The microenvironment

This comprises those elements of the environment which

impinge on the firm and usually its industry, but which does
not affect all firms in all industries.
Definition

 The actors close to the company that affect its

ability to serve its customers

 Those elements which are closest to the company

and which exert the greatest and most direct
influence on its ability to deal with its markets
Elements of the Microenvironment

Composed of the following elements:

 The organization itself
 The competition
 Customers
 Distribution network
 Suppliers
 Publics
The company

 In designing marketing plans, groups such as top management,

finance, research and development, procurement, operations,
marketing and finance are taken into account.
 All these interrelated groups form the internal environment

 Top managers set the company’s mission, objectives, broad

strategies and policies
 Other functional managers make decisions within the strategies and
plans made by top managers
Suppliers

 They form an important link in the company’s overall

customer value delivery net-work.
 They provide the resources needed by the company to
produce goods and services
 Supplier problems can seriously affect marketing
 Most marketers today treat their suppliers as partners in
creating and delivering customer value
Competitors

 According to the marketing concept, a company must provide

greater customer value and satisfaction than its competitors, in order
to be successful
 Marketers must also gain strategic advantage by positioning their
offerings strongly against competitors offering in the minds of
consumers.
 No single competitive strategy is best for all companies.
 Each firm should consider its own size and industry position
compared to those of its competitors
Marketing Intermediaries

 These help the company promote, sell and distribute its

product to final buyers.
 They include:
 Resellers
 Physical distribution firms
 Marketing services agencies
 Financial intermediaries
Resellers

 These are distribution channel firms that help the company

find customers and make sales to them
 They include wholesalers and retailers who buy and resell
merchandise
 There are large and growing reseller organisations, such as
Walmart, Home Depot, Best Buy, Shoprite, Melcom etc.
 Some have enough power to dictate terms or even shut
smaller manufacturers out of large markets.
Physical distribution firms

 These help the company stock and move

goods from their point of origin to their
destination
Marketing services agencies

 These include:
 marketing research firms.
 Advertising agencies
 Media firms
 Media consulting firms, that help the company target and
promote its products to the right markets.
Financial intermediaries

 These include banks, credit companies, insurance

companies and other businesses that help finance
transactions or insure against the risks associated
with the buying and selling of goods
 Like suppliers, marketing intermediaries form an
important component of the company’s overall
value delivery network
Publics

 The company’s marketing environment also include

various publics
 This is any group that has an actual or potential interest in
or impact on an organization’s ability to achieve its
objectives
 These include: financial publics, media publics,
government publics, citizen-action publics, local publics,
general public, internal publics
Financial Publics

 This group influences the company’s ability to

obtain funds.
 Major financial publics are: Banks investment
analysts and stockholders
Media publics

 This group carry news, features and editorial

opinion.
 Examples include: newspapers, magazines,
televisions, blogs and other internet media
Government Publics

 Management must take government developments into

account in their day to day activities.
 Marketers must comply with rules and regulation set out
by the government and other government agencies on
advertising, product safety, competition etc.
Local Publics

 This includes neighborhood residents and

community organisations, minority groups,
environmental groups and others.
 They can influence a company’s activities
Citizen-action Publics

 Consumer groups, minority groups and

environmental organisations may question a
company’s marketing decision, thereby,
influencing it
General Public

 The public’s image of a company can

affect it patronage
 The attitude of the general public
towards a firm’s product and activities is
crucial
Internal Publics

 This includes: Board of Directors, Managers,

Workers, Volunteers etc.
 When internal publics feel good about a firm
they work for, this positive feeling spills over
to the external publics.
Customers

 Customers are the most important actors in a

company’s microenvironment
 The entire value network is aimed at serving
target customers and create strong
relationship with them
Types of customer markets

 Individual and households

 Business markets
 Reseller markets
 Government markets
 International markets
Individuals and Households

 These buy goods and services for

personal consumption
Business Markets

 These patronize goods for further

processing or use in their production
process
Reseller Markets

 These buy goods and services to resell at

a profit
Government Markets

 Consists of government agencies that buy

goods and services to produce public services
or transfer the goods and services to others
who need them
International Markets

 These consist of buyers in other countries ,

including consumers, producers or
manufacturers, resellers and governments or
government agencies.
 Each type has unique characteristics which
call for appropriate study by the seller.