The Company's Microenvironment

The Company's Microenvironment
The Company's Microenvironment

Marketing management's job is to create attractive offers for target markets. However, marketing managers cannot simply focus on the target market's needs. Their success will also be affected by actors in the company's microenvironment. These actors include other company departments, suppliers, marketing intermediaries, customers, competitors, and various publics.

The Company

 In designing marketing plans, marketing management should take other company groups, such as top management, finance, research and development (R & D), purchasing, manufacturing, and accounting, into consideration. All these interrelated groups form the internal environment. 

Top management sets the company's mission, objectives, broad strategies, and policies. Marketing managers must make decisions consistent with the plans made by top management, and marketing plans must be approved by top management before they can be implemented. Marketing managers must also work closely with other company departments. Finance is concerned with finding and using funds to carry out the marketing plan. The R & D department focuses on the problems of designing safe and attractive products. Purchasing worries about getting supplies and materials, whereas manufacturing is responsible for producing the desired quality and quantity of products. Accounting has to measure revenues and costs to help marketers know how well it is achieving its objectives. Therefore, all of these departments impact the marketing department's plans and actions. Under the marketing concept, all of these functions must 'think customer' and they should work together to provide superior customer value and satisfaction.




Suppliers are an important link in the company's overall customer 'value delivery system". They provide the resources needed by the company to produce its goods and services. Supplier developments can seriously affect marketing. Marketing managers must watch supply availability - supply shortages or delays, labor strikes, and other events can cost sales in the short run and damage customers [Satisfaction in the long run. Marketing managers must also monitor the price trends of their key inputs. Rising supply costs may force price increases that can harm the company's sales volume.

Marketing Intermediaries

Marketing intermediaries are firms that help the company to promote, sell and distribute its goods to final buyers. They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. Resellers are distribution channel firms that help the company find customers or make sales to them). These include wholesalers and retailers which buy and resell the merchandise. Selecting and working with resellers is not easy. No longer do manufacturers have many small, independent resellers from which to choose. They now face large and growing reseller organizations. These organizations frequently have enough power to dictate terms or even shut the manufacturer out of large markets.

Physical distribution firms help the company to stock and move goods from their points of origin to their destinations. Working with warehouse and transportation firms, a company must determine the best ways to store and ship goods, balancing such factors as cost, delivery, speed, and safety. Marketing services agencies are the marketing research firms, advertising agencies, media firms, and marketing consultancies that help the company target and promote its products to the right markets. When the company decides to use one of these agencies, it must choose carefully because the firms vary in creativity, quality, service, and price. The company has to review the performance of these firms regularly and consider replacing those that no longer perform well. Financial intermediaries 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. Most firms and customers depend on financial intermediaries to finance their transactions. The company's marketing performance can be seriously affected by rising credit costs and limited credit. For example, small and medium-sized businesses in the United Kingdom have often found difficulty in obtaining finance for market and product development activities. Many such businesses blame this on the unsupportive financial system in the UK. In marked contrast, the Japanese keiretsu system favors lower-cost financing for both large and small companies that form part of the informal network of banking, trading, and commercial organizations within the Itieretsu, Whether or not businesses enjoy the support of a favorable financial system, individual businesses must be aware of financial organizations' impact on marketing effectiveness. For this reason, the company has to develop strong relationships with the most important financial institutions. Like suppliers, marketing intermediaries form an important component of the company's overall value delivery system. In its quest to create satisfying customer relationships, the company must do more than just optimize its own performance. It must partner effectively with suppliers and marketing intermediaries to optimize the performance of the entire system

SWOT Analysis



The company must study its customer markets closely. Consumer markets consist of individuals and households that buy goods and services for personal consumption. Business markets buy goods and services for further processing or for use in their production process, whereas reseller markets buy goods and services to resell at a profit. Institutional markets are made up of schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care. 

Government markets are made up of government agencies that buy goods and services in order to produce public services or transfer the goods and services to others who need them. Finally, international markets consist of buyers in other countries, including consumers, producers, resellers, and governments. Each market type has special characteristics Chat calls for careful study by the seller. At any point in time, the firm may deal with one or more customer markets: for example, Unilever has to communicate detergent brand benefits to consumers as well as maintain a dialogue with retailers that stock and resell its branded products.



The marketing concept states that to be successful, a company must provide greater customer value and satisfaction than its competitors do. Thus, marketers must do more than simply adapt to the needs of target consumers. They must also gain a strategic advantage by positioning their offerings strongly against competitors' offerings in the minds of consumers. No single competitive marketing strategy is best for all companies. Each firm should consider its own size and industry position compared to those of its competitors. Large firms with dominant positions in an industry can use certain strategies that smaller firms cannot afford. But being large is not enough. There are winning strategies for large firms, but there are also losing ones. And small firms can develop strategies that give them better rates of return than large firms enjoy.




The company's marketing environment also includes various publics. A public is any group that has an actual or potential interest in or impact on an organization's ability to achieve its objectives. seven types of public 

1. Financial public

The financial public influences the company's ability to obtain funds. Banks, investment houses, and stockholders are the principal financial public.

2. Media publics. 

Media publics are those that carry news, features, and editorial opinions. They include newspapers, magazines, radio and television stations,

3. Government publics

Management must take government developments into account. Marketers must often consult the company's lawyers on issues of product safety, truth-in-advertising, and other matters.

4. Citizen action public

A company's marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and other pressure groups. Its public relations department can help it stay in touch with consumer and citizen groups.

5. Local public

Every company has local public, such as neighborhood residents and community organizations. Large companies usually appoint a community relations officer to deal with the community, attend meetings, answer questions and contribute to worthwhile causes.

6. General public

A company needs to be concerned about the general public's attitude toward its products and activities. The public's image of the company affects its buying. Thus, many large corporations invest huge sums of money to promote and build a healthy corporate image.

7. Internal public

A company's internal public includes its workers, managers, volunteers, and the board of directors. Large companies use newsletters and other means to inform and motivate their internal public. When employees feel good about their company, this positive attitude spills over to their external public.


A company can prepare marketing plans for the public as well as for its customer markets. Suppose the company wants; a specific response from a particular public, such as goodwill, favorable word of mouth, or donations of time or money. The company would have to design an offer to this public that is attractive enough to produce the desired response. Organizations today are under the watchful eyes of their various publics. As we saw in the case of Unilever's soap war with P & G, the company must explain its actions to a wider audience when things go wrong. Those that overlook the power of serious interest groups often learn painful lessons. We have looked at the firm's immediate or microenvironment. Next, we examine the larger macro environment.

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Strategic Planning

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