COMPONENTS OF MARKETING ENVIRONMENT: MICRO AND MACRO ENVIRONMENT

COMPONENTS OF MARKETING ENVIRONMENT 

MICROENVIRONMENT

• FUNCTIONAL AREAS OF BUSINESS

1. HUMANRESOURCE
2. FINANCE
3. RESEARCH & DEVELOPMENT (R&D)
4. PRODUCTION MANAGEMENT 

• SUPPLIERS
• MARKETING INTERMEDIARIES
• CUSTOMER
• SHARE HOLDERS
• COMPETITORS

 MACROENVIRONMENT

• POLITICAL–LEGAL ENVIRONEMNT
• ECONOMICENVIRONMENT
• DEMOGRAPHIC ENVIRONMENT
• TECHNOLOGICALENVIRONMENT
• NATURALENVIRONMENT 
• SOCIO-CULTURALENVIRONMENT

MICROENVIRONMENT

Microenvironment signifies factors and forces over which the marketing firm has control, these factors and forces can be modified in order to provide complete customer satisfaction. The microenvironment consists of functional areas of business, competitors, suppliers, other marketing intermediaries, the markets and segment in which business operates. Micro environmental forces directly impact the customer experience. The aim of marketing is to maximize profits by satisfying the customer requirements and this objective can be accomplished through modification of the micro/internal environmental factors over which marketer has control in such a way as to optimize this objective. The microenvironment refers to the elements of a company's internal and external environment that directly affect its ability to serve its customers. It includes factors such as suppliers, distributors, customers, competitors, and publics. The impact of the microenvironment on marketing functions includes:

• Suppliers: They can impact product quality, delivery, and price.
• Distributors: They can impact the distribution channels and reach of a company's products.
• Customers: They determine the demand for a company's products, which in turn affects production and marketing strategies.
• Competitors: They impact pricing, product differentiation, and target market selection.
• Publics: They can impact a company's reputation and image and affect customer loyalty and purchasing decisions.

In summary, the microenvironment affects all aspects of marketing, including product design, promotion, distribution, and pricing. Companies must closely monitor and adapt to changes in the microenvironment to effectively compete in the marketplace.

MACROENVIRONMENT

The macro environment audit examines the broad range of environmental issues that may affect the organization. Macro environment refers to all major external factors and forces over which the marketing firm has no control. There are six major macro environmental forces to deal with political, economic, socio-cultural, technological, legal and environmental. Marketers should consider these factors to understand the threats and opportunities created by these factors, to develop strategic plans, to obtain and retain competitive advantage. The purpose of analyzing macro environment is to identify the critical issues in the external environment that may affect the organization. The macro environmental forces originate from outside of an organization and generally cannot be altered by actions of the organization or even the number of organizations. A firm should adjust itself to the external environment rather than influencing it. Therefore, understanding external/ macro environment is extremely important irrespective of nature and size of the business. The macroenvironment refers to the larger societal factors that impact an organization's decision-making, including economic, political, legal, technological, and social-cultural factors. The impact of the macroenvironment on marketing functions includes:

• Economic: Changes in the economy can affect consumer spending, inflation, and interest rates, impacting demand and pricing strategies.
• Political/Legal: Government regulations, taxes, and trade policies can affect product distribution, pricing, and promotion.
• Technological: Advances in technology can create new opportunities for marketing but can also disrupt traditional marketing channels.
• Social-Cultural: Shifts in societal values, beliefs, and attitudes can influence product design, promotion, and target market selection.

In summary, the macroenvironment affects the overall marketing environment, creating both opportunities and challenges for organizations. Companies must be aware of macroeconomic trends and adapt their marketing strategies accordingly to remain competitive in the marketplace.