Micro and Macro Marketing Environments that are beyond Marketers Control - Case Study Example

Marketing Environments Name: Institutional affiliation: Micro and Macro Marketing Environments that are beyond Marketers’ Control Introduction There is no organization or business that operates in a vacuum. The businesses operate in the environment in which they have either direct control or no control at all. Marketing environment refers to the factors that either directly or indirectly affects or influence the business’s ability to carry out its operations (Manickam & 2013). Marketing environment can be categorized as internal and external environment. External environment can further be subdivided into the micro environment and macro environment. The essay, therefore, focuses on the micro and macro environment that the marketers have no control over. Micro Environment Micro environment refers to factors of the marketing environment that influence the business operations and the industry in which it operates, but the factors do not necessarily affect all the players in the industry. Micro environment refers to the immediate forces to the business that influence its operations (Manickam & Sriram, 2013). The forces include all persons and organizations that directly affect the operations of a business entity. The micro environment factors that marketers have no control over include customers, suppliers, competition, the structure of the industry, the public and the market channels. Competition Competition is inevitable in any business industry because of the many products and services in the industry that satisfy similar consumer needs. Competition is defined as the rivalry between businesses offering similar goods and services with the aim of dominating the market share and maximizing the profit (Jundong, Eason & Chi, 2014). Marketers strive to increase the sales volume and sales revenue using various components of a marketing mix commonly known as 4P’s. Even though the marketers have the ability control the marketing strategies of their companies, they do not have the ability to control competition in the industry. Marketers face various types of competition in various industries. Some of the common types of competition include monopoly, oligopoly and monopolistic competition. Monopoly refers to the situation where one business or company controls the market. Increased liberalization of the market has made monopoly a rare case. A company may be the sole provider of the goods or services, but that does not mean that consumers lack substitutes of goods or services that the company offers. Therefore, marketers still face competition even in the cases of monopoly. The most common type of competition that marketers face is monopolistic where companies sufficiently differentiate the goods or services that they offer to consumers (Jundong, Eason & Chi, 2014). Despite the various marketing strategies applied by various marketers, they still have no control over the competition. Therefore, marketers have no control of competition taking place in the industry because no single company or business has the monopoly of providing goods and services and satisfying the needs of the various customers in the market (Jundong, Eason & Chi, 2014). Customers have different taste and preferences, making competition inevitable. In addition, marketers lack the ability to control consumers’ taste and preference. Marketers also cannot control the type and quality of goods and services produced and provided by other companies. Consequently, they cannot control competition taking place in the industry. However, marketers can find ways of remaining competitive by taking the viewpoint of customers. Customers Marketers always target four categories of customers whenever they are doing marketing. First, the main category is the consumers who comprise of individuals and households buying goods or services from a company. Another target market is the industrial market that comprises of players in the industry that purchase and use goods and services from a company in the production of other goods and services (Manickam & Sriram, 2013). The third category are resellers, which may include retailers and wholesalers in the market. The remaining two categories include the government and the international markets. Even though marketers understand their target market, they have no control of the customers they serve. The main reason why marketers cannot control consumers is because the marketers have limited control over the behavior of consumers (Henneberg & O'Shaughnessy, 2009). There are many factors that control consumer behaviors that a marketer cannot control. The factors include cultural factors, social factors and physical factors, which the marketers have very minimal control over. For instance, physical factors like the climate and weather are likely to control the product a customer will buy regardless of the marketing strategies employed by various marketers (Henneberg & O'Shaughnessy, (2009). Customers in the dry and sunny environment are likely to buy more of the drinking water than those coming from a cold environment. Culture also plays significant when it comes to customer decision and marketers have very limited control of the culture. For instance, the Americans prefer taking ham and eggs during breakfast while Asians prefer rice. Despite the marketing strategies employed by various marketers, they cannot change the already entrenched culture. Therefore, they cannot control their customers’ behaviors, which are influenced by cultural, physical and social factors. In addition, it is very hard for marketers to control the decisions being made by their customers. Before, a consumer makes a decision, he involves himself in both internal and external searches. Internally, a consumer identifies the available alternatives in the market that can satisfy his needs. Consumers also engage in compensatory decisions by comparing the good and bad characteristics of the products that they want to buy. Therefore, many factors influence the decisions made by consumers. While some consumers concentrate on comparison shops where they pay close attention to difference in prices, some consumers are convenient oriented. Consumers’ perceptions also influence the decisions that they make (Manickam & Sriram, 2013). Some consumers have selective perception where they concentrate on the information of interest regarding the products in the market. At the same time, some consumers concentrate on the risks of buying and using a certain product. Therefore, there are many factors that control the customers’ decision to buy or use products and services in the market. As a result, marketers have no control of the customers in the market because the latter decides on the commodities to buy. Suppliers Suppliers play a critical role in the operations any business. They significantly influence the quality of goods and services that are supplied to the consumers because they provide the inputs and resources that a firm needs in order to produce their outputs. Suppliers, therefore, influence marketing strategies of the firms and marketers find it difficult to control suppliers. Companies are likely to experience supply shortages, supply delays, and labor unrest that are likely to affect the goods and services offered by a company (Roy & Menasco, 2015). In addition, the price of the input supplied by various suppliers also affects the final prices of goods and services. An increase in the prices of input is likely to lead to an increase in the final product produced by a firm. Higher prices are likely to reduce the sale volume and sales revenue that a company can earn. Even though the behavior of suppliers affects the sales of goods and services, marketers have no powers to control such behaviors. Therefore, suppliers determine the value delivery system of customers and marketers have no otherwise, but to collaborate with suppliers if they want to have a competitive advantage (Roy & Menasco, 2015). The partnership enables a company and marketers to gain value from the goods and services supplied. The partnership should have mutual benefits if a company wants to gain from suppliers who determine the quality of products they offer. Publics The public in marketing refers to a group of people that may have a direct, indirect, or potential interest in the operation of the business. Public influence the firm and the marketers’ ability to achieve their objectives. Therefore, publics can either promote or hinders marketers’ ability to pass their message to targeted consumers (Keller, 2009). The four main publics that affect marketing include financial publics, media publics, government publics and citizen-action publics. Despite the awareness of the various publics in marketing, marketers have no direct control of the behavior and the actions of various publics. Financial publics are one of the critical publics in marketing that markers have no control over. Financial publics include financial institutions, investment companies and shareholders. The perception that financial publics have on a business has an impact on the business because they directly determine the ability of other publics to do business with a company. For instance, if the financial publics have the perception that a company offers low quality products, then the consumers are likely to buy less of the product the company offers in the market (Ashill& Jobber, 2014). Media is another public that greatly influences consumer demand for a particular goods or services that is in the market. Media publics are the main source of information and they directly deliver information to the targeted consumers and other publics (Keller, 2009). Media public, therefore, has a great influence on the consumers and they can positively or negatively influence consumers regarding a particular product. Even though the media is independent and marketers cannot control them, the marketers can closely work with them for them to have a positive influence on the goods or services a company offers. Marketers also have no control of the government publics. The main way the government influence and affects a business is through legislation. The legislative bodies are always independent and the marketers have no control over them. The best a marketer can do is to work closely with the government and to be aware of the legislation enacted by the government. Marketers should constantly consult with the government officials and relevant government agencies for them to abide by the laws and legislation set by the government. In addition, citizens have the right to question the actions of marketers. Citizens are also protected by the consumer protection laws made by the government. Marketers have no control over the action and the behavior of governments and citizens. Marketing Intermediaries Marketing intermediaries are the businesses that bridge the gap between the producers and the final consumers of goods and services. They assist producers in, marketing, selling and in the distribution of goods and services to the final consumers. Two major marketing intermediaries include retailer and wholesalers. Companies find it difficult and expensive to directly deal with the clients, which makes the intermediary inevitable in a business setting. Therefore, the success of marketing depends on the effectiveness of the intermediaries who have a personal touch with the final consumers. However, marketers have no control of the intermediaries once the goods have been sold to them (Ashill& Jobber, 2014). Even though a company may have a say on the price of the goods and services that they offer, it does not have much control on the final price charged by the intermediaries. Macro Environment Macro environment refers to the factors that affect all the players in the industry. Macro environment factors in marketing affect all the firms that are found in an industry (Palmer, 2012). Factors in macro environment are found outside a company in the industry and they do not include immediate environment. The macro environment includes economic environment, social-cultural environment, political and legal environment, and technological environment. Marketers cannot control the above factors in the macro environment in marketing. Economic Environment Economic environment refers to factors that influence the purchasing power of the consumers and how they spend their incomes. Basically, the economic environment in marketing refers to the level of demand in a given economy. Many economies are experiencing economic uncertainties that influence what the consumers are willing and are able to buy (Radu, 2013). Some of the economic factors that influence the impact of marketing include economic growth and development, interest rates, inflation, individual and household incomes, exchange rates and the level of unemployment in a given country. Unfortunately, marketers have the ability to control their marketing mix formulation and implementation, but they cannot control the economic environment in which they operates. The economic cycle is one of the strongest economic environment that affects the purchasing power of customers and business earnings and operations. Every economy experiences two economic cycles, which include booms and recessions. Marketers are always happy during an economic boom, but they face many challenges during the economic recession. Recessions are always characterized by a reduction in the purchasing power of consumers and increased unemployment (Manickam & Sriram, 2013). Therefore, both the consumers and firms are forced to adjust during during the two economic cycles The influence of economic cycles is beyond the control of the firm and the marketers. The major determinant of what consumers buy is their level of income, which is directly controlled by the economic performance. The income levels of consumers are likely to reduce during economic recession leading to a decrease in demand for goods and services (Manickam & Sriram, 2013). Consumers are known to reduce or postpone major purchases during recession due to the reduction in their income and the uncertainty of employment. Consumers prefer to buy basic needs like food and spend more on health matters than the luxurious goods and services like cars and entertainment. Consumers majorly postpone expenditure on durable goods like machinery and cars during a recession. During recovery, there is an increase in income and employment, and consumers start to spend on the goods and services that they postponed during recession. Consumers spend a significant percentage of their income purchasing automobiles like cars and other durable goods (Manickam & Sriram, 2013). Consumers also spend more on luxurious services like entertainment and tours during the recovery period. The purchasing trend continues up to the recovery period, which is the peak of economic activities. Apart from economic cycles, other economic environments that influence what consumers are likely to purchase include interest rates, inflation and unemployment. An increase in interest rate leads to a reduction in borrowing from financial institutions. As a result, the purchasing power of consumers is likely to decline. Inflation also increases the prices of goods and services, thereby reduces the purchasing power of consumers, especially when their incomes do not increase with an increase in inflation (Tellis, Yin & Bell, 2009). In addition, increased unemployment also reduces the income level of consumers, forcing them to buy only the basic goods and services. The above economic factors show that marketers have no control of the economic environment in which they operates. The economic environment greatly influences consumers’ purchasing power and their levels of income. Even though marketers would like to promote certain goods and services, the economic environment, which they do not control, significantly influences the goods and services consumers purchase. Socio-cultural Environment Socio-cultural environment can broadly be categorized into demographic, cultural, and consumerism. Demography is the structure of the population, and it includes factors like age, the number of population, and income distribution among the people (Keith & Simmers, 2013). Culture, on the other hand, refers to values, norms and beliefs held by people from different social settings. Consumerism refers to the increased independence of consumers. The above three factors affects the demand and the purchasing power of goods and services by the consumers in the market. In addition, the above factors cannot be controlled by either the firm or the marketers. Generally, it is the government that comes up with laws, policy and regulations to control such factors. Demographic Factors Population structure is influenced by various factors that include birth rate, death rate, the migration of people from different places, and the changes in the income of the people. The factors are controlled by the government policy and not the marketers. Population structure influences the demand and the consumption of goods and services that are promoted by various marketers from various firms. The world’s population is above seven billion, which means that there is a general increase in the demand of goods and services across the economies. Differences in population structure affects the demand and consumption of goods and services differently (Manickam & Sriram, 2013). Demographic changes offer both opportunities and threats to marketers. For instance, developed countries have been experiencing depopulation and the aging population. In these developed countries, there is an increase in the demand of goods and services that are consumed by older people. On the contrary, the goods and services consumed by younger generations are likely to experience a decline in demand. However, the market trends are different in developing countries that are experiencing an increase in population with a relatively younger population compared to the developed countries (Keith& Simmers, 2013). Another demographic factor that has been influencing the demand and consumption of goods and services lately is the increase in the number of single-person households. There has been an increase in the divorce rates while at the same time move to their own households before they marry unlike traditional days (Keith & Simmers, 2013).. The demographic trend has different implications on the demand and consumption of goods and services that the marketers have no control over despite their marketing strategies. Generally, an increase in single-person households has led to a decline in demand, especially household expenditure and housing. Single people are not likely to more spend money on children because of the few children that they have. At the same time, single people are more likely to rent homes that buying homes. Consequently, there will be a decline in the household expenditures and housing expenditures, leading to a decline in the in demand. In addition, single persons are likely to experience a significant reduction in income in case of unemployment or any form of illness (Ellis, Yin & Bell, 2009). The above examples and scenarios shows that marketers have no control of the demographic forces that influence the good and services that are needed in the society. They have no choice but to adjust to the demographic forces that influence the demand of goods and services if they have to remain competitive. The family structure is also changing into a dual-income families due to the increasing number of women that are entering the labor force. Dual-income families experience an increase in household income due to the additional income of the working wife. Despite an increase in income in the dual-income family, such households have very limited time for household activities. Consequently, dual-income families have led into an increase in the demand for time-saving equipments that are used in the households. Increased number of working women have also changed the automobile industry. More women are now demanding for vehicles and car manufacturers are now forced by the situation to design vehicles for women (Ellis, Yin & Bell, 2009). These are the changing trends in the market place that the marketers have no control over. They are forced to comply with the changing trends and to design their marketing strategies to comply with the trends. Cultural Factors Cultural beliefs refers to the norms, values, beliefs and behaviors that are found in the economy in which a firm operates. Cultural issues affect the purchasing behaviors of the people and the goods and services that they consume. Culture largely influences how people spend their income, especially discretionary income. For instance, Irish people are believed to be consuming many alcohol beverages and they spend a large percentage of their income on beverages. Muslims also do dot consume pork and any pork firm established in Muslim dominated region is not likely to prosper despite the efforts made by the marketers to promote the product (Ali & Al-Aali, 2015). These show that marketers have no control of the cultural factors that influence the goods and services that people consume. Societal values also determine the behavior of consumers. The majority of people follow the societal values and they live up to them. Societal values greatly influence the goods and services that people buy and how they purchase them. Unfortunately, marketers have no control of the societal values that greatly influences consumer demands (Ali & Al-Aali, 2015). In addition, modern consumers have developed a global outlook because of the increased globalization. Consumers have therefore become more inquisitive and discriminative on the goods and services that they demand in the market. They ask numerous unpleasant question to marketers before they chose their preferred brands. Therefore, marketers rhetorics no longer apply to the modern consumers with international perspectives. They are more knowledgeable and are aware of the what they want in the market. Changes in fashion, taste and preferences are cultural issues that affect the goods and services that are consumed by different people (Heutel, 2014). Changes in fashion in the clothes that people wear, food that people eat, cars that people drive and the phones that people use affects the marketing strategies employed by various markers because they have no control over the changes. For instance, a change in taste and preferences in the phones that people use demand that phone manufacturers must manufacture phones that can access internet (Manickam, & Sriram, 2013). People no longer buy phones that do not access internet due to increased use of social media and search for information through the internet. A change in the lifestyle of people is another cultural factor that affects the demand of goods and service and that the marketers have no control over. For instance, it is very difficult to find a person without a mobile phone, even those found in remote areas have phones. According to GSMA, the numbers of mobile phones in the world surpass the total human population (Keith & Simmers, 2013). The GSMA data estimate that there are 7.22 billion mobile devices while the US Census Bureau estimates the total human population to be 7.19 billion. The statistics show that the use of mobile phone has become a lifestyle of many people across the globe and marketers can do very little to influence this trend. In addition, multiple lifestyle is creating complexity on consumers’ purchasing habits. People no longer live a stereotype life because people have learned to live their own life and they are deviating from the societal demands that used to shape their own lifestyle. In the modern society, a person can be a doctor and at the same time a gourmet and a gym instructor. In addition, a person can be associated with the highly valued profession, and instead of dining in five star hotels as people would expect, they end up taking supper in an ordinary hotel. People have learned to live the way they want and their behaviors are no longer predictable (Keith & Simmers, 2013). Multiple lifestyle is creating a nightmare for the marketers because they cannot predict the behaviors of consumers in the market. Marketers are increasingly finding it hard form the consumer segments. Consumerism Consumerism is emerging as one of the marketing environments that that marketers have no control over. Consumer power is increasingly shifting from the marketers of various firms. Consumers are increasingly becoming aware of their rights while at the same time the information regarding the goods and services available in the market is readily available in the internet. Therefore, marketers can do very little to persuade consumers to buy their goods and services because consumers already have enough information and knowledge regarding the commodities in the market (Ashill & Jobber, 2014). Political and Legal Environment Political factors also affect the operation of the business, including, marketing. Political factors affect marketing in two different ways. First, governments in place enact laws and regulations that must be obeyed by the marketers (Henneberg & O'Shaughnessy, 2009). Secondly, the ruling parties always come up with policies that set the tone of behavior in the public. The tone set the culture that affects the operations of the business. However, the main political factors that influence marketers are the legislation. However, marketers have no control of the political factors like legislation and policies that are enacted by the governments. They have to obey the legislation put in place. Most legislations set by the governments are aimed at protecting consumers. Some of the legislations that are aimed at protecting consumers are based on pricing. First, most governments set up laws and policies that prohibit price discrimination. During marketing, marketers cannot discriminate on the prices that they offer in the market unless the discrimination is based on cost-difference or a significant difference on the quality of goods or services that they offers (Kolsarici & Vakratsas, 2010). . Marketers, therefore, cannot use price discrimination to persuade consumers to buy their good and services. Their hands are tied by the price discrimination laws and policies set by the governments. Another area that is strictly controlled by the government is the safety of the products that are promoted by the marketers. There are various consumer protection act that ensures that the safety standards are met by the firms. Various laws set by the government to ensure that the products that are being marketed are of high quality and cannot affect the health of consumers. Therefore, marketers have to comply with the quality and safety of goods and services (Ali & Al-Aali 2015). The legislation, therefore, determine the quality and safety of the products that they market. Marketers follow the quality and safety standards set by the government. Apart from the quality and safety act, counterfeit legislations are also enforced by the government. Any marketers that promote counterfeit goods are committing an offense and are likely to be charged in a court of law. Currently, governments are coming up with legislations that give buyers’ rights over marketers who promote faulty goods or services. Marketers, therefore, must ensure that they promote goods and services that are genuine and that comply with the counterfeit acts (Ali & Al-Aali, 2015). Technological Environment No company in the modern economies can survive without adopting the latest technologies that are found in the industry. Information technology is one of the emerging technologies that greatly influence marketing and what the marketers are doing (Yadav & Pavlou, 2014). Communication is a key element in marketing and there are emerging technologies that are inevitable in marketing. Some of the new technologies used in marketing include social media, internet, and other marketing softwares that helps in marketing like the Customer Relationship Management Marketers cannot ignore these technologies if they want to be relevant in the market. Social media is one of the areas where marketers are focusing on. There are a lot of people using social media, which makes it a prime target for marketers (Atwong, 2015). Social media allows the conversation between the marketers and consumers that enable marketers to predict the needs, expectation and desires of the (LI & KANNAN, 2014).. Social media has turned marketing from a one-way conversation to a two-way conversation. Even though marketers have the option to use other media to market their products, currently, they cannot ignore the use of social media in marketing (Powell, Groves & Dimos, 2011). Another technology that cannot be ignored by marketers is mobile advertising. The increased use of mobile phones has made the use of mobile advertising inevitable because consumers are increasingly depending on their cell phone to access almost all the information that they need (Jay Sang, 2013). iPhone and iPad have taken mobile advertising a notch higher because they are able to reveal the detailed information about the consumer behaviors and daily life. Therefore, marketers cannot control the emerging technologies that are emerging in marketing and the use of the technologies are unavoidable in the 21st century. Conclusion Even though marketers have the ability to control the internal environment in marketing, they cannot control the external environment. The only option available for marketers in the external environment is to find ways of adapting to the external environment for them for them to remain competitive. 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