Banking Marketing Aptitude Marketing Environment Marketing Aptitude - Marketing Environment

Introduction

Marketing environment refers to the factors and forces that affect a firm's ability to build and maintain successful relationship with customers. Some of the factors are controllable, while some others are uncontrollable. It is the responsibility of the marketing manager to change the company's Policies along with the changing environment.

• Nature of Marketing Environment
• Changes as per environment
• Communication
• Challenges
• Wide market

Characteristics of Marketing Environment

• Marketing environment plays a vital role while taking decisions related to marketing.
• Its limit is decided on the basis of geographical factors.
• There are some non-controllable variables included in marketing environment which effect the potentiality of a company and provide new direction to the market.
• New opportunities and risks always rise in the marketing environment which reinforces marketing experiments and research.
• Consumers are divided in homogeneous sections for marketing of a product on the basis of marketing environment.

Components of Marketing Environment

There are following components of marketing environment

• Internal Environment

Forces and actions inside the firm that affect the marketing operation composed of internal stakeholders and the other functional areas within the business organisation are known as internal environment of marketing.

• The internal environment includes
• The human resource department
• The operations department
• The accounting and finance department
• The research and development department

• External Environment

The external environment is composed of

1. Micro environment
2. Macro environment

Both these types of marketing environment affect each other to some extent.

• Micro Environment

The micro environment refers to the forces that close to the company and affect its ability to serve its customers. It includes die-company itself, its suppliers, marketing intermediaries, customer markets and public.

Factors affecting micro environment are

(i) Company The company aspect of micro environment refers to the internal environment of the company this includes all departments like management, finance, research and development, purchasing operations and accounting. Each of these departments has an impact on marketing decisions.

(ii) Marketing intermediaries marketing intermediaries refers to resellers, wholesaler physical distribution firms, marketing services agencies and financial intermediaries.

(iii) Customers There are different type of customer markets like consumer markets, business markets, government markets, international markets and reseller markets. It is different from the reseller market. The reseller market includes business that purchases goods for resell which gives profit.

(iv) Public the final aspect of the micro environment is public. They may be financial citizen action public, local public, general public.

• Macro Environment

The macro environment refers to all forces that are part of the larger society and affect the micro environment. It includes concepts like demography, economy, natural   forces, technology, politics and culture.

Factors affecting macro environment are

(i) Demographic Environment Demographic data help in preparing geographical marketing plans; household marketing plans, age and sexwise plans. It influences behaviour of consumers which, in turn, will have direct impact on market place. A marketer must communicate with consumers, anticipate problems, respond to complaints and make sure that the firm operates properly and smoothly.

(ii) Social-Cultural Environment It includes culture, traditions, beliefs, values and life styles of the people. Social responsibility has crept into the marketing literature as an alternative to the market concept.

(iii) Economic Environment The economic environment depends on current income, prices, savings, debt and credit availability, inflation rate, tax rates, etc.

(iv) Political-Legal Environment The political and legal environment consists of laws, government agencies and pressure groups that influence various organisations and individuals. The other laws viz labour laws, corporate laws,   constitutional laws, tax laws, pollution control act, industrial policy also have a great impact on markets.

(v) Technological Environment It includes technology selection, change in technology and governments approach in respect of economy's growth rate.

(vi) Natural Environment It involves the natural resources that are needed as inputs by marketers. In India, many NGOs have continuously fought against indiscriminate mining, use of harmful pesticides,   deforestation, introduction of genetically modified foods, pollution of rivers and underground water. Uncontrollable   factors   of   marketing environment are policy of the firm, organizational structure, indirect environment.

PEST Analysis

PEST analysis describes a framework of macro environmental   factors   used   in   the environmental scanning component of strategic management.

P — Political factors

E — Economic factors

S — Socio-Cultural factors

T — Technological factors

It is a part of the external analysis, while conducting a strategic analysis or doing market research. It is useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.

SWOT Analysis

The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal issues (strengths and weakness) and external issues (opportunities and threats).

• Strength

It is the characteristic of the business or project that give it an advantage over others.

• Weakness

It is the characteristic that place the business or project at a disadvantage relative to others.

• Opportunities

It is an element that the project could exploit to its   advantage.

• Threats

It is an element in the environment that could cause trouble for the business or project. Specifically, SWOT is a basic, straightforward model that assesses what an organisation can and cannot do as well as its potential opportunities and threats.

Tit - Bits

• In the banking environment, staff is the internal factor and consumer is the external factor.
• Occupation is an element of demographic environment.
• Labour policy is not a direct factor of the marketing environment.
• Good competition helps in improved customer service.
• Marketing opportunities mean scope for marketing.
• Market space means scope available for selling.
• Market information means knowledge of related markets.