How many factors make up the marketing environment?

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I am confident that you are familiar with the concept of business environments. Remember the internal and external factors that affect businesses? The marketing environment is a similar but a slightly different topic. The marketing environment discusses the various factors affecting marketing and why it is essential for businesses. Read along to learn more about this topic and see the similarities and differences it has with the idea of business environments.

Marketing Environment Definition

A business as an entity cannot function on its own. It is affected by its surroundings - both internal and external. The internal and external surroundings of a market constitute its environment. These surroundings affect how businesses function and are therefore known as a business's internal and external factors.

The internal and external factors of a business that affect the workings of its marketing activities are known as its marketing environment.

These factors affect the different realms of business. The marketing environment drives all the major marketing decisions of a business and is different for each organization.

Internal Factors of Marketing Environment

The internal factors, also known as the microenvironment, are the factors that directly affect the business. The marketing department of a company is tasked with maintaining customer relationships and customer satisfaction. The microenvironment plays a significant role in deciding the functions of the marketing department that will affect the business's operations in maintaining customer relations. The internal factors or components of the microenvironment are as follows:

Marketing Environment: Financial Resources

The financial resources the company has will directly affect its marketing activity. The budget will affect the techniques and methods used in marketing. A company with a high budget can try various methods to achieve its goals. A low budget will hinder the company from using the latest technology or trying new techniques.

Marketing Environment:Company Departments

The marketing department has to work together with all the company departments. They have to work towards the goals and objectives set by the top management. The company structure will affect how the marketing team functions and makes decisions.

Marketing Environment:Suppliers

Maintaining good relationships with suppliers is vital for marketing. This is because supply availability and costs affect the businesses' marketing. Marketers and suppliers work together to create and deliver customer values.

Marketing Environment:Marketing Intermediaries

Marketing intermediaries, like suppliers, play a crucial role in adding to the value of a product. As they have direct contact with the buyers, they also play a significant role in promoting the products.

Marketing Environment:Public

Anyone with a legitimate interest and impact on the company is known as the public. We can divide the public into seven types based on their effect on the business, and they are:

1. Citizen-action public - They include consumer organizations or other groups, such as environmentalists, that may question the company's marketing decisions.

2. Financial public - Entities or people such as banks, investors, and others related to the financial sphere can influence a business's funding.

3. General public - The public's opinion about the business will affect the company's product or service demand.

4. Government public - The government and its changing laws must be recognized by the business not to invite any trouble later.

5. Internal public - People from within the business that are happy to be working for the company will spread the good word about the company to the ones outside the business.

6. Local public - Local community residents or organizations are known as the local public. Working and cooperating with them helps with the business's reputation.

7. Media public - Newspapers, magazines, blogs, and other such content are known as the media public. The report in the media about a business can impact people's impression of the company.

Marketing Environment: Customers

Customers are an essential factor in the marketing environment. The main aim of marketing is to make a product appealing to the customer and maintain a long-lasting relationship with them. There are five different types of target customer markets for a business. They are listed below:

1. Business markets - They buy products to be processed to manufacture another item.

2. Consumer markets - Individuals or households consuming products or services for personal use.

3. Government markets - Government agencies or organizations that purchase goods or services to transfer them to those in need or for public services.

4. Reseller markets - Purchases goods and resells them for a higher price to make a profit.

5. International markets - All the types of customers mentioned above in another country.

Check out our explanation of Business Markets to learn more about market types.

External Factors of Marketing Environment

The external factors that affect the marketing environment indirectly are known as the macroenvironment. While we can predict some of these factors, others are unforeseeable. Foreseeing specific market changes that affect the marketing environment is essential to staying relevant and successful. The external factors of the marketing environment are as follows:

External Factors of Marketing Environment: Demographic

With the world population rising at an explosive rate, people are the most significant factor in the marketing environment. The population varies in terms of density, education, income, location, age, race, and other factors. These factors affect the population's demand. The population's demand will affect marketing decisions. A region with varying demand can pose both an opportunity and a threat to the business.

External Factors of Marketing Environment: Technological

The constant upgrade in the technological market affects the market environment. Marketers have to make sure they are aware of the new possible technologies they can use to promote their products. If they fail to do so, other businesses will beat them in the market.

External Factors of Marketing Environment: Political and Social Market

A country's political and social factors influence how a business and its marketing environment operate. All marketing activities must comply with the country's political and social regulations. These regulations help firms compete and protect consumers from unfair business activities.

External Factors of Marketing Environment: Economic

The market's economic conditions affect the marketing environment as it affects the population's purchasing power and spending patterns. This will impact consumer demand and where they shop based on their budget. Based on the company and its level of luxury product offering, it will have to adjust its marketing activities according to the economic situation.

External Factors of Marketing Environment: Natural

With the ongoing climatic changes and talk about becoming more 'green,' businesses have had to direct their marketing activities to prove to the market that they are ecologically responsible. This means companies must adapt their business practices to be more eco-friendly, which can be a significant attraction factor for customers. Therefore, such methods might increase sales and revenue for the business.

External Factors of Marketing Environment: Cultural

The cultural effects on a business's marketing environment depend on the people's notions, values, and perceptions. Companies must formulate marketing activities in a way that does not negatively affect people's cultural sentiments. If the business is not careful about certain marketing aspects or business operations, there is a chance that they offend people's cultural beliefs.

Features of Marketing Environment

The marketing environment consists of two main types of factors - internal and external factors. The dynamics or features of the marketing environment describe how the marketing environment affects the business.

Direct or Indirect Effects - The marketing environment consists of components that affect the business's marketing environment, both directly and indirectly. The internal factors affect the marketing environment directly, whereas the external factors affect the marketing environment indirectly.

Dynamic - The marketing environment is dynamic. The factors are unstable and constantly changing. This means that the business will have to adapt to the changes. Thinking ahead of the possible changes that could occur in the marketing environment and acting fast can give the company the upper hand in the market.

Complex - The marketing environment consists of internal and external features that make it very complex, often resulting in difficult marketing decisions.

Affects Demand - The marketing environment of a business affects its demand. Based on external factors such as a market's social and economic factors, the demand for certain items can be high or low. Therefore, understanding these factors will help the business make decisions on its production.

Characteristics of Marketing Environment

The marketing environment has five main characteristics that help us understand it. The characteristics are listed below:

Customer Orientation - Businesses exist to satisfy customers' needs and add value to their lives. Therefore, marketers will direct all marketing activities toward this goal. Considering the effect marketing decisions will have on the consumer is crucial.

Customer Satisfaction - In addition to fulfilling customers' wants and needs, it is essential to ensure that the business also satisfies the customer. Only a satisfied customer will purchase from the same company. Therefore, marketing activities play a crucial role in building loyal customers.

Market Research - Conducting market research is a vital characteristic of the marketing environment. Market research helps in keeping the company updated about customer demands. Without market research, businesses cannot get insight into consumer behavior trends and customers' changing needs.

Market Planning - Businesses focus on gaining profit by satisfying customers. All business objectives, including marketing objectives, are planned, keeping this goal in mind. Having market planning integrated into the marketing environment helps set the right marketing objectives.

Integrated Marketing - Integrated marketing helps in coordinating the goals and objectives set across the departments. The business formulates a marketing mix that is appropriate for achieving its goals. Reaching a business's overall goals would not be possible without coordinating actions among departments.

The marketing environment is essential for keeping the business relevant and successful. It is important to understand the business from within and from the perspective of the world outside it.

Marketing Environment - Key takeaways

• The internal and external factors of business that affect the workings of a business's marketing activities are known as its marketing environment.
• The internal factors, also known as the microenvironment, are the factors that directly affect the business.
• Financial resources, company departments, suppliers, marketing intermediaries, and the public are internal marketing environment factors.
• The external factors affecting the marketing environment are known as the macroenvironment.
• Demographical, technological, political, social, economic, natural, and cultural factors are the external marketing environment factors.
• Features of the marketing environment include: direct and indirect effects, dynamic, complex, and affects demand.
• Characteristics of the marketing environment include customer orientation, customer satisfaction, market research, market planning, and integrated marketing.

Frequently Asked Questions about Marketing Environment

The internal and external factors of a business that affect the workings of a business's marketing activities are known as its marketing environment. These factors affect the different realms of business. The marketing environment drives all the major marketing decisions of a business and is different for individual businesses.

The four main features of the marketing environment include its direct or indirect effects, its dynamic and complex nature, and the effect it has on consumer demands.

The types of marketing environments include internal and external marketing environments. The internal environment is called the microenvironment, and the external environment is called the macroenvironment. 

The marketing environment helps businesses in making accurate and informed marketing decisions. It helps them understand their customers, their buying patterns, their wants and needs, the societal norms, and all the different aspects of the market. This helps in formulating an effective marketing strategy.

The five main characteristics of the marketing environment include customer orientation, customer satisfaction, market research, market planning, and integrated marketing.

Final Marketing Environment Quiz

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What is marketing technology?

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Marketingtechnology is the software and hardware tools that let marketers develop strategies and advertising products (paper ads, radio ads, television ads, Internet ads, etc.) to desired potential consumers.

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Marketing technology includes______ tools that let marketers develop strategies and advertising products (paper ads, radio ads, television ads, Internet ads, etc.) to desired potential consumers.

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Software and hardware tools

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Printing press used to be a type of marketing technology.

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In the ____ century, marketing technology evolved rapidly to take advantage of each new communication technology. 

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What are the benefits of Marketing technology (MarTech)?

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MarTech enhances how companies connect with their potential consumers. Improving these business-to-business and business-to-consumer interactions will have a beneficial snowball effect on the company's customer relationships in the future.

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What are the 5 main types of marketing technology?

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There are five main types of marketing technology:  

• Advertising
• Analytics
• Content management
• Customer relation management (CRM) 
• Social media. 

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_________ is the software and hardware used to deliver the completed advertisement to consumers effectively.

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Content management technology

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___________technology involves Internet and phone tools used for handling customer questions, complaints, and suggestions.

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Customer relation management (CRM) 

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What happens when a company lacks a user-friendly  CRM?

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Lacking a user-friendly CRM system can quickly cause customers to switch to purchasing from a rival firm with better customer service. CRM may include social media pages, with options for customers to send comments and messages on Facebook, Instagram, and other social media sites.  

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What are some common marketing technology tools?

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The different standard tools of MarTech include email, social media, CRM, analytics, and team collaboration software. 

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Explain how email is used as a marketing technology tool.

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Email tools allow advertisers to send mass emails to current and potential customers, complete with links that would enable customers to click and go straight to shopping quickly. These emails can be scheduled to send automatically at certain times or under certain situations. 

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Social media tools allow firms to create and schedule posts that will appear on multiple platforms, saving lots of time. These can be paired with analytic tools to send different types of posts based on recent revenue or sales. 

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What are some marketing technology categories?

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Content Marketing Management, Data Tools (Analytics), Social Media Management, Event Management, Competitive Intelligence, and Predictive Marketing. 

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___________ involves all the tools needed to create and deliver marketing content, such as Internet ads. 

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Content Marketing Management

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________ includes technologies to monitor social media and Internet use and can be independent of advertising.

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________ involves physically engaging with current and prospective customers at events, such as store openings, conventions, sporting events, etc. 

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What is predictive marketing?

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Predictive marketing involves predicting future trends and marketing responses based on customer profiles.

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________ marketing answers questions such as "

Will a company's critical demographic continue buying products, or are they starting to prefer a substitute? Are economic indicators likely to scare customers away from buying, indicating that a company may need to lower the price or run a new marketing campaign?"

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________ involves analyzing the marketing and sales of rival firms. 

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What is social marketing?

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Social marketing is the design, execution, and monitoring of programs to impact social concept acceptance.

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The subfield of marketing, defined as "social marketing", operates to raise awareness of social issues or issues of popular interest. 

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What is the difference between social marketing and commercial marketing?

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In contrast to commercial marketing, social marketing is centered on finding solutions to issues that occur in the real world. It intends to do so via inducing awareness, altering behavior, and contributing to improving the environment in which people live. 

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What are some examples of social marketing?

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Social marketing examples include public health and safety, education, environmentalism, city beautification, and urban renewal initiatives. 

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A slogan saying “only you can prevent forest fires” is an example of _______.

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Which of the following is not an example of social marketing

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What's a popular slogan that helped reduce the number of people that drink and drive?

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“Friends don’t let friends drive drunk” became popular in the early 1980s and helped reduce the incidence of drinking and driving. 

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_________ campaigns promote healthy behaviors using catchy slogans and the inclusion of all sectors of the public.

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What is the main concept behind social marketing?

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The concept behind social marketing is changing behaviors through consistent positive reinforcement. 

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Recipients of social marketing campaigns are criticized for doing something terrible rather than be encouraged to do something good 

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When it comes to slogans, complexity quickly leads to people tuning out the message.

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Why simple phrases like “only you can prevent forest fires" are effective?

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Because they are easily understood, help the reader or viewer feel empowered, and can be easily accomplished.

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What is the social marketing approach?

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The social marketing approach focuses on concrete, simple individual behaviours and changing social norms.

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What are some of the means of communications used in social marketing?

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Television commercials, radio ads, Internet ads, and posters.  

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Why is social marketing important?

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Social marketing is essential because it encourages positive behavioral changes more successfully than mandates. By engaging with the public in a gentle and non-confrontational manner, there is less risk of backlash and firm resistance. 

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Define marketing environment.

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The internal and external factors of a business that affect the workings of its marketing activities are known as its marketing environment. 

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Internal marketing environmental factors are also known as

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The microenvironment affects the marketing environment

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Choose the internal factors of the marketing environment.

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The public can be divided into 7 different groups. What are they?

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1. Citizen-action public
2.  Financial public
3.  General public
4. Government public
5.  Internal public
6. Local public 
7. Media public 

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Who encompasses the "internal public"?

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People from within the company.

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Consumer organizations or other groups such as environmentalists are a part of

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 Local community residents or organizations are known as the _______.

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The types of customers can be divided into:

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Name the types of customers.

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1. Business markets 
2. Consumer markets
3. Government markets
4. Reseller markets 
5. International markets

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____________ buy products that will then be processed to manufacture another item.  

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Individuals or households consuming products or services for personal use are known as ___________.

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The external factors that affect the marketing environment ________  are known as the ___________. 

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indirectly, macro environment

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Choose the external factors of marketing environment:

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Choose the features of the marketing environment.

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Direct or indirect effects

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Name the characteristics of the marketing environment.

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Customer orientation, customer satisfaction, market research, market planning, and integrated marketing.

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