Q) Describe the elements of a company’s marketing environment and illustrate how

marketers play a critical role in tracking environmental trends and spotting competitive
opportunities.

“If you want people to buy your products, your products have to become part of their
environment.”
-Eric McFadden
A company’s marketing environment consists of the factors and the forces outside the marketing
which influences the ability of marketing management to build and maintain successful relations
with the targeted customers. According to Philip Kotler, a company's marketing environment
consists of the actors and forces outside of marketing that affect marketing management's ability
to develop and maintain successful transactions with its target consumers. The elements of
marketing environment mainly constitute microenvironment and macro environment.

1) Micro Environment: Microenvironment constitutes the factors which are close to the
company and can affect its ability to serve its customers. Micro environmental factors which
influence the marketing decisions of the company are as follows:
 Organizational Internal Environment: Organization’s financial, production and
human resource capabilities influence its marketing decisions to a large extent. For
instance, we may have a responsive research and development department to develop a
new product. So also, the production department may have its own facilities for
producing the new product. It is also necessary to consider how non-marketing
departments in the organization cooperate with the marketing department. Besides, the
marketing department must work in close cooperation with the other departments,
especially the quality control and production departments. Sometimes it is the sales force
that must bear the major task in the strategy.
 Suppliers: For production of goods or services, we require a variety of inputs. The
individuals or firm who supply such inputs are called suppliers. Success of the marketing
organization depends upon the smooth and continuous supply of inputs in required
quantities on reasonable terms. Hence suppliers assume importance. The timely supplies
of specified quality and quantity makes the producer to keep up the delivery schedule
and the quality of the final product.
 Intermediaries: Normally, it is not possible for all the producers to sell their goods or
services directly to the consumers. Producers use the services of a number of
intermediaries to move their products to the consumers. The dealers and distributors, in
other words the marketing intermediaries, may or may not be willing to extend their
cooperation. These persons normally prefer well established brands. Newcomers may
find it extremely difficult to find a willing dealer to stock his goods. From newcomers
they may demand favorable terms by way of discount, credit, etc., and the producer may
find it difficult to satisfy them.
 Competitors: Competitors pose competition. Competitors, strategies also affect the
marketing decisions. Apart from competition on the price factor, there are other forms of
competition like product differentiation. There are also competitors who use brand name,
dealer network. or close substitute products as the focal point. Their advertising may
present several real or false attributes of their product. If one advertises that his product
has an imported technology, the other may say that he is already exporting his product.
Competitor's strategies sometimes may change an opportunity in the environment into a
challenge.
 Customers: There are many types of customers. A firm may be selling directly to the
ultimate users, the resellers, the industries, the Government or international buyers. It
may be selling to any one or all of these customers. Each type of consumer market has
certain unique characteristics and the marketer should be fully acquainted with' the art of
persuading and selling to these consumers. The population also contains the potential
consumers of the company's product. It may not be easier to identify the persons who are
likely to become the customers of a company. The goodwill built-up by a company
sometimes influences the consumers to become the customers of a company. Companies
generally try to build good public relations and create a favorable attitude among the
people or groups of people. Government and consumer action groups are special
categories with whom a negative attitude is to be avoided. Thus, the public also
constitute an element in the environment.

2) Macro Environment: The macro environmental factors that exert influence on an

 Physical Environment: The earth's natural renewable resources (e.g. forest, food
products from agriculture, etc.) and finite non-renewable resources (e.g. oil, coal,
minerals, etc.), weather (climatic) conditions, land shapes and water resources are
components of an environment which quite often change the level and type of resources
available to a marketer for- his production. For example, Nepal does not have enough
petroleum resources, and imports petrol and other products. Recently the Gulf War has
drastically affected the supply of petrol and diesel in the country. This had lot of
implications for the companies consuming Petro-products.
 Technological Environment: Technology is shaping the destiny of the people. The
revolution in computers, electronics and communication in general may make one's
production out of the tune with the current products and services. For example, new
printing technology like laser printing and desk top publishing, has already made the
labor-intensive type-set printing uneconomical.
 Political and Legal Environment: Political changes bring in new policies and laws
relevant to industry. Government regulation continues with different intensities and the
law and the rules framed thereunder are becoming complex. Many areas of business are
brought under one law or the other, and the market & cannot escape from the influence
of these laws. The tax laws, the sales tax, excise duty, income-tax, etc., have direct
 bearing on the costs and prices of the products and services marketed. So also, the
policies relating to imports and exports. Since these factors affect all the units, (they do
not affect a single marketer alone), these are considered as the forces in the macro
environment.
 Economic Environment: The state of the economy measurable in terms of the Gross
National Product (GNP) and per capita income as well as the favorable or unfavorable
position of the balance of trade determine the economic environment. Occurrences of
war, famine and per capita income as well as the favorable or unfavorable position of the
country. For example, if the monsoon is good, the agricultural output will be more and
the people depend on agricultural get more income. This enables people to buy more
consumer goods. Thus, the demand for consumer goods increases. Similarly, a bad
monsoon will adversely affect the demand for fertilizer.
 Demographic Environment: Marketers are keenly interested in the demographic
characteristics such as the size of the population, its geographical distribution, density,
mobility trends, age distribution, birth rate, death rate, the religious composition, etc. The
changing life styles, habits and tastes of the population, have potentials for the marketer
to explore. For example, when both husband and wife go for jobs, the demand for
gadgets that make housekeeping easier and the semi-cooked food products increase.
 Socio-Cultural Environment: Last but not the least, there are core cultural values
which are found stable and deep rooted, and hence change very little. Even in a given
culture, the entire population may not adopt the changes. There are different degrees with
which people adopt them. Religion is also an important component of culture which has
implications for the marketer. For example, Hindus worship the cow and do not eat beef.
So, the products made out of beef meat do not have demand. Thus, the culture of the
society influences the consumption pattern to a certain extent. Culture also pervades
other human activities by determining their values and beliefs.

Marketers play a very critical role in tracking environmental trends and spotting
opportunities. This is because marketers are in charge of branding a business,
advertising, and carrying out market research. Marketers are also more in touch with the
customers since they interact with the customers during advertising and promotions, and
they also receive and respond to customer's feedback. As a result, marketers are better
placed to pick out environmental trends and spot opportunities since from their
interactions with customers and the market; they can pick out what the customers are
saying about products as well as the areas that need improvement or new areas where a
business can venture in.
I could illustrate the aforementioned role with one of the success stories that I have read and
experienced of the hospitality industry. The story goes like; there used to be a monopoly market
of a hotel in an area, Suppose Hotel A. It had built itself as a brand in the whole region. Several
competitors with best services and facilities tried to compete with that hotel but that hotel was
always on top in regards of sales and profit. After analyzing the case study, I found that their
marketing strategy was somehow unique in comparison to other local hotels.
1. Exclusivity: When other hotels started to decrease their prices in the quest of gaining
more customers, Hotel A focuses on providing additional facilities maintaining the same
price but with greater level of services. For example; Implementation of BB (Bed
Breakfast) plan and MAP plan including in the room rate. Though seems normal but
was a very unique concept in that local area. Similarly, sufficient parking area and the
main differentiations i.e. the space, cleanliness and greenery environment in the
periphery is what make that hotel exclusive in that area.

2. Entertainment: The reason that hotel has average 75-80% of annual occupancy is the
way of their marketing strategy. What they do is during slower seasons, they host
special events. For example, if November is hotel’s slow month, they host a limited
availability event like Lok Dohori event with free drinks and snacks.
Similarly, in order to encourage local people to attend, flyers and invites are posted in
the surrounding postcodes with discounts on. Similarly, by using digital marketing, like
emails and social media, they advertise further afield which in turn maintain their sales
and profit even in slower seasons.

3. Amplification: In order to make people talk about the hotel more, firstly, they never
compromised in the services provided. As per them, they know they are not perfect but
they always make sure that the guests or customers should not have to complain about
any issues more than once. That makes their hotel anyone's permanent choice in that
area. Lastly, the ever-smiling faces; Be it the guards, front desk officers, room boys or
managers, the warm hospitality and their vision to serve from their heart is what makes
them the talk of the town.

4. Tricksterism: I happened to notice few tricks that Hotel A applies in order to attract
new guests. So what they have done is that in association with Traffic Police, they have
invested in the installation of road signs in the main national highway along with their
advertisement. So, anyone travelling through that highway happen to notice that
advertisement of that hotel repetitively causing their psychology to enter in the hotel
premise for at least once. Similarly, they have invested in SEO. So, whenever anyone
searches that place in the Google, their hotels pop out at the top. Wonderful, isn't it?

Hence, marketers play a critical role in tracking environmental trends and spotting
competitive opportunities