MARKETING ENVIRONMENT consists of all the internal factors which have direct
contact with and a direct influence on the company. The microenvironment has
five components: the organization itself, the suppliers, the customers,
marketing intermediaries, and competitors. Companies can exert some control
or influence over these components.
1. The organization itself consists of the owners, investors, and employees
who are all considered members of the organization. The company’s top
management has the duty to develop the company’s mission, vision, goals, and
policies which set the stage for the company’s marketing plans. Top
management provides the direction and lays out the strategies and plans.
An organization is composed of different departments with specialized
functions, and these should all work together to achieve the company’s
objectives. Marketing managers work hand in hand with these departments to
ensure superior value to customers.
2. Suppliers provide the resources the organization needs to produce goods
and services. A good relationship with suppliers enables the organization to
ensure the availability of supplies for prompt operations.
3. Customers are the people who are willing and able to buy the
organization’s products and services. They are considered the lifeblood of
the business, for without them the organizations will cease to exist.
Customers determine the demand for products and services. Their needs and
wants vary and may change over time, therefore, marketers should exert efforts
to monitor these needs and wants in order to continually satisfy them.
4. Marketing intermediaries are entities that assist in the distribution and
selling of goods to customers. They help in the free flow of goods from
organizations to the different markets. They create marketing utilities of
place, time, and possession for organizations by ensuring that goods are
accessible and will reach the final customers promptly. There are four types
of marketing intermediaries: wholesalers, retailers, distributors, and agents
and brokers.
WHOLESALERS are entities that buy goods from manufacturers or producers and
resell them to retailers and other organizations. Full-service wholesalers
take charge of storage, order processing, and delivery of goods, while
limited-service wholesalers do not usually carry all the functions of full-
service wholesalers, but package and ship the goods after receiving the
customer’s order details from the retailers.
DISTRIBUTORS are entities selected by manufacturers to buy goods for resell to
retailers. They usually hold a narrower range of goods than wholesalers and
cover a specific geographic area.
RETAILERS carry a wide range of goods which are bought from wholesalers or
distributors and then sold directly to consumers. They have different brands
of goods manufactured or produced by competing organizations.
AGENTS AND BROKERS sell products for a certain commission or percentage of
sales. Agents are authorized by their respective companies to act and decide
on their behalf. Examples are real estate agents and insurance agents.
5. Competitors are rival firms that offer similar goods or services as the
organization. Competitors can be either direct or indirect. Direct
competitors are brands competing in the same industry, offering, or
essentially the same goods or services. For example, the direct competitor of
Coca Cola is Pepsi Cola; while that of Colgate is Close Up. Indirect
competitors offer products or services that differ slightly, but with the same
benefits. For example, Coca Cola and Pepsi belong to the soft drink industry.
All other brands of softdrink are their direct competitors. Their indirect
competitors are fruit juices, bottled water, iced tea, sports drinks, and
energy drinks.
MACROENVIRONMENT of a firm consists of the various factors which affect not
only the firm itself, but also the entire industry of the region or country.
These factors are broader in nature than those of the microenvironment, and
are out of the firm’s control. The six factors of the macroenvironment are
demographics, economics, sociocultural factors,, technological factors,
political forces, and ecological factors.
1. DEMOGRAPHICS refer to characteristics of a population such as age, gender,
religion, educational attainment, civil status, geographic location,
lifestyle, race, and others. Organizations can understand their target
customers by studying their demographics.
2. ECONOMICS refers to the influence of the purchasing power of the peso on
spending patterns, in the context of inflation and other economic forces that
may affect the economy. A high inflation rate affects both producers and
consumers. An increase in the prices of raw materials will mean that either
the producers’ profit margins will decrease or they must raise selling prices
to compensate. As prices increase, purchasing power decreases, meaning that
if income remains the same, consumers can purchase fewer goods and services
than they were able to prior to inflation.
3. The sociocultural aspect refers to the beliefs, practices, norms, customs,
and traditions that may affect business operations.
4. The technological factor refers to developments in technology which may
affect consumers, businesses, and the society at large.
5. Political forces refer to groups of people or parties which may influence
the stability of a country and affect the production, distribution, promotion,
and selling of goods and services. Legal forces refer to limitations and
restrictions that arise from the implementation of legislations and laws which
may affect the conduct of business activities.
6. The ecological factors refer to all the processes or activities necessary
to protect the natural environment while maintaining efficiency of business
operations.
Organizations should ensure that the scale and methods of sourcing their raw
materials are sustainable. Rapid expansion puts not only the future of the
organization, but also the future of the natural environment at risk.
