Marketing Environment: Concept, Features, and Scope|Understanding Marketing Environment|Gyankovandar
Concept of Marketing Environment
Marketing consists of various activities. The production functions, transportation functions, advertising functions, pricing functions all are marketing activities. All these activities are related to the selling or buying process. These activities are carried out within the surrounding which is called the environment. Thus the environment marketing activities, a simple, environment which is carried is out within such environment is called the marketing set of forces that influence the growth and development o something directly, indirectly, positively, or negatively. The environment directly or indirectly affects the activities of the marketing. In such a situation, the environment may bring both opportunities and threats for an organization. In these conditions, a marketer has to closely monitor the different changes in marketing. The marketer should try to that may come from the environment as well as make the appropriate decision to face the challenges or threats. The analysis and study of these environmental forces can resist the adverse effects of the environment up to large extent: A marketing manager has to understand this situation or the surrounding where the marketing grows and progresses.
A marketer must analyze the customer needs, wants, demand, and preferences of the customer. Then they should choose the right marketing strategy within the framework of the marketing environment to meet the customer needs and demands. A large number of forces shape the marketing environment. These forces may be internal or external forces. The internal forces are those forces, which are found inside the organization, whereas the external forces are those, %hich are found outside the organization. Stakeholders, customers organizational policies, resources, and culture are taken as the internal forces, whereas the political, economic, social, and technological factors are external forces. As part .of these strategies, marketers must keep a strong relationship with different stakeholders that come in contact with them frequently. For this, they must have a better understanding of the environmental forces that surround these relationships.
The marketing environment denotes all the sources of input, means of processing, and target of output delivery which has a high impact on marketing activities. Marketing receives various inputs from the environment in the form of personnel, finance, raw materials, and information. Marketing processes the received input via environmental factors. Marketing provides various outputs to the environment in the form of goods, services, ideas, product images, and communication.
Thus, the market environment refers to factors and forces that affect a firm’s ability to build and main successful relationships with customers. The environment continues to change rapidly both the consumer and marketer.
There is a give-and-take relationship between a marketing firm and its environment. A marketing firm receives different inputs like raw materials, finance, personnel, and information from the environment. The environment also gets various outputs from a marketing firm like goods, services, ideas, etc. There is a proper exchange of inputs and output between the marketing firm and its environment. Similarly, different strategies can be made in order to adjust the organization’s activities with external forces. The definitions of marketing environment are expressed by various writers, which are as follows.
A company’s marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers.
Philip Kotler and Gary Armstronghith
The forces, which are external to the marketing management functions, largely uncontrollable. potentially relevant to marketing decision-making and changing and/or constraining in nature.
Cramsns, Hills, and Woodruff
Marketing environment is the forces, which are external to the marketing management, largely uncontrollable, potentially relevant to the marketing decision making & changing or constraining in nature.
Careens, Hills & woodruff
The marketing environment consists of external forces that directly or indirectly influence an organization’s acquisition of input (human, financial and natural resources. information) and creation of output (goods. services, or ideas).
Pride and Ferrell
To sum up, the marketing environments are the actors or forces, which are both controllable as well as uncontrollable. The environment never remains the same and keeps changing with time. These forces bring both opportunities and threats to the organization. The proper monitoring and scanning of these environmental forces determine the achievement of organizational objectives and goals.
Features of Marketing Environment
There are many features of the marketing environment. Some of the features of the marketing environment are described below.
The marketing environment is ever-changing. It never remains the same. It keeps on changing with the change in time. attitude, choice, likes and dislikes of ‘the customer. The development of science and technology, transportation. communication etc. has a direct impact on the environment. Similarly, politics, social, and technology are also other important factors, which are responsible for the changing marketing environment. These changing environments provide both opportunities and challenges to the firms. Due to the competitive environment amongst numerous organizations for the product and services, the marketing environment changes rapidly. It is a never-ending process.
There are different components of the marketing environment. These environmental components are classified as the internal and external component that forms the network. This network includes the entire interrelationship between the organizational structure, policies, resources, and the stakeholder. In the same way, the factors like political, social, economic, and technological are also included in this network. The environmental components affect the marketing activities. It is very difficult to make the prediction that which factors have an effect on marketing. Getting a clear relationship between these factors is very complicated.
Sensitive towards various factors
The marketing environment is very sensitive to many factors. These factors may be the customer attitude or choice, the increasing demand for products or services in the market, the changing trends in marketing, etc. The marketing environment has a high degree of sensitiveness towards these factors. The success of marketing heavily depends on the satisfaction of consumers. For this, marketers must know the need, tastes, and preferences of consumers, which change over time. So, marketing firms must be highly sensitive in knowing the needs, wants, and demand of consumers. In addition, it should be aware of the new trends and changes that is taking place in the market.
Due to the application of a free-market economy, the market has become very competitive. The local, national and international level marketing company has an easy entrance to the different countries. These companies are seen to be competing by offering better quality, more services, and more reasonably priced products or goods to the customer. In such a situation, many companies are struggling to fulfill the needs and demean of the customer. Many marketing firms sell similar products and compete for the same buying capacity of consumers. Competing firms, which manufacture substitute products, also present strong competition on a marketing firm. Sometimes products are replaced by entirely new types of products. Due to the steep competition, some of the firms exist from the market, whereas some of them still struggle for their existence. Only a few of the firms get the opportunity for market leadership. To achieve the goals of the organization the accurate analysis and estimation of the environment are important. Therefore, the marketing environment is of competitive nature.
Since the marketing environment is dynamic and keeps on changing according to time, types of competition, and people’s needs and demands, therefore it is full of uncertainty. The outcome in the marketing environment cannot be predicted. There is no such technology or system by which these uncertainties can be accurately predicted. No marketing firms can accurately estimate the events that may occur in the future and their possible results in advance. Anything may happen at any time. For example, the demand of the customer may either increase, decrease or remain constant but no one can exactly say whether the demand will increase or decrease. Do to this uncertainty the market becomes very risky. So, marketing firms operate their activities in an environment having various uncertainties.
Technology is the basis of development for any country. Technology brings changes not only in the quantity and in quality of work but also in the production process and system. Technology has revolutionized marketing. Technology drives the environment. Technology has its direct influences on the economic, political, cultural, and natural environment. Knowing the importance of technology, modern marketing firms are found doing large-scale research works to find out new technology: Technology is taken as a strong tool for doing business. Organization having modern technology can easily outperform their •competitors. For example, due to new technology, the mobile set is slowly replacing the telephone sets.
Storehouse of opportunity
Marketing not only threatens the organization but side by side, it also creates new opportunities. These opportunities are difficult to identify. Only the capable and efficient marketer can identify these opportunities correctly. The marketing manager should constantly monitor and scan the environment to identify these types of opportunities. they should have an eye on the situation, which may be very harmful or devastating to the market. Successful firms grab the opportunities and eliminate the threats. In this way, a successful marketing manager must generalize the opportunities to remain in the market.
Scope of Marketing Environment
Scope of marketing environment means the area, covered -by the marketing. The area covered by the marketing environment is very broad. Every aspect, factor, or activities that links affect, assist or perform marketing or relate with marketing in various ways are the scopes of the marketing environment. Everything that matters to marketing comes under the scope of the marketing environment. The scope of marketing consists of the following aspects.
In the business environment, several organizations are established with different purposes. Those organizations perform various activities. Performance of those activities directly or indirectly related to marketing. All kinds of organizations that perform marketing activities or relate to marketing are within the scope of the marketing environment. They can be business organizations, non-government organizations, or public organizations.
All those activities, which support or assist marketing come within the scope of the marketing environment. Different activities like production, finance, HRM, research, and development are the activities that support marketing and they are the scope of marketing.
Every kind of force that puts impacts directly & indirectly or positively & negatively on the marketing can be defined as a scope of the marketing environment. The forces can either be micro environmental forces (such as suppliers, customers, competitors, intermediaries public, etc.) or macro-environmental forces (such as political-legal, economic, socio-cultural, and technological forces).
The marketing mix
is the set of marketing tools, which the organization uses to achieve the market goal in a defined target market. The elements of the marketing mix are 4ps i.e. promotion, product, price & place. These elements highly affect marketing and thus they are within the scope of the marketing environment.
The stakeholders are the foundation of the organization from •which organization’s objectives are targeted. They may be the outside organization or group that affects the activities of marketing and are affected by marketing. They have a stake in the performance of marketing. The stakeholder includes customer, suppliers, competitor, market intermediate, the government pressure group, etc.