Microenvironment

Microenvironment: This lesson covers the microenvironment in greater detail.

It considers the interface between a business and its microenvironment. Let’s
just review what microenvironment is again based upon the earlier lesson on
the marketing environment which contains the topic. Our microenvironment is
the totality of people and other connected groups of people/organisations that
are very close to the business, and which all have a direct and measurable
impact upon the customer experience.

1.Distributors: Distributors are the intermediaries between the manufacturer

and the consumer. Distributors are marketing companies too, and participate in
the marketing process. Distributors are important channels since large
manufacturing brands do not wish to distribute all the way to the final
consumer. For example Coca-Cola cannot have a direct supplier relationship
with every consumer (although it does have a strong brand relationship with
consumers). Intermediaries perform this important distribution role.

2. Employees: Employees are those people that are employed to work for an
organisation. Employees are an important because they drive value through
customer satisfaction and embody the marketing concept. They are the vital
interface between a brand and its customers. People buy from people and your
employers build close customer relationships. Of course managing people and
organizational behaviour/behavior are management disciplines in their own
right. Employees would need to be recruited and trained, motivated and
developed, all of which would support the functions and philosophy of
marketing.
So as we said in our earlier lesson, examples of the influencers would include
your company itself, your suppliers, any marketing or advertising agencies with
whom you have a close working relationship, the segments and markets which
you target and your competition.
Don’t forget to review your stakeholders which are those people and
organisations that interconnect with your business that might not be paying for
your products or services i.e. not your customers. Stakeholders are the publics
with whom you interact for example your neighbours, and other interested
parties. The key to the microenvironment is that it is relatively controllable and
we have some influence over how things happen, whereas with the
macroenvironment we have far less influence.

3.Customers: Customers are vital to our business because without paying

customers we have no business. When we define marketing we often talk about
customer needs, how we identify needs, satisfy them and anticipate them into
the future. Today when tend to focus less on products and services and more on
customer i.e. customer orientation. We think less of the Product Life Cycle (PLC)
and more about the Customer Life Cycle (CLC) whereby we attempt to recruit
and retain customers, and then extend products and services to them
throughout their lives. So know your customers well.

4.Stakeholders: Stakeholders are those members of the microenvironment that

have a direct influence on your business although they are not generally paying
customers. Employees (see below) are stakeholders in your business. The
government or governments of countries in which you trade are all
stakeholders. Your local community or neighbours are stakeholders, for example
think of the local community’s influence when a car firm wants to build a new
factory, or when an airport wants to build a new runway.

5.Competitors: Competitors influence your actions. If a competitor launches a

new product for example, you will review your own marketing plan.
Competitors, whom are part of your microenvironment and compete for your
customers, might try to take your best employees and might distribute through
the same channels as your company.

On some occasions you might collaborate with a competitor. There are

examples of alliances and joint ventures in the car industry such as those
between Toyota, Peugeot and Citroen in Europe.

6. Suppliers: Suppliers are those companies that supply your business with
goods and services to which you add value through transformation. From a
manufacturing point of view suppliers would supply raw materials and
components which are transformed into finished goods. From a retail
perspective suppliers would deliver produce which is broken down from bulk,
packaged and merchandised in stores to attract customers and consumers.
Today suppliers are a vital part of the supply chain, which sees valued-added at
all stages from conception to consumption (and post-purchase evaluation).

7. Shareholders: As organisations require investment to grow, they may decide to raise money
by floating on the stock market i.e. move from private to public ownership. The introduction of
public shareholders brings new pressures as public shareholders want a return from the money
they have invested in the company. Shareholder pressure to increase profits will affect
organisational strategy. Relationships with shareholders need to be managed carefully as rapid
short term increases in profit could detrimentally affect the long term success of the business.
8.Marketing intermediaries:Marketing intermediaries help the company to promote,sell and distribute ist
to final buyers .They include reseller,physical distribution firms, marketing service agencies and financial
intermediaries.

9.Media: Positive media attention can “make” an organisation (or its products) and negative
media attention can “break” an organisation. Organisations need to mange the media so that the
media help promote the positive things about the organisation and reduce the impact of a
negative event on their reputation. Some organisations will even employ public relations (PR)
consultants to help them manage a particular event or incident.

Consumer television programmes with a wide and more direct audience can also have a very
powerful impact on the success of an organisation. Some businesses recognise this and will
change their reaction when consumers mention that they are going to contact a consumer
television programme or the newspapers about the business.

10.Investors:Shareholders and investors may help fund your company at start-up or as you look
to grow. Without funds to build and expand, you likely can't operate a business. You could look
to creditors, but you have to repay loans with interest. By taking on investors, you share the
risks of operating and often gain support and expertise. You do give up some control, though.