UNIT -2

MARKETING ENVIRONMENT
INTRODUCTION
Marketing environment are marketing terms that refer to factors and
forces that affect a firm’s ability to build and maintain successful
customer relationships. The business environment has defined as
“the totality of physical and social factors that are taken directly into
consideration in the decision making behaviour of individuals in the
organization.”
The three levels of the environment are as follows:
1. Internal environment – the internal elements of the
organization used to create, communicate and deliver market
offerings.
2. External micro environment – small forces external the
company that affect its ability to serve its customers.
3. External macro environment – larger societal forces that affect
the survival of the organization.
NEEDS AND WANTS OF ENVIRONMENT
Needs are things that satisfy the basic requirement. Wants are
requests directed to specific types of items. Demands are requests
for specific products that the buyer is willing to and able to pay for.
In a consumer market examples are usually very clear to identify.
SWOT AND PEST
When planning a project it is important to learn about the internal
and external factors that can affect the project. There are some
excellent strategic planning methods that you can use analyze all
these factors. SWOT analyze and PEST analysis are two of the most
frequently used planning methods.
SWOT , when broken down simply means analyzing the:
 Strengths – The advantages you have over the competition
concerning this project.
 Weakness – The disadvantages you have internally compared
with your competitors.
 Opportunities – Current external trends which are waiting to be
taken advantage of
 Threats – External movements which may cause a problem and
have a negative impact on your business.
PEST stands for the analysis of the external factors which are
beneficial when conducting research before beginning a new project.
These factors are as follows:
 Political – Laws , global issues , legislation and regulations
which may have an effect on your business either immediately
or in the future.
 Economic – Taxes , interest rates , inflation , the stock markets
and consumer confidence all need to be taken into account.
INTERNAL AND EXTERNAL FACTORS OF MARKETING
Internal factors (controlable by internal management)
 Resources
 Employees skills
 Capabilities
 Management values and corporate culture
 Core competencies
 Stakeholders goal
 Current strategies and success
External factors (things outside a business that will have an impact
on its success)
 Political
 Economic (inflation and unemployment)
 Social
 Technological
 Environmental
 Competitive
 Legal
 Demographic
 International
 Ethical
Each of the external factors can affect a business positively or
negatively . In some cases it can even be both.