THE MARKETING ENVIRONMENT
Introduction
Firms are affected by lots of different things; a firm's marketing environment is made up of all of the things that affect the way it operates. Some of the factor's in a firm's marketing environment can be controlled by the firm but some are uncontrollable. Firms need to understand their marketing environment so that they can make the most of positive factors and manage the impact of negative factors. A firm's marketing environment can be spilt into three parts: internal environment, macro environment and micro environment.Internal Environment
The internal environment is made up of factors
within the firm itself. Examples include employees, company policy,
capital assets, the firm's structure and the firm's products
(materials). These factors can be controlled by the firm.
Micro Environment
The micro environment is made up of factors that
are close to the firm and affect it on a 'day to day' basis; usually
these factors interract with the firm or are involved in the same industry.
Micro environment examples include customers, banks and trade unions as
they all interract with the firm. Competitors are also part of the
micro environment because they are selling competing products, their
activity could have a direct impact on the firm's daily business. Some
of the factors within the micro environment can be controlled whilst
other's can not. For more information about the micro environment and
how to analyse a firm's micro environment through a stakeholder
analysis.
Macro Environment
The macro environment is made up of factors that
affect the firm on a long term basis. In general macro environment
factors are not close to the firm. Micro environment factors could be
national or global measures and affect many industries and groups. Macro
environment examples include legislation, the economy (e.g. recession,
inflation, VAT changes), and technological change such as the internet.
Macro environment factors are uncontrollabe factors but still
influence company strategy. For more information about the macro
environment including how to analyse a firm's macro environment through a
PEST Analysis,
Conclusion
One factor can be part of a firm's micro environment and macro environment. The media can be used to illustrate this:
- A one off media story about the firm may affect daily operations and will therefore be part of the firm's micro environment;
- Whilst a general desire to avoid a negative
media story may influence a firm's long term business operations and
therefore make up the firm's macro environment.
Firms should not concern themselves too much
about which of the three categories a factor fits into. Instead firms
should ensure that they have correctly identified all of the factors
which make up their marketing environment and plan how to manage them
for the firm's benefit.
