The Marketing Environment
The marketing environment consists of
three components, also called sub-environments, which are known as the
micro-environment, market environment, and macro-environment. Each of these
sub-environments consists of variables which can influence an enterprise, its
workers and their families.
A. The
Micro-Environment
The micro-environment of an enterprise
refers to all the activities that are executed by that enterprise. An
enterprise must perform diverse activities in order to function properly and to
attain the profit objectives that have been decided on.
The variables in the micro-environment
are discussed below:
The
Product: Managing the product entails planning and
developing the right products and/or services to be marketed by the company’s
executives.
Price:
Determining
the right base price for company’s products is one of the crucial
micro-variable factors to be considered by the enterprise.
Promotion:
Promotion entails those weapons used to inform and persuade the markets,
regarding a company’s products. These include advertising, personal selling,
publicity and sales promotion.
Distribution/Place: This is the management of the marketing
intermediaries for the distribution of the company’s products.
B. The
Market Environment
The key variables in the market
environment are:
·
Consumers
·
Competitors
·
Intermediaries
·
Suppliers.
These variables will influence the
enterprise, which makes it imperative for management to react to opportunities
and threats in the market environment.
Consumers
are
the people buying your enterprise’s products and services. Identifying the
target market for your product or service is therefore one of the most
important management activities to be undertaken by management.
Competitors
are
a natural part of a capitalistic society. We are accustomed to the fact that
various competitors compete for our money in the case of most products and
services. The example of Toyota and the competitive environment in which it
operates illustrates this point.
Intermediaries such as wholesalers and retailers evolved to bridge the
gap between the manufacturer and the supplier.
Suppliers,
an
enterprise is dependent on suppliers to run its business. One such example of a
supplier is the supplier of capital to an enterprise. Traditionally, the
commercial banks are the suppliers of capital to small and medium businesses.
Listed companies such as Nigerian Bottling Company, makers of Coca cola have an
additional supply of capital provided by their shareholders.
C. The
Macro-Environment
It is important to realize that the
enterprise operates within a wider macro-environment, in which variables
directly or indirectly influence the enterprise and its market environment. The
enterprise cannot always control these variables and they must be continually
evaluated to ensure that potential opportunities or threats are correctly
identified. The macro-environment includes;
·
the technological environment
·
the economic environment
·
the social environment
·
the natural or physical environment
·
The institutional/political environment.
The
Technological Environment: This environment is affected by
innovation and change. For example, new manufacturing processes and new
technology may influence the type and quality of clothing being sold by
wholesalers and retailers in Nigeria.
The
economic environment: This variable is well known to
everyone. An increase in the inflation rate, changes in the exchange rate and a
higher rate of personal income tax are examples of how the economic environment
may influence wholesales and retails in Nigeria.
The social environment: Social changes are prevalent throughout the
world and Nigeria in particular. A decline in the population growth rate may
eventually have a negative impact on sales of trendy imported clothing in the
affected market, cultural patterns such as lifestyles, beliefs, norms, values,
folkways, etc. are changing faster than they used to; therefore, management
must be alert to them.
The
natural or physical environment: This variable is of
great concern to people all over the world. Scarce resources for example are utilized
in the packaging of clothing and wastage of packaging material must be of
concern to owners of Enterprises, for example.
The political/governmental, also called institutional environment: This
variable in the macro-environment would be of particular concern to owners of
Enterprises. One example of the effect of this variable would be surcharges on
imported clothing. This would have a direct influence on the selling price of
the clothing sold by Enterprises in Nigeria. Other variables include general
and fiscal policies
STRENGTHS AND
WEAKNESSES OF OPPORTUNITIES FOR AND THREATS TO AN ENTERPRISE (SWOT ANALYSIS)
In order to ensure the success of an
enterprise, the management must take a careful look at the marketing
environment. This can be done by means of a SWOT analysis.
This means that the enterprise’s strengths and weaknesses must be identified,
as well as the opportunities and threats that exist in the environment.
Strengths
may
include specialized management skills, a productive and well-trained workforce,
enough capital, and so on.
Weaknesses
within
the microenvironment may include an obsolete product range, unacceptable levels
of pilferage and lack of capital. Lack of capital is one of the major problems
experienced by small and medium enterprises (SMEs) in Nigeria.
Opportunities
for
the enterprise can be found in the market and macro-environment. For instance,
look around you and you will see that there has literally been an explosion of
fast-food businesses in Nigeria.
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