The microenvironment
This comprises those elements of the environment which
impinge on the firm and usually its industry, but which does
not affect all firms in all industries.
Definition
The actors close to the company that affect its
ability to serve its customers
Those elements which are closest to the company
and which exert the greatest and most direct
influence on its ability to deal with its markets
Elements of the Microenvironment
Composed of the following elements:
The organization itself
The competition
Customers
Distribution network
Suppliers
Publics
The company
In designing marketing plans, groups such as top management,
finance, research and development, procurement, operations,
marketing and finance are taken into account.
All these interrelated groups form the internal environment
Top managers set the company’s mission, objectives, broad
strategies and policies
Other functional managers make decisions within the strategies and
plans made by top managers
Suppliers
They form an important link in the company’s overall
customer value delivery net-work.
They provide the resources needed by the company to
produce goods and services
Supplier problems can seriously affect marketing
Most marketers today treat their suppliers as partners in
creating and delivering customer value
Competitors
According to the marketing concept, a company must provide
greater customer value and satisfaction than its competitors, in order
to be successful
Marketers must also gain strategic advantage by positioning their
offerings strongly against competitors offering in the minds of
consumers.
No single competitive strategy is best for all companies.
Each firm should consider its own size and industry position
compared to those of its competitors
Marketing Intermediaries
These help the company promote, sell and distribute its
product to final buyers.
They include:
Resellers
Physical distribution firms
Marketing services agencies
Financial intermediaries
Resellers
These are distribution channel firms that help the company
find customers and make sales to them
They include wholesalers and retailers who buy and resell
merchandise
There are large and growing reseller organisations, such as
Walmart, Home Depot, Best Buy, Shoprite, Melcom etc.
Some have enough power to dictate terms or even shut
smaller manufacturers out of large markets.
Physical distribution firms
These help the company stock and move
goods from their point of origin to their
destination
Marketing services agencies
These include:
marketing research firms.
Advertising agencies
Media firms
Media consulting firms, that help the company target and
promote its products to the right markets.
Financial intermediaries
These include banks, credit companies, insurance
companies and other businesses that help finance
transactions or insure against the risks associated
with the buying and selling of goods
Like suppliers, marketing intermediaries form an
important component of the company’s overall
value delivery network
Publics
The company’s marketing environment also include
various publics
This is any group that has an actual or potential interest in
or impact on an organization’s ability to achieve its
objectives
These include: financial publics, media publics,
government publics, citizen-action publics, local publics,
general public, internal publics
Financial Publics
This group influences the company’s ability to
obtain funds.
Major financial publics are: Banks investment
analysts and stockholders
Media publics
This group carry news, features and editorial
opinion.
Examples include: newspapers, magazines,
televisions, blogs and other internet media
Government Publics
Management must take government developments into
account in their day to day activities.
Marketers must comply with rules and regulation set out
by the government and other government agencies on
advertising, product safety, competition etc.
Local Publics
This includes neighborhood residents and
community organisations, minority groups,
environmental groups and others.
They can influence a company’s activities
Citizen-action Publics
Consumer groups, minority groups and
environmental organisations may question a
company’s marketing decision, thereby,
influencing it
General Public
The public’s image of a company can
affect it patronage
The attitude of the general public
towards a firm’s product and activities is
crucial
Internal Publics
This includes: Board of Directors, Managers,
Workers, Volunteers etc.
When internal publics feel good about a firm
they work for, this positive feeling spills over
to the external publics.
Customers
Customers are the most important actors in a
company’s microenvironment
The entire value network is aimed at serving
target customers and create strong
relationship with them
Types of customer markets
Individual and households
Business markets
Reseller markets
Government markets
International markets
Individuals and Households
These buy goods and services for
personal consumption
Business Markets
These patronize goods for further
processing or use in their production
process
Reseller Markets
These buy goods and services to resell at
a profit
Government Markets
Consists of government agencies that buy
goods and services to produce public services
or transfer the goods and services to others
who need them
International Markets
These consist of buyers in other countries ,
including consumers, producers or
manufacturers, resellers and governments or
government agencies.
Each type has unique characteristics which
call for appropriate study by the seller.
