Market environment

The business environment is a marketing term and Refers to factors and strengths That has affected firm’s Ability to Build and Maintain successful customer relationships . The three levels of the environment are:

  1. Micro (external) environment – small forces within the company that affect its ability to serve its customers.
  2. Internal environment – can be controlled, however, it can not influence an external environment.
  3. Macro (external) environment – larger societal forces that affect the microenvironment. [1]


Company aspect of micro-environment refers to the internal environment of the company. This includes all Departmentalization departments such as management, finance, research and development, purchasing, business operations and accounting. Each of these departments influences marketing decisions. For example, research and development have been successful in the field of product performance and accounting. Marketing managers must be in a position to maintain a strong customer relationship.

Marketing intermediaries refers to resellers, physical distribution firms, marketing services agencies and financial intermediary financial intermediaries. These are the people who help the company promote, sell, and distribute their products to final buyers. Resellers are those who hold and sell the company’s product. They match the distribution to the customers and include places like Wal-Mart, Target, and Best Buy. Physical distribution firms are as such as the company’s warehouses and the company’s product from its origin to its destination. Marketing services, marketing, advertising, and consulting. Financial intermediaries are financial institutions and insurance companies.

Another aspect of micro-environment is the customer market. There are different types of customer markets, markets, government markets, Globalization international markets, and reseller markets. The consumer market is made up of individuals who buy goods and services for their own use. Business markets include those that buy goods and services for their own products. This is different from the reseller market which includes businesses that purchase goods and services. These are the same companies mentioned as market intermediaries. The government market consists of government agencies that buy goods to produce.

Competitors are also a factor in the micro-environment and include companies with similar offerings for goods and services. To remain competitive a company must consider their position and position in the industry. The company should develop a strategic advantage over their competitors.

The final aspect of the micro environment is public, which is any group that has an interest in or effect on the organization’s ability to meet its goals. For example, financial public can hinder a company’s ability to obtain funds from the level of credit a company has. Public media include newspapers and magazines that can publish articles of interest regarding the company and editorials that may influence customers’ opinions. Government can affect the company by passing legislation and laws that put restrictions on the company’s actions. Citizen-action publics include environmental groups and minority groups and can question the actions of a company and put them in the public spotlight. Local public are neighborhood and community organizations and will also question a company ‘ and the level of responsibility of their actions. The general public may affect the company in its attitude, whether positive or negative, may be caused by the customer’s general customer base. And finally those who are employed within the company and deal with the organization and the construction of the product company.


The macro-environment refers to all the strengths of the micro-environment. It includes concepts such as demography, economy, natural forces, technology, politics, and culture.

Factors affecting organization in Macro environment are known as PESTEL , that is: Political, Economical, Social, Technological, Environmental and Legal.

Demography refers to studying human populations in terms of size, density, location, age, gender, race, and occupation. [2] This is a very important factor to study for marketers and helps to divide the population into market segmentsand target markets . An example of demography is classifying groups of people according to the year they were born. These classifications can be referred to as baby boomers , who are born between 1946 and 1964, generation X , who are born between 1965 and 1976, and generation Y, who are born between 1977 and 1994. Each classification has different characteristics and causes they find important. They can decide who their product would be most attractive to their marketing plan to attract that segment. Demography covers many aspects that are important to marketers including family dynamics, geographic shifts, work force changes, and levels of diversity in any given area.

Another aspect of the macro-environment is the economic environment. This refers to the power of potential customers and the ways in which people spend their money. Within this area are two different economies, subsistence and industrialized. Subsistence economies are based on their own industrial output. Industrial economies have markets that are different and carry many different types of goods. Each is important to the marketer because of a different distribution of wealth .

The natural environment is another important factor of the macro-environment. This includes the natural resources that make up their marketing activities. The concern in this area is the increased pollution, shortages of raw materials and As raw materials become more important, the ability to create a product is much harder. Also, they are known for damaging the environment. The last concern, government intervention can make it much harder for a company to achieve their goals.

The environment is perhaps one of the fastest changing factors in the macro-environment. This includes all developments from antibiotics and surgery to nuclear missiles and chemical weapons to automobiles and credit cards . These markets develop new markets and new uses for products. It also requires a company to stay ahead of others and update their own technology. They must stay informed of trends so they can be part of the next big thing, rather than financially and financially.

The political environment includes all laws , government agencies , and groups that influence or limit other organizations and individuals within a society . It is important to be aware of these restrictions as they can be complex. Some products are regulated by both state and federal laws. There are even restrictions for some people, for example, cigarettes should not be marketed to younger children. There are also many restrictions on subliminal messages and monopolies. As laws and regulations change often, this is a very important aspect for a marketer to monitor.

The final aspect of the macro-environment is the cultural environment, which consists of institutions and basic values ​​and beliefs of a group of people. The values ​​can also be further categorized into core beliefs, which are more likely to change, and secondary beliefs, which tend to be easier to influence. As a marketer, it is important to know the difference between the two and to focus your audience on the market .

When dealing with the marketing environment it is important for a company to become proactive. By doing so, they can create the kind of environment that they will prosper and become more efficient. It is important to place equal emphasis on both the macro and the micro environment and to react accordingly. [3]

Environmental scanning

Environmental scanning is one of the essential components of the global environmental analysis . Environmental monitoring , environmental forecasting and environmental assessment complete the global environmental analysis. The Global Environment Refers to the macro environment qui included industries , markets , companies , customers and concurrents . Consequently, there is corresponding analyzes on the micro-level. Suppliers , customers and competitors representing the environment of a company analyzed by the company.[4]

Environmental scanning can be defined as’ the study and interpretation of the political , economic , social and technological events and trends qui influence business , an industry or Even a total market . [5] The factors which need to be considered for environmental scanning are events, trends, issues and expectations of the different interest groups. Issues are often forerunners of trend breaks. A trend break could be a value shift in society , a technological innovationthat might be permanent or a paradigm change. Issues are less-seated and can be a temporary short-lived reaction to a social phenomenon . [6] A trend can be defined as an ‘environmental phenomenon that has adopted a structural character’. [5] [ improper synthesis? ]

Environmental scanning is an ongoing process and organizations are always refining the way their company or business goes through the process. Environmental scanning reinforces productive strategic plans and policies that can be implemented in the environment. Environmental scanning not only helps the business find its strengths in its current environment but it also finds the weaknesses of competitors, identifies new markets, potential customers and . Environmental scanning helps a business improve their decision-making process in times of risk and the environment is in business. [7]


When scanning the environment, the organization needs to be at all the influences of the company. The scanning process makes the organization aware of what the business environment is about. It allows the organization to adapt and learn from that environment. [8] When the company responds to an environmental scanning process it allows them to respond and react to the internal and external business environment. Environmental scanning is a useful tool for strategic management as it helps to create and develop the objectives of the company and the organization.

When looking at the weaknesses of the organization’s place of business. A common formal environmental scanning process has five steps. The five steps are fundamental in the achievement of each step in:

  1. The first step of the environmental scanning process requires the identification of the needs and the environmental issues that are required. Before starting the process, there are several factors that will be considered that include the purpose of the scanning, which will be involved in the processes and the amount of time that will be allocated to the duration of the scanning process.
  2. The second step of the scanning process is gathering information. All the needs of the organization are in the process of being useful.
  3. The third steps analyzing the information that the business has collected. When analyzing the information organizations are made aware of the trends or issues that the organizations may be influenced by.
  4. The step of the environmental scanning process is all about the communication of the results obtained in step three. The appropriate decision makers analysis of the potential effects of the organization. All the information is presented in a simple and concise format
  5. With all the information obtained from steps three and four, all steps towards making informed decisions. Management creates appropriate steps that will position the organization in the current business environment. [7]

Information sources used

The information sources used to gain knowledge and understanding of the business environment can be broken into two categories. The external and internal information sources. The external sources are not all those in a published form and can include verbal sources such as ‘ word of mouth ‘. The external information sources includes:

  • Personal contacts
  • Newspapers / magazines
  • Books
  • Newspapers
  • Professional conferences / meetings
  • Radio , television and internet
  • Professional colleagues
  • Customers
  • Commercial databases .

The internal information is all information that is specific to the organization. This information can be compared to the following sources:

  • Personal contacts
  • Internal reports
  • Conference papers
  • Internal memoranda
  • Committees / meetings
  • Sales staff
  • Other managers
  • Other employees
  • Internal databases. [7]


Environmental scanning is not always effective or useful in an organizational setting for several reasons. The volume of the information received by the scanner may be disadvantageous when it attempts to make a mistake. Because of the volume of information and its hard to decipher what is important or not so management and key information can be missed. Another way vital information can be unordered and unorganized. Due to ever changing information environment runs all under a time limit of validity. Another barrier to environment scanning is the interpretation of information that has been collected. Undetermined sources can cause confusion and irrelevance to the process. [7]

Macro environment

There are a number of common approaches, which are mentioned in the definition of Kroon and which describe the environment, can be identified and examined. These factors affect the organization but can not be controlled by it. One approach could be the PEST analysis. PEST stands for political , economic , social and technological . Two more factors, the environmental and legal factor, are defined in the PESTEL analysis (or PESTLE analysis ).

The segmentation of the macro environment is one of the most important aspects of the PESTEL analysis.

PESTEL analysis

The six environmental factors of the PESTEL analysis are the following:

Political factors

The company / organization needs to consider the political environment when creating business strategies. The politics of politics and the politics of politics. May be an unexpected loss of ownership of government takeover (nationalization), or changes in labor laws which might increase the cost of the labor force . But often business can anticipate issues by performing a political risk analysis . The political instability can influence the business and the duration of time that business / organization is profitable . [9]

  • Taxation Policy
  • Trade regulations
  • Governmental stability
  • Unemployment Policy, etc.
  • political stability

Economical factors

The economic factors of the business environment are all the variables that impact how the consumer spends their money and the power of that purchase. There are multiple factors that exist at any time. An example of an economic factor is the recent recession. The economic development of a country Is an important element when scanning the economic environment. [10] Countries are often categorized as either ‘ developing ‘ or ‘ developed ‘. The exchange rate of a country can have an extensive impact on the profitabilityof a business. Relatively small changes in the exchange rate may be the difference between profit and loss. When promoting, selling a product, it is important for an organization to consider the extra financial information including current rates, taxes etc. in the economy of the country. [9]

  • Interest rate
  • Inflation rate
  • Growth in spending power
  • Rate of people in a pensionable age
  • Golden Boom Recession
  • Customer liquidations
  • Balances of Sharing


The socio-cultural environment looks at the demographic characteristics of the current business environment. It looks at the values, customs and norms of the environment of which a company or organization is placed. [10] When looking at the socio-cultural environment, it is important to consider the social values ​​of the environment. Organizations look at the cultural characteristics of the society and consider them as they are often associated with the culture while they try to market the product or service, [9] such as:

  • values , beliefs
  • language
  • religion
  • education
  • literacy
  • time orientation
  • lifestyle .

Technological factors

The environment is becoming more important in the modern day business environment. New technology produces new opportunities for companies and organizations to create, sell and promote a product. Technology is rapidly growing and forever changing. Telecommunication technology eg cellphones and laptops are increasing the opportunity within an organization to promote and sell a product. The internet has made information available to the consumer of a comparable product of a product or service of the product of the same product or service. The internet has also created more opportunities to market the product or service via the use of social media . [10]

  • Internet
  • Ecommerce
  • Social Media
  • Electronic Media
  • Research and Development
  • Rate of change .

Environmental factors

The environmental factors of the PESTLE analysis include natural resources that are affected by the processes of selling and marketing or services. The two main environmental trends are that of the environment and the environment and the environment. A business could for example utilize recyclable and biodegradable packaging, thus making the most of the environmental opportunities to create a sustainable organizational environment. [10]

  • Competitive advantage
  • Waste disposal
  • Energy consumption
  • Pollution monitoring, etc.

Legal factors

The legal environment includes the laws and regulations of a state. The laws and regulations will affect the way in qui year organization will market or sell the product and services . The legal factors influence trade agreements between different governments and states. The gouvernements That-have has well Developed public policy about selling and marketing goods May limit competition and place other obligations are retailers . [10]

  • Employment law
  • Health and safety
  • Product safety
  • Advertising regulations
  • Product labeling
  • Labor laws etc. [11]

SWOT analysis

SWOT or situation analysis is used when both internal and external environment. SWOT stands for Strength , Weakness , Opportunity and Threat . The internal factors are the strengths and weaknesses where the opportunities and threats are external factors that are used in the decision making process.

The strengths are positive characteristics in the internal business environment that can be capitalized on to increase the overall performance. The weaknesses are the factors that affect the positive performance of the organization. The internal environment factors will include finance , production , research , development and marketing. The opportunities include the fact that they act as stepping stones for the organization in order to achieve their current strategic goals. The threats include the factors that have an effect on the organization of achieving the goals. Often threats will come out of the external business environment. [12]


The meso-level is settled between the macro- and the micro-level. This field deals with the design of the specific environment of the enterprises. It is of decisive importance that the layout of the physical infrastructure ( transport , communication and power distribution systems) and of the sector policies, especially of education , research and technology policy , are oriented towards competitiveness . In addition, the design of the trade policy and systems of rules (for example: environmental norms and technical safety standards), which contributes to the development of national advantages of competition, is relevant. Like on the micro-level, on the meso-level new patterns of organization and steering must be developed. The state shall give impulses and mediate between enterprises, associations, science and intermediate institutions. “The design of locations as a continuous process on the basis of the efforts of enterprises, the science and the state of the art.


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