International Journal of in Management and 2019; 1(1): 05-09

E-ISSN: 2663-3337 P-ISSN: 2663-3329 IJRMMS 2019; 1(1): 05-09 Marketing environment and environmental scanning Received: 05-11-2018 Accepted: 09-12-2018 Maruti Sawadkar Maruti Sawadkar Purbanchal University, School of Management (PUSOM), Abstract Teenpaini, Biratnagar, Nepal, For any organization to be successful, it is necessary for the to adapt the changes prevailing in India the marketing environment. Therefore, it is necessary for the business to scan the environment properly and deal with the possible threats of the and avail the best opportunities prevailing in the market. Here, we will discuss about the factors affecting the environment i.e. internal and external and environmental scanning. Here we will explore the association between different elements of the marketing environment and how to respond with the existing and changing factors.

Keywords: Marketing environment, environmental scanning

Introduction Having a proper knowledge about the requirements of the customers is necessary for any organization. For this, company needs to monitor their marketing environment regularly. The marketing environment is changing rapidly as there are many factors which influence the market.

Marketing Environment refers to the internal and external forces which affect the marketing decisions and the ability of the organization to maintain a successful relationship with its customers. Factors which influence the market from inside and outside the business are marketing environment. These factors collectively influence the marketing decisions. It also refers to those external forces which affect the ability of an organization to develop and

maintain the successful relationship with its consumers. It consists of all the forces which directly or indirectly affect the activities of marketing like , regulation, economic conditions, etc. The Programme of marketing of an organization is affected by the firm’s need to plan its business by considering the needs of its consumers, rather than giving preference to production of products. The firm needs to be in touch with the

marketing environment, about what is going in the market and how the environment is changing and how these changes will affect the demand for the product. Organization also needs to access the opportunities and threats present in the market’s surroundings. Environment is something which surrounds the system. Marketing is considered as a system which influences the environmental change. Environment consists of the factors, which are

external and beyond the control of the business and its management. These are called as givers within which a firm and its management have to operate in a specific country or in case of international marketing, country to country. The Organization of marketing operates within a complex and changing environment. It is the task of organizations which are marketing oriented to link the organization with its

consumers. It is done by establishing a framework for opportunities and threats for the external environment. The internal environment is limited to the company which involves owners, workforce, machinery, policies, materials etc. and the External Environment is further divided into Micro and Macro Environment. Micro Environment is specified to external business like production, promotion etc. Macro environment is the broadest one. It

contains large societal factors influence the organization. It includes , competitors, technology etc. These are highly uncontrollable. Just like if the human body does not adjust with the environmental changes, it may face problems and many diseases, Correspondence similarly, and an organization may also fail if it does not adapt the changes and make the Maruti Sawadkar business policy accordingly. Purbanchal University, School of Management (PUSOM), In the business, all the activities are done to satisfy the needs of the consumers. It is an Teenpaini, Biratnagar, Nepal, activity which is carried by people for the people means people are the center attraction of India the whole activity.

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It states that business is the people and human is a dynamic marketing like selling, research, promotion etc. are entity who that change exists and it is the only involved with problems and opportunities outside the thing which is certain in today’s time. It is the huge business. Marketers need to focus themselves to outside challenge for the businessman and managers to become environment, to earn for the organization. aware of the changes and keep themselves update with the changes and to ensure the survival and sustainability of the Environmental scanning is a constant yet very important business in the market. Therefore, it can be said that study part of marketing for the companies to be successful. It of marketing environment is the most necessary factor for involves collection, filtration and analysis of the the survival and success of the business. For Organization related to the environment of marketing and making should not only monitor the need for changing market, but strategies on its basis. It also involves monitoring of the also needs to monitor the change in marketing environment changes which are taking part in the environment and to be successful. By understanding the environment, affecting the business. Such analysis will help in availing marketers can easily adapt their strategies in meeting new the opportunities and eliminating the threats. It is the duty of challenges and opportunities. Successful organizations marketing department to identify such changes and the know the importance of monitoring and adapting the policies regarding such changes should be implemented in changes in the environment. the organization.

Scanning of Marketing Environment: The environment of Components of Marketing Environment: Marketing Marketing is dynamic and it keeps on changing. Marketers environment is made up of factors and forces outside and need to engage themselves in environmental scanning to inside the organization which are affecting the ability of an avail the opportunities and decrease the threats of organization to develop and maintain the successful environment. Environmental scanning is the collection of relationship with its customers. Marketing environment information regarding the factors affecting marketing consists of various factors which affects the ability of the environment. It includes primary and secondary sources of business to maintain the relationship with its customers. data including magazines, , online blogs etc. It is Every business consists of a set of internal and external the process of analyzing the information. It may be carried factors which affects the business. The internal environment out by researchers or marketing managers. This collected of the marketing can be controlled while there is no or very information is assessed to interpret the results. With the help less control over the external environment. A business needs of analysis, marketers become able to identify the to look outside the organization to avail the opportunities environment and determine the future trends. By these and minimize the threats. The 2 components of marketing marketing efforts, future marketing strategies could be environment are: Internal environment and External developed and the managers would be able to determine the environment. External environment is further categorized prevailing threats and opportunities associated with into Micro and Macro Environment. fluctuations in the environment. All the operations of 1. Internal Environment: Internal Environment of the marketing are done in highly complex and dynamic business includes all such forces which are prevailing environment which keeps on changing rapidly. According to inside the organization and may affect the business. most of the philosopher of marketing, “Marketing There are a number of factors which influence the environment consists of all the factors which affect the change in internal environment and the change in marketing management from outside the organization and strategies. There is full control of management on the ability of business to maintain successful relationships with factors affecting internal environment. It includes Five its customers. It can be done by: M’s of the business which are: . Identifying Opportunities and Threats: Environment . Men: It means Human Resource of the Organization. It of marketing provides both the opportunities and the includes planning and development of human resources threats. The companies which are successful know for the success of the organization. It states that the about the importance of change and they know very people working in the business are important and well how to adapt the change.it is the responsibility of valuable resource of the organization and they require the marketers to identify the significant changes from attention and proper training. The strength and the environment. weakness of the organization is determined by the . Following Disciplines: Marketers should be the trend skills, commitment and abilities of its employees. and opportunity seekers other than any other group of Employees at different level of the organization help in the company. If all the management of the organization taking decisions and implementing them. wants to observe the outside environment, they need to . Money: Internal factors affecting the organization also follow the discipline for collecting the information include finance because the performance of business is regarding marketing environment. also affected by factors related to money like capital . Interaction with Environment: It is also necessary for etc. Different strategies and decisions are made on the the marketers to spend time with customers and in the basis of financial factors which may include how much competitive environment and it can be done by doing capital is available and how much is required. The proper environmental scanning, so that marketers will success of the business depends on the management of be able to formulate marketing strategies to meet the available funds in the organization successful. challenges and opportunities present in the Moreover, money is the most important element environment. because every business is established to earn some . Meeting the needs of Consumers: Marketing is all profit. about, matching the offerings of organization to the . Material: Material may also be called as physical asset needs of the market i.e. consumers. Functions of of the business. To increase the of the

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business, efficient supply of material and its optimum basis. Their decisions can be changed by providing production is very important. It depends on the physical them delightful products and services. The main motive assets of the company. It should always be considered of any business is to create customers, because they are while making strategies because it plays an important the backbone of survival of any business. role in asserting the performance of an organization. . Competitors: Marketing says that a business should . Management: Today are not carried out by provide satisfaction to its consumers more than its a single entrepreneur or by the partners, it is carried out competitors. They need to gain by the whole team who works for the organization by making their offerings strongly than its competitors. including board of directors who run and control the A firm should perform its competitive analysis for business in almost every decision. Therefore, scanning direct competitors. This analysis not only composition of management should also affect the ensures the competitive position in market, but also business environment internally. helpful for identifying the major rival of the company. . Market: Company’s image in the market is also an Thus, such analysis is important for strengthening the important factor. The image of company also affects in abilities of an organization. taking decisions like entering into joint ventures, . Marketing Intermediaries: Most of the organizations contracts etc. with other business or while establishing are relying on the intermediaries of the marketing to a new product or service in the market. Therefore, it is make their products available to the final consumer. necessary to build the positive image of the company in They help the business in promoting, selling, and the market. distributing the products to the buyers. While some organizations supply their products directly to the These are some of the factors which affect the Internal consumers, some organizations use intermediaries like Environment of any business. These are controllable wholesaler, retailers, distributors etc. Marketers need to because they are happening inside the organization and know the importance of the intermediaries. A firm need organization has full control over such factors and it can to ensure that its link with the intermediaries is modify these factors as per the need of the organization. The appropriate because a wrong choice may affect the internal environment is under full control of organization organization. and can be changed whenever the external environment is . Public: Micro environment of business include various changed. It includes all the departments of the organization kind of public. Public are the people who have a direct like: Human Resource Department, Marketing Department, impact on the organization. Public includes- Financial Sales department etc. public, Media public, Government public, Citizen- 2. External Environment: External environment I made action public, Local public, General public, Internal up of those forces which are outside the business and public. Organizations are directly affected by the marketer has little or no control on them. Companies different acts of the public. Media is the also the most operating in external environment identify the threats important factor affecting the organization, because if and the opportunities. These forces are uncontrollable. they turn hostile, they may ruin the image of the For coping up with this environment, SWOT analysis is business. So the business needs to closely consider very necessary for making policies. It consists of Micro media too to avoid such hindrances. and Macro Environment. (B) Macro Environment: Macro Environment of the (A) Micro Environment: Micro Environment is also known marketing is also called as broad environment. It as task environment. The forces existing in the involves the factors which affect the business immediate environment of the business are micro completely but not directly. It affects not only the forces. Suppliers, customers, market intermediaries, business, but also the competitors. Organizations competitors are the part of micro environment. It is not need to pay more attention towards these factors always necessary that all the micro factors affect the because they provide opportunities as well as firm. Factors affecting Micro Environment are: possess threats. It includes demography, . Suppliers: Suppliers are those business organizations technology, economy etc. These factors are highly which provide raw materials, components, services or uncontrollable. supplies which are required for production. Suppliers . Demography: It is the study of characteristics of are the link between organizations and their overall population which includes: size, density, sex, age, race, customer system of delivery. It can affect the location, occupation etc. It tells marketers about the business. The suppliers can change their positions. The current and potential consumers of the business, about equation between suppliers and business is based on their needs and wants. Marketers need to study the conditions of to extent of their dependency on demography mix because it affects their choice of each other. If any uncertainty prevails in the supply of buying and their budget of buying and their buying raw material to the organization, which may lead to behavior. Marketer needs to know the composition of high cost of production. Therefore, dependency on demography to decide their marketing mix. single supplier may be risky. So to be safe, it is . Economy: Economic environment includes factors necessary to have relations with multiple suppliers. which are affecting the purchasing power and spending . Customers: Customers are the most important element patterns of consumers and the demand in economy. It is of micro environment of the business. No customers one of the important components of marketing mean no marketing and no business. An organization environment. If decides the success and survival of the must be aware of the constantly changing needs of the business. The economic policy introduced by the consumers and formulating essential policies on its government creates a heavy impact on the business.

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Economic factors include , deflation, demand, . Formulating New Trends: Formulation of new trends supply, boom, , income distribution, saving according to the change prevailing in the market can be habits, interest rates etc. done by doing marketing environment scanning. A . Technology: It is the most powerful force affecting the marketer needs to do a complete and thorough research business. New technological discoveries cause threats to formulate new plans for the business. as well as opportunities in the market. Technological . Identifying Threats and Opportunities: When the advancement is very necessary for the success and marketer will do environmental scanning, he/she needs survival of business. It bought change in our day to day to have the complete knowledge about the changes lives too, in almost all the fields including medicine, occurring in the environment so that he can identify the entertainment etc. The is threats and opportunities and take necessary steps to increasing rapidly in the market and marketers needs to eliminate the threats and avail the opportunities which understand the change and adapt it into the business. will help in the success of the business. . : It is the least predictable environment in the . Knowing the Customers: Many organizations are marketing environment. These changes can affect the fighting competition for the same field. Every business profoundly. It involves , govt. agencies, organization wants to earn profit and sustain in the and groups etc. which influence the organizations and market, and it can be done by better understanding of the individuals. It is directly related with the economic the environment and to identify the advantages over its system of the country and the economic policies. Some competitors. standards are specified for packaging, labeling, manufacturing of products etc. Most of the promotional Conclusion activities are under the control. As India is a democratic Activities of marketing are influenced by various internal country, it has a stable political system, where and external factor of the marketing environment. Some of government plays the most important role as the these factors are controllable while some are not under the planner, organizer, promoter, and regulator of all the control of the business, to avoid those factors, a business economic activities. need to adapt itself to those changes and take necessary . Socio-Culture: This environment is the most difficult steps regarding them. These internal and external forces to evaluate, so it is the most challenging environment together become the marketing environment for the for the organization. It includes attitude, norms, beliefs, business. values, of the individuals. These create both The internal factors consist of those factors which are opportunities and threats for the business. The happening inside the organization like human resource of important factors which influence the buying and the company, management structure, image of company, consumption behavior of people are their habits, financial decisions etc. These factors are under the control languages, beliefs, customs, taste and preferences, their of the business and it can be easily sorted. While the etc. These factors influence their demands external factors include micro and macro factors. Micro and then affect the business. Change in lifestyle of the factors are related to the immediate environment of the firm people influence the marketing environment of the which includes suppliers, consumers, competitors, market organization. intermediaries and public. These factors are under some control of the business because marketing department has Importance of Marketing Environment: Environmental direct contact with them. Macro factors of external analysis is important because it provide the overview of environment include technology, politics, economy, social conditions of market and the impact of environment on the culture, legality, demography etc. These factors of external business. It plays an important role in sustaining the environment are totally out of the control of the business consumers of the business in changing market conditions. and affect the whole industry equally. To remain in the Every business whether it is small or large, works within the market, a marketer needs to constantly review the macro market environment. Its existence depends on its environment of the business and keeps on making changing adaptability in Internal and External environment. To the strategies accordingly. remain in the market, besides the changing environment, it is necessary to analyze the marketing environment. Some of References the importance of analysis of marketing environment is: 1. Kotler, Philip, Gray. Armstrong, Principles of . Necessary for Planning: Study of both the internal and Marketing Prentice Hall, 2008. external environment is necessary for planning the 2. Kotler, Philip, Gray, Armstrong, Agnihotri Y, Prafulla future of the business. Marketer needs to know about et al. Principles of Marketing-A South Asian the changes which are happening in the market, and Perspective Prentice Hall, 2013. need to make prediction for the future of the business, 3. Sylvester GS. Preliminary Certificate in Marketing regarding the changes in the market; only the business Study text, 2014. will be able to succeed. 4. Ashwathappa K. Business Environment for Strategic . Knowing the Customers: A complete knowledge Management, Himalaya Publishing House, Mumbai. about the market is necessary to know about the needs 5. Tandon BB, Tandon KK. Indian Economy, Tata and wants of the consumer. It can only be done by McGraw Hill, New Delhi. analyzing the environment of the marketing. It helps in 6. Skinner J, Steven S. Marketing, Houghton Miami removing the threats in the market and helps in Company, Boston. understanding the needs of the consumers about what 7. Kotler, Philip. Marketing Management - Analysis, they actually want and what the business is providing to Planning, Implementation, and Control, PHI, New them. Delhi.

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8. https://www.researchgate.net/publication/319085287_T he_Marketing_Environment 9. https://bizfluent.com/info-8414924-five-components- external-marketing-environment.html 10. https://www.abcofmarketing.com/explain- characteristics-nature-components-marketing- environment/ 11. https://en.wikipedia.org/wiki/Market_environment

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