research firms, etc. The task environment also consists of suppliers, competitors, and customers.

By constantly analysing the changes that are occurring in the Marketing Environment, organisations are better prepared to –

1) Adapt to change,
2) Prepare long-range strategy,
3) Meet the needs of customers,
4) Forecast tomorrow’s needs, and
5) Compete with the intense competition present in the global marketplace.