Meaning, Definition and Characteristics of Marketing Environment
Table of Content:-
Marketing Environment Meaning
The environment means the external objects, surroundings, influences or circumstances under which someone or something exists. The environment of any organisation is the aggregate of all events, conditions, and influences that surround and affect it. Since the environment influences an organisation in many ways, its understanding is of crucial importance. The concept of environment can be understood by looking at some of its features.
Related Article: International Business Environment
The marketing activities of a business firm are affected by a large number of environmental factors that surround the company. These factors or forces influence the decision-making capability of the company. The factors or forces are collectively called the marketing environment. It comprises all those forces, which have an impact on the market and marketing efforts of the enterprise.
Marketing Environment Definition
According to Philip Kotler, “Marketing environment refers to external factors and forces that affect the company’s ability to develop and maintain a successful relationship with its target customers”.
For example, the relevant environment for a car tyre manufacturer may be the car manufacturers and buyers the tyre manufacturing technology, the tax structure, import-export regulations, the distributors, dealers, competitors, etc. In addition to these, the company has to consider its manufacturing capabilities in terms of production capacity, the technology used finance, salesforce, etc.
Related Article:- Nature of Marketing
The marketing environment across India is changing rapidly and business leaders are under increasing pressure to cope with this dynamic macro-environment. The IT strategies of organisations are also witnessing corresponding modifications, realignments and shifts to stay competitive, gain market share or reach out to new markets.
Characteristics of Marketing Environment
The Characteristics of the Marketing Environment are discussed below:
1) Marketing Environment is Complex: The marketing environment is quite complex. It consists of a large number of factors that are interrelated and interdependent. Any change in one factor may change in other factors. However, the entre of interrelationships and interdependencies among the various is not fixed Therefore, predictability of the environment becomes a difficult exercise.
2) Marketing Environment is Dynamic: The marketing environment is constantly changing in nature Due to the many and varied influences operating there is dynamism in the environment causing it to continuously change its shape and character.
3) Marketing Environment is Multi-Faceted: What shape and character a marketing environment assumes depends on the perception of the observer. A particular change in the marketing environment, or a new development, may be viewed differently by different observers. This is frequently seen when the same development is welcomed as an opportunity by one organisation while another organisation perceives it as a threat to itself.
4) Marketing Environment has a Far-Reaching Impact: The marketing environment has a far-reaching impact on organisations. The growth and profitability of an organisation depend critically on environmental change has an impact on the organisation in several different ways.
Since the marketing environment is dynamic, complex, multi-faceted and has a far-reaching impact, dividing it into external and internal parts enables us to understand it better.
Need for Studying Marketing Environment
1) Knowledge of the Marketing Environment is Central to Marketing Management:
Marketing management rests squarely on the knowledge of the marketing environment. Environment plays a crucial role in marketing and securing the right fit between the environment and the firm, using the marketing mix as the tool is the crux of marketing.
The firm has to know where the environment is heading, what trends are emerging therein and it should be its response to the environmental changes. Only by analysing the environment, can the firm grapple with these problems.
2) Strategic Response to Environment is Possible only with Proper Environment Analysis:
Facilitating the corporation’s strategic response to the changes taking place in environmental factors is the ultimate purpose of environment analysis. The company has to come up with alternative programmes and strategies in line with environmental realities. This is possible only with proper environmental analysis.
It helps strategic response by highlighting opportunities, the pursuit of which will help the company to attain its objectives. It helps assess the attractiveness and probability position of these opportunities and helps to prepare a shortlist of those which are relevant to the company and which can be pursued by it.
3) Spotting the Opportunities and Threats:
Spotting opportunities and threats is the central purpose of the marketing environment. It is in the environment that the company finds its opportunities, it is in the environment that it finds the threats it has to encounter, and it is by tapping the opportunities present and countering the threats embedded therein that the company achieves its growth objective. The starting point is thus to spot the threats and opportunities.
4) Task Involved in Marketing Environment Analysis:
Marketing environment analysis is the process of gathering, filtering and analysing information relating to the marketing environment. Involved in the process are the duties of monitoring the changes taking place in the environment and forecasting the future position in respect of each of the factors. The analysis spots the opportunities and threats in the environment and pinpoints the ones that are specifically relevant to the company.
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