The Marketing Environment

 The Marketing Environment
Marketing is essentially an externally focused function of an organisation. The firm’s environment defines its threats and opportunities because; organisation is a sub-system of a broader supra-system.
Marketing activities are influenced by several factors inside and outside a business firm. These factors or forces influencing marketing decision-making are collectively called marketing environment. It comprises all those forces which have an impact on market and marketing efforts of the enterprise.

According to Philip Kotler, Marketing environment refers to “External factors and forces that affect the company’s ability to develop and maintain successful transactions and relationships with its target customers”.
In simple terms, ‘environment’ implies everything that is external to the organisation. Environment is what is outside the organisation. It is something that surrounds an enterprise. It is the sum-total of external factors within which the enterprise operates.
It is made up of tangible and intangible factors both controllable and uncontrollable. It is made up of turbulence and tranquillity, science and technology, ethics, economic and political situations, attitudes, traditions, cultures, alliances and so on.
Scanning the Environment:
Marketing activities do not take place in a vacuum, isolated from all external forces. In fact all marketing operations are conducted in a highly complex, dynamic and changing environment.
The marketing environment offers both opportunities and threats. Successful companies know the vital importance of constantly watching and adapting to the changing environment. A company’s marketers take the major responsibility for identifying significant changes in the environment.
More than any other groups in the company, marketers must be the trend trackers and opportunity seekers. Although every manager in an organisation needs to observe the outside environment, marketers have two special aptitudes. They have disciplined methods – marketing intelligence and marketing research – for collection of information about the marketing environment.

Environment scanning is a constant, important activity of successful companies. This process includes gathering, filtering and analyzing information related to the marketing environment. It also includes monitoring the changes taking place in the environment and forecasting future status of each factor.
Such analysis helps to spot opportunities and threats in the environment, and pinpoints the ones that are specifically relevant to the company. The company’s marketing people have the responsibility for scanning and identifying significant changes or trends in the marketing environment.

Importance of Environment Analysis:
1. It helps in marketing analysis.
2. It can assess the impact of opportunities and threats on the business.
3. It facilitates the company to increase general awareness of environmental changes.
4. It is possible to develop effective marketing strategies on the basis of analysis.
5. It helps to capitalize the opportunities rather than losing out to competitors.
6. It facilitates to understand the elements of the environment.
7. It helps to develop best strategies, in the light of analyzing “what is going around the company”.