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Business Environment

Micro Environment
Micro Environment is defined as the
nearby environment, under which the firm operates.
The micro environment in marketing includes all those
micro factors that affect business strategy, decision
making and performance. It consists of those elements
which are controllable by the management.
Customers

Media Competitors

Components
of Micro
Employees Environment
Suppliers

Marketing
The general
intermediaries
public
Components of Micro Environment
1. Customers
The customers are the central part of any business as
they tend to attract and retain most of the customers
to generate revenue. Therefore, organizations must
adopt a marketing strategy that attracts the potential
customers and retains the existing customers by taking
into consideration the wants and needs of customers
and by providing the after sales services and value-
added services.
2. Competitors
The competitors of an organization can have a direct
impact on business strategies. The organization must
know how to do a competitive analysis of competitors
and have a competitive advantage. An organization
must understand, what value added services their
competitor is providing or the unique selling point of
their competitors. How they can differentiate from their
competitors. What benefits a company can offer to the
customers which competitors does not offer.
3. Suppliers
Actions of a supplier can influence the business
strategy, as they provide the materials for
production. For instance, if their services will not
reasonable and timely that will affect the
production time and the sales due to delayed
process of production.
4. The general public

 The organisation has a duty to satisfy the public.


Any actions of a company must be considered
from the angle of the general public and how they
are affected. The public have the power to help
you reach goals; just as they can also prevent
from achieving them.
5. Marketing Intermediaries

 If the product the organisation produces is taken to


market by 3rd party resellers or market
intermediaries such as retailers, wholesalers, etc.
then the marketing success is impacted by those
3rd party resellers. For example, if a retail seller is a
reputable name then this reputation can be
leveraged in the marketing of the product.
6. Employees

 Skilled employees can help an organization to


achieve organizational goals and objectives. As
skilled and experienced employees has expertise
to support organization to get success. The training
and development process helps the employees to
work effectively and efficiently in order to achieve
the organizational goals, specifically in service
sector.
7. Media

 The way media acts can make or break an organization.


Organization should manage to keep a good
relationship with media as whatever it shows will
directly influence the organization business. If media
will show positive aspect, this will increase the
business of organization and vice-versa.
Macro Environment
 Macro Environment refers to the
general environment, that can affect the working of
all business enterprises. It consists of all
the forces that shape opportunities, but also pose
threats to the company and and affect the micro-
environment.
Components of Macro Environment
Components of Macro Environment

1. Demographic forces
Different market segments are typically impacted by
common demographic forces, including
country/region; age; ethnicity; education level;
household lifestyle; cultural characteristics and
movements.
2. Economic factors

 The Economic forces relate to factors that


affect consumer purchasing power and
spending patterns. The economic
environment can impact both the
organisation’s production and the
consumer’s decision making process.
3. Technological factors

 The skills and knowledge applied to the


production, and the technology and materials
needed for production of products and services
can also impact the smooth running of the
business and must be considered.
4. Political and legal forces

 Sound marketing decisions should always


take into account political and/or legal
developments relating to the organisation
and its markets.
5. Social and cultural forces

 The Socio-Cultural forces link to factors that affect


society’s basic values, preferences and behaviour.
The basis for these factors is formed by the fact
that people are part of a society and cultural group
that shape their beliefs and values.
6. Natural/physical forces

 The Earth’s renewal of its natural resources such as


forests, agricultural products, marine products, etc
must be taken into account. There are also the
natural non-renewable resources such as oil, coal,
minerals, etc that may also impact the
organisation’s production.
 Micro and macro environments have a significant
impact on the success of marketing campaigns, and
therefore the factors of these environments should
be considered in-depth during the decision making
process of a strategic marketer. Considering these
factors will improve the success of an organisation’s
marketing campaign and the reputation of the brand
in the long term.