micro and macro environmental factors that influence marketing decisions pdf

Micro And Macro Environmental Factors That Influence Marketing Decisions Pdf

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Marketing doesn't happen in a vacuum. Customers, resellers, the law and the economy all affect your business environment. What works in one circumstance is the kiss of death in another.

Marketing and the Organisation’s Micro- and Macro-environments

Every business is affected by a myriad of factors. It is a part of a larger entity known as the business environment. In broad terms, this environment can be divided into two categories. The first one is the micro-environment. This category influences the functionality of a particular business itself.

The latter one is the macro-environment which affects the operation of all existing business entities out there. The two categories may be different, but both are essential to understand in order to truly see your business in its full context.

You have to be knowledgeable about the business environment in order to be able to track and comprehend how various factors affect your company. The micro-environment is basically the environment that has a direct impact on your business. It is related to the particular area where your company operates and can directly affect all of your business processes.

In other words, it consists of all the factors that affect particularly your business. They have the ability to influence your daily proceedings and general performance of the company. Still, the effect that they have is not a long-lasting one. The micro-environment includes customers, suppliers, resellers, competitors, and the general public.

The macro-environment is more general - it is the environment in the economy itself. It has an effect on how all business groups operate, perform, make decisions, and form strategies simultaneously. It is quite dynamic, which means that a business has to constantly track its changes. The factors that make up the macro-environment are economic factors, demographic forces, technological factors, natural and physical forces, political and legal forces, and social and cultural forces.

The kind of customer base that your company attracts, as well as the reasoning behind purchasing your product, are going to highly affect the way you create marketing campaigns. Your customers can be B2C, B2B, international, local, and so on.

If a supplier of a particular product is the largest, or even the only one, they are certainly going to have a big influence on how successful your business is. If you decide to sell your product via a third party reseller, or middlemen such as wholesalers and retailers, then the success of your marketing is going to be highly dependent on them.

As a link between you and the customer, they are important in terms of these factors:. Logically, every business that sells the same or a similar kind of product as you do is your competition on the market. So, their sale and marketing tactics matter to you a lot. You need to answer various questions, such as how their product and its price affects yours and how you can make use of that in order to gain an edge over them.

Of course, every business organization has in its best interest to appease to the general public. Every step that you take needs to be viewed from their perspective as well.

It is extremely important how your actions affect others because their opinion can be the one thing that either pushes you towards success or pulls you down from the pedestal. Each and every chunk of the market is affected by universal demographic forces. These are age, education level, cultural characteristics, country and region, lifestyle, and so on. These factors are related to skills and ability that are implemented into production, as well as all the materials and technology that a particular product requires to be made.

They are essential and can have a big impact on how well your business is running. It boils down to even the most basic factors, such as what kind of maintenance trolleys you use in order to preserve your tools and equipment for as long as you possibly can. Every business must also take into account the very planet and its resources. There are those that can be renewed, such as forests and agricultural products, and those that cannot, such as coal, minerals, oil, and the like.

Both are strongly related to production. So, natural and physical forces can be:. The market develops according to the political and legal environment in various areas. This means that every business needs to be up to date with such forces worldwide in order to be able to make the right decisions. Finally, it is crucial to understand that the product that you bring to the market can have a strong impact on society. For example, your production needs to eliminate every practice that is hazardous to society, and show that it is socially responsible.

There is a wide variety of social and cultural factors, some of them being:. In terms of strengths, you should ask yourself what you are good at, what value you bring, what kind of difference you make, and so on. On the other hand, when it comes to weaknesses, you need to evaluate your dependency on outside vendors, aspects that need to be improved, and so on. Opportunities are related to favorable circumstances that the company needs to make use of in order to improve its position on the market.

Threats are factors that cannot be controlled but need to be acknowledged. This includes political, economic, and customer trends, as well as debts and costs. Both micro and macro factors have a strong influence on how successful your business is. Every decision that you make needs to take these two environments into consideration. Your marketing strategies have to be based on them as well, if you truly want them to be lucrative, and retain a reputable position on the market.

Summer Follow Updated: February 01, Table of contents What is the micro-environment? What is the macro-environment? Micro-environment factors: Customers The kind of customer base that your company attracts, as well as the reasoning behind purchasing your product, are going to highly affect the way you create marketing campaigns.

Important factors related to customers are: Stability of demand Prospects of sale growth Relative profitability Intensity of competition Suppliers If a supplier of a particular product is the largest, or even the only one, they are certainly going to have a big influence on how successful your business is.

The suppliers are extremely important factors as: Key link in the value delivery process Insurance that your business has the necessary resources Essential determinants in terms of price increase or decrease Resellers If you decide to sell your product via a third party reseller, or middlemen such as wholesalers and retailers, then the success of your marketing is going to be highly dependent on them.

As a link between you and the customer, they are important in terms of these factors: Promotion Sale Distribution Marketing Financial mediation Competitors Logically, every business that sells the same or a similar kind of product as you do is your competition on the market. The three factors that matter in this case are: Desire competition Product form competition Brand competition The general public Of course, every business organization has in its best interest to appease to the general public.

The crucial variables include: How income variables influence business Age variables that affect business Geographic Region Variables Education Level as a Variable Technological factors These factors are related to skills and ability that are implemented into production, as well as all the materials and technology that a particular product requires to be made.

So, natural and physical forces can be: Climate change Pollution Weather Availability of both non-renewable and renewable resources Laws that regulate the environment Survival of particular biological species Political and legal forces The market develops according to the political and legal environment in various areas.

There is a wide variety of social and cultural factors, some of them being: Purchasing habits Level of education Religion and beliefs Consciousness about health issues Social classes Structure and size of a family Growth rate of the population Emigration and immigration rates Life expectancy rates and age distribution Different lifestyles SWOT analysis The SWOT analysis Strengths, Weaknesses, Opportunities, and Threats is useful both for understanding the micro and the macro factors.

In Summation Both micro and macro factors have a strong influence on how successful your business is. Abandoned cart email. Free Download. New Posts March 02, February People also searched for micro and macro environmental factors affecting business pdf macro environment factors affecting business micro and macro environmental factors micro and macro factors affecting business environment macro factors affecting business macroeconomic factors affecting business micro and macro business environment micro and macro environment factors.

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Marketing and the Organisation’s Micro- and Macro-environments

Every business is affected by a myriad of factors. It is a part of a larger entity known as the business environment. In broad terms, this environment can be divided into two categories. The first one is the micro-environment. This category influences the functionality of a particular business itself.

AC 2.1 Macro and Micro Environmental Factors that Influences the Marketing Decisions

Organizations operate businesses in a business environment that consists of different factors. The business environment is categorized as Micro-environment and Macro-environment. Business activities are directly affected by micro-environment while macro-environment leaves an indirect impact on all businesses on a large-scale.

Marketing pp Cite as. The term micro-environment denotes those elements over which the marketing firm has control or which it can use in order to gain information that will better help it in its marketing operations. The objective of marketing philosophy as discussed in Chapter 1 is to make profits through satisfying customers. This is accomplished through the manipulation of the variables over which a company has control in such a way as to optimise this objective. In this case the ingredients are individual elements that marketing can manipulate into the most appropriate mix.

Macroenvironmental Forces Affecting Marketing

Difference Between Micro and Macro Environment

Constantly watching and adapting to the changing marketing environment is important because the marketing environment offers both opportunities and threats. For example, an alliance with the supplier and distributor may help an organization to get a competitive edge over its rivals. On the other hand entry of many competitors poses a threat to the organization as some of their customers may shift to a new seller.

Every business organization is a part of the business environment, within which it operates. It is broadly classified into two categories, i. While microenvironment has a direct impact on business activities, the macro environment is a general business environment, which influences all business groups at large. It is important to learn the business environment, so as to understand the effect of various forces on business. Take a read of the given article to know the difference between microenvironment and macro environment. Basis for Comparison Micro Environment Macro Environment Meaning Micro environment is defined as the nearby environment, under which the firm operates. Macro environment refers to the general environment, that can affect the working of all business enterprises.


there can be distinguished: a market size and growth, an innovation Figure 1. Macro and micro-environmental factors which influence location decisions of companies. Source: own mideastjustice.org (accessed. 20 September.


Marketing Environment: Macro and Micro Marketing Environment

Macro environment factors affect a business in a many ways. Efficient financial management calls for better financial decisions. This is only possible when every factor is reviewed which can affect the decision in any way and macro environment is one of the most important factors. This has made financial management more critical and sensitive for any business. Effective evaluation of projects and other situations is very critical in financial decisions.

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Every business is affected by macroenvironmental forces. They can increase or decrease the need for your product, or create entirely new product needs. Raw material costs might be driven up or down. New target markets might be created or old ones changed.

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2 Comments

  1. Ron W.

    This chapter explains the external environmental factors, including; political, The political analysis relates to how governments influence the companies' strategy and relating to the various forces in the macro (external) and micro (​internal).

    13.04.2021 at 19:07 Reply
  2. Mason B.

    The marketing environment refers to all internal and external factors, which directly or indirectly influence the organization's decisions related to marketing activities. Internal Difference between Macro and Micro Environment of Marketing.

    18.04.2021 at 05:16 Reply

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