Question
What do you understand by marketing environment? Discuss the impact of demonetization (ban of Rs. 500 and Rs. 1000 notes) in November, 2016 on the marketing environment in India in the short term and long term.
Answer :
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Skip in 10
The Marketing Environment includes the Internal factors (employees, customers, shareholders, retailers & distributors, etc.) and the External factors( political, legal, social, technological, economic) that surround the business and influence its marketing operations.
Some of these factors are controllable while some are uncontrollable and require business operations to change accordingly. Firms must be well aware of its marketing environment in which it is operating to overcome the negative impact the environment factors are imposing on firm’s marketing activities.
The marketing environment can be broadly classified into three parts:
- Internal Environment – The Internal Marketing Environment includes all the factors that are within the organization and affects the overall business operations. These factors include labor, inventory, company policy, logistics, budget, capital assets, etc. which are a part of the organization and affects the marketing decision and its relationship with the customers. These factors can be controlled by the firm.
- Microenvironment- The Micro Marketing Environment includes all those factors that are closely associated with the operations of the business and influences its functioning. The microenvironment factors include customers, employees, suppliers, retailers & distributors, shareholders, Competitors, Government and General Public. These factors are controllable to some extent.
These factors are further elaborated:
· Customers– Every business revolves around fulfilling the customer’s needs and wants. Thus, each marketing strategy is customer oriented that focuses on understanding the need of the customers and offering the best product that fulfills their needs.
· Employees– Employees are the main component of a business who contributes significantly to its success. The quality of employees depends on the training and motivation sessions given to them. Thus, Training & Development is crucial to impart marketing skills in an individual.
· Suppliers– Suppliers are the persons from whom the material is purchased to make a finished good and hence are very important for the organization. It is crucial to identify the suppliers existing in the market and choose the best that fulfills the firm’s requirement.
· Retailers & Distributors– The channel partners play an imperative role in determining the success of marketing operations. Being in direct touch with customers they can give suggestions about customer’s desires regarding a product and its services.
· Competitors– Keeping a close watch on competitors enables a company to design its marketing strategy according to the trend prevailing in the market.
· Shareholders– Shareholders are the owners of the company, and every firm has an objective of maximizing its shareholder’s wealth. Thus, marketing activities should be undertaken keeping in mind the returns to shareholders.
· Government– The Government departments make several policies viz. Pricing policy, credit
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