Micro and Macro Environment

A successful marketing campaign increases a company’s profits and helps it reach its strategic goals. However, there are challenges to marketing because the business environment is constantly changing. Customer preferences and attitudes keep evolving and require managers to adapt rapidly. Another challenge involves reaching different target markets with culturally relevant propositions.

Proactive attention to the environment allows marketers to prosper by efficiently marketing in areas with the greatest customer potential. Reactive attention to the environment, on the other hand, can lead to a disconnect with potential customers and can allow competitors to gain advantages that will win them a higher market share.

Two key levels of the marketing environment are the micro-environment (near environment) and the macro-environment (far environment):

The Micro Environment:
The micro-environment includes the company itself, its suppliers, marketing intermediaries, customer markets, and competitors. It also includes consumers, collaborators, and centers of influence. Let’s take a closer look at three of them:

• The company aspect of micro-environment refers to the internal environment of the company. Each internal department has an impact on marketing decisions. For example, research and development has input on the features a product can have, and accounting approves the financial side of marketing plans and budgets.
• The suppliers of a company are also a part of the micro-environment because even the slightest delay in receiving supplies can result in customer dissatisfaction. Examples of suppliers for such companies as automobile manufacturers would include providers of steel, aluminum, leather, and even audio system manufacturers.
• Competitors include companies with similar offerings for goods and services. To remain competitive, a company must consider who their biggest competitors are and simultaneously consider its own size and position in the industry. The company should aim to develop a strategic advantage over their competitors.

The Macro Environment:
The macro-environment includes concepts such as demography, economy, natural forces, technology, politics, and culture.

• Demography refers to studying human populations in terms of size, density, location, age, gender, race, and occupation. This helps to divide the population into market segments which can be beneficial to a marketer in deciding how to tailor their marketing plan to attract that demographic.
• The economic environment refers to the purchasing power of potential customers and the ways in which people spend their money.
• Technology includes all developments from antibiotics and surgery to nuclear missiles and chemical weapons to automobiles and credit cards. As these markets develop, it can create new markets and new uses for products. It also requires a company to stay ahead of others and update their own technology.
• The political environment includes all the laws, government agencies, and groups that influence or limit organizations and individuals within a society. It is important for marketers to be aware of these restrictions as they can be complex and can change often. For example, regulations on packaging, such as the necessary inclusion of ingredients for food products or the limitation on product capability claims, must be understood by marketers to avoid negative public perception or sanctions.
• The cultural environment consists of institutions and the basic values and beliefs of a group of people. The values can also be further categorized into core beliefs, which are passed on from generation to generation and are very difficult 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 marketing campaign to reflect the values of a target audience.