Any individual, an organization, or government institution that intends to invest in any region, often consider the market forces and also considers future development as far as their business endeavors are concerned. The market forces that determine profits or losses are the fundamentals that investors take into consideration. The room for future development and expansion of investment is also a key factor considered by any investor.
A market may be defined as a variety of systems, infrastructure, procedures, institutions or organizations, and social relations where two or more parties engage in exchange of goods, services, and labor that may be in form of barter or relying on sellers offering their goods, services or labor in exchange for money from buyers. A market is a process through which the prices of goods and services are established. It allows any trade-able item to be evaluated and finally priced.
This is a marketing term used to refer to all the forces outside of marketing that affect marketing management's capacity to build a successful relationship with his or her target clientele. Marketing environment mainly consists of three levels namely: microenvironment, internal environment, and the macro environment.
There are several aspects of the microenvironment that includes: company micro-environment, marketing intermediaries, customer market, competitors, and the public.
To start with, the definition of company environment aspect of micro-environment refers to the internal environment of the company or organization and includes Departmentalization departments such as finance, research, management, purchasing, and development. Each of these departments influences marketing decisions. To maintain a strong customer relationship, marketing managers must always watch supply availability and other trends dealing with suppliers to ensure that products are delivered to customers in the required time frame.
A marketing intermediaries aspect of micro-environment are the people that help promote the company, distribute and sell the products of the company. They refer to the resellers, physical distribution, marketing service agents, and financial intermediaries. Resellers' holds and sells the company products. Physical distribution firms stores and transports company products from point of production to where they are needed by the customers. Marketing agents offer services such as marketing research, consulting, and adverting and the financial intermediaries include institutions such as credit companies, insurance, and the bank that offer financial support in monetary terms.
Another micro-environment aspect is the customer market that encompasses the consumer markets, government markets, reseller markets, business markets, and Globalization markets. This market is made up of individuals who buy goods and services for own consumption and subsequent use in their households. Reseller market purchases goods and resells to make profits. Business market buys goods for use in producing their own to sell. Government markets, on the other hand, are made up of government agents who buy goods to produce public service or transfer goods to those who need them. The international market encompasses buyers in other countries.
Competitors also form part of micro-environment ad it includes companies and organizations that offer similar goods and services. For a company to survive in a competitive market environment, a company must consider who their biggest competitors are considering its own size and position in the industry. The company should also develop strategic plans to have an advantage over her competitors.
The last aspect of micro-environment is the public. Publics refer to any group that has interest on the company's ability to meet her set goals and objectives. They include financial publics, media publics, government publics, citizen-action publics, the general public, and those employed by the company. All of them play a role in for the success or failure of the company.
This kind marketing environment is broader than the micro-environment for it includes all forces that are part of the larger society and includes concepts such as demography, economy, natural forces, culture, politics, and technology. The main purpose of this type of marketing environment is to understand the environment better and to adapt to the social environment and change through marketing to achieve the set targets, aims, and objectives of the enterprise marketing. The organization of macro-environment is affected factors popularly known as the PESTEL which is described as the; Political, Economic, Social, Technological, Environmental and Legal factors.
Demography which is an aspect of macro-environment is defined as the study of human population in terms of size, occupation, sex, density, age, gender, and location. It helps to divide the population into market segments and target groups. It covers many dimensions that are paramount to marketers that include family dynamics, geographic shifts, levels of diversity, and workforce changes. Demography helps a marketer to decide about whom their product would benefit most so as to tailor their marketing plan to reap maximum benefit in terms of profit returns.
The economic environment is also another aspect of macro that refers to the purchasing power of customers and ways I which individuals spend their cash. It encompasses the subsistence economies which are more aligned with agriculture and the industrialized economies aligned with markets that are diverse and carry many different types of goods.
Another aspect is a natural environment that includes the inputs that affect the marketing of a company. It includes increased pollution, shortage of raw materials, and increased government intervention.
The technological environment includes development from antibiotics, surgery, chemical weapons, credit cards, automobiles, and nuclear weapons. Another aspect which is political includes all laws, government agencies, and groups that influence or limit other organizations and individuals within a society that a marketer is supposed to be aware of to know how they would affect a business adventure.
The last aspect of macro is the social environment that consists of institutions and the basic values and beliefs of a group of people. As a marketer, one is supposed to know the effect of a communities core believes and their effect on businesses.
This is defined as markets in which participants can buy and sell their future contracts and provides a medium for the complementary activities of speculation and hedging for dampening wild fluctuations in the prices caused by shortages and gluts.
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