The Micro -Environment:
The micro-environment is made up of factors that impact closely on the organization, and typically consists of the following elements:
Competitors:
Frequently firms fail to recognize who their competitors are .It is not at all unusual for firms to define competition too narrowly, simply because they define their business too narrowly.For instance, a bus company should reasonably define the competitors as not other bus companies but the entire transportation business such as competition arising from railways, taxis etc.also.
A high street retailer might focus on competition from other high street retailers, and not recognize a dot. com company, which may be posing a greater threat to his business.Grouping consumer with similar needs and characteristics is called segmentation.Since each segment has different needs, the threat from competition will come from different sources in each case. At the extreme, all businesses compete with all other for consumer money ;the consumers have only a fixed amount to spend. Competitors can therefore be either firms supplying similar products or firms competing for the consumer's hard-earned money ,but either way marketers need to provide a product that meets consumer's needs better than the products offered by the competition.
Customers:
Customer may change their needs, or may even disappear altogether.Some years ago, the American company Johnson & Johnson become aware that much larger quantities of its baby shampoo and talcum powder were being sold.Research discovered that many adults were using the products on themselves.A new category of customer had thus become apparent,and the accurately; however,it is also important to recognize that some segments may be disappearing, and to know when to switch the marketing effort to more lucrative segments.
Suppliers:
Suppliers also from part of the micro-environment since they also impact the company .At first sight, suppliers would appear to be outside the scope of the marketing department, but in fact the firm relies heavily on the goodwill of its suppliers too. A supplier can easily cause an adverse effect within a film by supplying shoddy goods, or failing to meet delivery dates, and this will inevitably impact on the firm's than for other but most organizations need to monitor their suppliers and ensure that they are providing appropriate goods.
Intermediaries:
Intermediaries are the retailers, wholesalers , agents and others who distribute the firm's goods.Relationships with these intermediaries need to be good if the firm is no succeed in getting its goods to the final consumer successfully as a part of the logistics approach.Intermediaries may also include marketing services providers such as research agencies, advertising agencies, distribution companies providing transport and warehousing, and exhibition organists-in fact,any individuals or organizations that stand between the company and the consumer and and help in getting the goods out.As with suppliers, it pays dividends to establish good relationship with intermediaries , mainly by sharing information and by maintaining good communication links.
public's:
Finally , some of the organizations public's from part of the micro-environment .Public s is a generic term encompassing all the company .The range of public's can include financial public's, local public's, government public's, media public's, citizen action public's and many others.The marketing activity concerned with these public's in called public relations.
Financial public's:
Might include the banks and shareholder who control the firm's finances, and who can pressure the firm to behave in particular ways.These pressure can be strong, and can even threaten the
firm's existence; firms are often compelled by their financial public's to do things they would otherwise prefer not to.
Local public's:
Consist mainly of the firm's neighbors. These local organizations and individuals may well pressure the company to take local organizations and individuals may well pressure the company to take local actions, for example clean up pollution or sponsor local charities.Obtaining the goodwill of the local public will , of course, make it much easier for the company to live harmoniously with its neighbors and will reduce short-term local difficulties.
The Macro-Environment:
The macro-environment includes the major forces that act not only on the company itself, but also on its competitors and on element in the micro-environment .The macro-environment tends to be harder to influence than does the micro-environment,but this does not mean that companies must simply remain passive; the inability to control does not imply an inability to influenced by good public relations activities.
The main elements of the macro-environment are:
1.demographic factors
2.economic factors
3.political factors
4.legal factors
5.social-cultural factors
6.ecological and geographical factors
7.technological factors
Demographic factors:
Demographics is the study of population factors such as the proportion of the population who are a given race, ginger, location or occupation, and also of such general factors as population
density , size of population and location.Demographic changes can have major effects on companies.Likewise, change in the ethnic composition of cities, or in the population concentration cause changes in the type of goods and services demanded.
Economic Factors:
Economic factors encompass such areas as the boom/bust cycle , and the growth in unemployment in some part of the county as a result of the closing of traditional industries.Macro-economy factors deal with the managements of demand in the economy -the main mechanisms government s use for this are interest rate control,taxation policy and government expenditure. If the government increases expenditure or reduces taxation , there will be more money in the economy and and demand will rise.If the taxation is increased or expenditure is cut, these will be less money for consumers to spend , so demand will shrink.Rises in interest rates tend to reduce demand, as home loans becomes more expensive and credit card charges rise.
Political Factors:
Political factors often impact on businesses:recent examples are the worldwide movement towards privatization of former government-owned utilities and businesses, and the shift away from protection of worker's rights.Firms need to be able to respond to the prevailing political climate,and adjust the marketing policy accordingly.
Legal factors:
Legal factors follow on from political factors, in that government often pass laws which affect business.Clearly businesses must stay within the law, but it is increasingly difficult to be sure what the law says , and to know what changes in the law might be imminent.
Socio-cultural Factors:
Socio-cultural factors are those areas that involve the shared beliefs and attitudes of the population.People learn to behave in particular ways as a result of feedback from the rest of society behavior and attitudes that are regarded as inappropriate or rude are quickly modified, and also people develop expectations about how other people should behave. These beliefs are not laws of nature, but merely a consensus view of what should happen,These has certainly been many times where these standards have not applied.These prevailing beliefs and attitudes change over a period of time owing to changes in the world environment , changes in ethnic mix and changes in technology.
Ecological and Geographical Factors:
The increasing scarcity of raw materials, the problems of disposing of waste materials, and the difficulty of finding appropriate locations for industrial complexes, particularly those with a major environmental impact, are all factors that are seriously affecting the business decision making framework .In a marketing context, firms are having to take account of public views on these issues and are often subjected to pressure from organized groups as well as individuals.Often the most effective way to deal with these issues is to begin by consulting the pressure groups concerned, so that disagreements can be resolved.
Technological Factors:
Technological advances in recent years have been rapid, and have affected almost all areas of life.Whole new industries have appeared : for example, satellite TV stations, cable networks, the Internet,CD recordings and virtual reality, and computer aided design systems .All of these industries were unknown even twenty years ago.It seems likely that technological change will continue to increase, and that more new industries will appear in future.The corollary , of course, is that some old industries from entirely unexpected directions.Identifying these trends in advance is extremely difficult, but not impossible.
Governmental public's:
The local, national and international agencies that restrict the company's activities by passing legislation , setting interest rates ,and fixing exchange rates.Governmental public's can be influenced by lobbying and by trade associations.
Media public's:
Press, television, and radio services carry news, features and advertising that can aid the firm's marketing,or conversely can damage a firm's reputation.Public relations departments go to great lengths to ensure that positive images of the firm are conveyed.
Citizen Action Public's:
The pressure groups such as Greenpeace or consumer's rights groups who lobby manufacturers and others in order to improve life for the public at large.
The Internal Environment:
Internal Public's:
Are the employees of the company .Although employees are part of the internal environment rather than the external environment , activities directed at the external environment will often
impinge on employee attitudes; likewise employee attitudes frequently impinge on the external public's. Sometimes employees convey a negative image of the organization they work for, and this is bound to have an effect on the perceptions of a the wider public. From the view point of a marketer, the internal environment is as important as the external one.The members of the organization can give a positive or negative image of the firm after they leave work for the day and interact with their families and friends, and even while in work they will usually come into contact with some of the firm's external public's. Since the external public's will regard will regard such communications as being authoritative ,the effect is likely to be stronger than anything else. The days are long gone when the loyalty of staff could be commanded, and giving orders was all that was necessary to ensure obedience.Employees expect to have a degree of autonomy in their daily tasks , and do not feel any particular obligation towards an employer simply by reason of being employed.
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