What is Marketing Environment?

The marketing environment is an entire set of events, circumstances, and objects

that have an impact on the marketing practices of an organisation. Several
environmental factors have a direct impact on the organisation's marketing
operations and decision-making ability. For instance, A car tire manufacturer's
marketing environment can consist of external factors such as import-export laws,
tax systems, technological changes, etc., and the internal environment such as
competitors, marketing intermediaries, suppliers, the company itself, etc.

According to Philip Kotler, "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."

Generally, marketers attempt to predict future changes by analysing the

marketing environment. These changes could present both challenges and
opportunities for the firm. With the help of these changes, marketers keep
changing their strategies and plans. Besides, the marketing team of an
organisation has to stay informed about the marketing activities of the
competitors as it is essential for the long-term success of the firm.

Features of Marketing Environment

The following are the features of the marketing environment:
 Complexity: The marketing environment is composed of several factors
that are interrelated and interdependent. This makes the environment
complex to understand. Even a small change in one aspect has an
immediate impact on the other. The interdependence between these
components varies depending on the situation. Therefore, it becomes
extremely difficult to predict the environment.
 Dynamic: The marketing environment has a dynamic and ever-changing
nature. Environmental factors influence the operation of a company, as a
result, the organisation's form and character continue to keep changing.
 Relevance: The marketing environment of a business has an impact on its
marketing decisions. Thus, every element of the marketing environment
must be taken into account by a marketer when making an ideal choice.
Simply put, a marketing programme cannot be developed or successfully
implemented without considering the marketing environment.
 Uncertainty: The nature of market factors is uncertain, so they can not be
predicted accurately. A good marketer is continually working to predict
various factors and develop effective strategies over time. But since they
change fast, certain factors are difficult to predict in advance. This is also
because of the fact, that technology and fashion have changed more often
recently than ever before.
 Storehouse of Opportunity: Marketing not only offers a threat to the
company, but it also provides new opportunities. Discovering these
opportunities is challenging. Only a skilled and effective marketer can
appropriately spot these opportunities. The marketing manager should
continuously watch and study the environment to uncover these
opportunities. Successful businesses take opportunities and get rid
of threats.
 Sensitive to a Variety of Factors: The marketing environment is highly
sensitive to a variety of factors. These factors may include the mindset or
preferences of the consumer, the rising market demand for goods or
services, changing marketing trends, etc. This atmosphere is highly
sensitive to these aspects in the marketing field. The success of
marketing primarily depends on the satisfaction of customers. For this,
 marketers need to know how consumer needs, tastes, and preferences
change constantly. As a result, marketing organisations must be highly
sensitive to consumer needs, desires, and demands.

Types of Marketing Environment

The marketing environment can be divided into two categories:

1. Company:
The marketing manager usually considers various departments while designing
marketing plans, including accounting, operations, purchasing, research and
development, and finance. The internal environment is created by the
relationships between these departments. Marketing managers must collaborate
closely with them in order to make decisions based on broader strategies and
plans. The production, financial, legal, and human resources teams, along with
the marketing department are in the role of identifying customer needs and
delivering customer value.
2. Suppliers:
The suppliers play a significant role in an organisation's overall network for
delivering value to its customers. Suppliers provide a business with raw
materials, services, or products. The cost and condition of the products that
consumers purchase can be influenced by the prices, services that are available,
and product quality that a supplier offers. Suppliers are those parts of an
organisation that have an impact on its marketing potential and level of
competitiveness. According to Michael Porter, the relationship between an
organisation and its suppliers is strong and stable. This relationship represents the
interdependence of the organisation and the supplier upon each other and their
respective industrial requirements.
Companies usually consider their suppliers as partners and may demand that they
make a commitment to supply customers with high-quality products. The
organisation can decide which supplier can provide the product quality and prices
your consumers have been looking for by researching for a range of prospective
suppliers.

3. Market Intermediaries:
The marketing intermediaries play a significant role in the network used by an
organisation to provide value to customers. Market intermediaries are individuals
or businesses that help an organisation deliver products and services to its target
market. They are individuals or firms who help the business in the promotion,
sales, and distribution of goods to end buyers. It is usually a basic requirement of
all organisations. Market intermediates include distribution
organisations, financial institutions, and middlemen such as wholesalers, retailers,
agents, etc.
Examples include middlemen (agents or merchants) who assist the business in
finding customers, physical distribution businesses like warehouses or
transportation businesses that assist the business in stocking and transporting
goods from their point of origin to their destination, and marketing service
businesses like market research and advertising firms.

4. Customers:
Customers have a significant impact on a business' marketing environment.
Businesses may gather information regarding consumer attitudes
and behaviour in order to depict their future business choices. An organisation
can keep track of changes in consumer preference and behaviour and modify its
 product or service offerings. For instance, a business might change its methods
for product development if it gets bad feedback about a product.
An organisation's main priority is its customers. They can be divided into five
categories:
 Ultimate Customers: These can be individuals or groups of people who use or
consume the company's goods and services.
 Industrial Customers: These clients are primarily small and large businesses
that make purchases of goods and services in order to produce other useful
products. Their primary aim is to achieve organisational goals and make profit.
 Resellers: These include distributors, wholesalers, and retailers. They purchase
goods and services from one location and resell them for profit at various
locations.
 Government and other Non-profit Organisations: They purchase goods and
services, mainly for the consumption of others. These people may be end users
or final customers.
 International Customers: These are consumers across national borders who
purchase goods and services for further business or their own consumption.
They can be individuals, businesses, resellers, or even governments.

5. Competitors:
These are the businesses that manufacture and sell identical goods and services in
the same market. Competitors are part of a company's microenvironment since
they have a direct impact on day-to-day business operations. The competition is
primarily based on pricing and product variation. A business might change its
strategies to help it outperform its competition after assessing its position in the
market. Since competitors sometimes share customers, it is useful to keep an eye
on how they are doing in order to identify ways in which the company can work
for improvement. Hence, marketing managers must also carefully consider and
note various basic aspects of the competitor's environment. The adoption of a
marketing system allows for better results and self-reliance within the firm. It's
crucial to recognise and carefully evaluate existing competitors to become
competent.

6. Public:
The general public is a crucial factor in the microenvironment. The satisfaction of
the general public should be an organisation's top priority, as competitors and
customers are all a part of the general public. It includes any person who interacts
with the company. Further, potential investors and others who recommend
prospective customers to the company might also be considered as part of the
public. One can expand their target market and raise brand awareness by having a
better understanding of the public as a possible customer. The policies and
activities of an organisation have a significant influence on other segments of the
general public. Public relations is, therefore, essential for an organisation's long-
term survival and expansion.