Business environment comprises the exterior factors that influence the company operations either direct or indirect.
Marketing environment is a component of business environment that influences the company’s capacity to promote and perform efficient operations on the market.
The environment can not be influenced by the company as it is comprised of external factors.
An influence on these factors can be exerted, but it depends on the company’s power and size on the market. There are big companies that have a major influence on environment factors and small businesses that need to adapt continuously to environment changes.
Considering this, the company’s attitude towards the business environment can be:
- Active – The company tries to influence the environment factors
- Passive – The company continually adapts to the environment changes
Despite the company’s attitude, the environment always exerts influence on it, externalized in:
The elements of marketing environment can be classified in:
- Marketing Micro-environment – the factors that influence directly the ability of the company to achieve an offer standard desired by the customers
- Marketing Macro-environment – factors that affect the society as a whole and influence the company indirectly
Micro-environment factors interact directly with the company and create pressure that produces a certain behavior of the company.
There are opportunities the company can capitalize in its relations with business partners, but also threats to be avoided or prevented.
Marketing micro-environment can also be classified in internal and external micro-environment.
Internal micro-environment consists of strategic orientations and organization structures that capitalize on the human, material and financial resources of the company.
Internal micro-environment factors are:
- The general vision of the company. This is developed by the management and leads the company’s activities to operations focused on production, technology, sales or market. It’s very important that the focus is on marketing, trying to appease both company’s and market’s objectives.
- Marketing integration. Related to the general vision of the company. The marketing function must be an integrator function for all other functions, so that the marketing concept can be promoted.
- Organizational culture. It represents a series of values and beliefs promoted company-wide, being a result of cultural elements that characterize the people that run the business or support it: employees, managers, shareholders, union. Development of organizational culture is crucial.
- Employees. This the main internal micro-environmental factor that influences the company, considering that the employees are involved in all company’s operations. Employees’ satisfaction is important because it results in customer satisfaction.
External micro-environment comprises the external factors that affect directly the company and exert mutual influence.
External micro-environment factors are:
- Financial and material suppliers. Can create opportunities and threats related to supplier’s disappearance or disconnection of usual supply. This sort of situations can lead to operation blockage caused by lack of resources. Therefor, the relation between supplier and company need to be long term, strategic partnerships.
- Marketing intermediates. Commissioners, brokers, transporters, logistics, consultants need also to be in strategic, long term partnerships with the company.
- Customers. Individuals or companies that buy our products. They are the main micro-environment element because they assure operation continuity by purchasing the company’s products for consumption or use. Company’s operations focus need to be on customer satisfaction and relational marketing implementation.
- Competitors. They are the micro-environment factor that causes most of the treats, being focused on reaching to more and more market segments, also by drawing customers from competitors over the market. The main concern relating to competitors in gaining competitive advantages.
- The public. Mass-media, public administration, politic groups, shareholders, all these factors can create both opportunities and threats for the company.
Marketing macro-environment can also be classified in national macro-environment and international macro-environment.
National macro-environment comprises factors that affect the entire society and have also a influence on the company but long term and wide spread.
National macro-environment factors are:
- Social factors: Demographic factors, related to the population structure in age, household, education, employment, geographical location.
Cultural factors, related to values, beliefs, religion, customs.
- Technological factors
- Economical factors (economic policy, economy development, purchasing power)
- Ecological factors
- Political and legal factors
International macro-environment is a result of economic globalization, externalized in economic integration.
The factors that influence the international macro-environment are:
- Commercial policies (regarding customs, import, export)
- International investment fluxes
- Financial and monetary international processes
- International markets
- Treaties between countries.