Importance of the micro economic environment to business organisations

It is associated with a small area in which the firm functions.

Importance of the micro economic environment to business organisations

Materials Markets The internal environment is under the control of the marketer and can be changed with the changing external environment. Nevertheless, the internal marketing environment is as important for the business as the external marketing environment.

This environment includes the sales department, marketing department, the manufacturing unit, the human resource department, etc.

External Environment The external environment constitutes factors and forces which are external to the business and on which the marketer has little or no control.

The external environment is of two types: Micro Environment The micro component of the external environment is also known as the task environment. It comprises of external forces and factors that are directly related to the business.

Market intermediaries include parties involved in distributing the product or service of the organisation. Macro Environment The macro component of the marketing environment is also known as the broad environment.

The macro environment can be divided into 6 parts. Demographic Environment The demographic environment is made up of the people who constitute the market. These factors include the GDP, GNP, interest rates, inflation, income distribution, government funding and subsidies, and other major economic variables.

Physical Environment The physical environment includes the natural environment in which the business operates. This includes the climatic conditions, environmental change, accessibility to water and raw materials, natural disasters, pollution etc.

Technological Environment The technological environment constitutes innovation, research and development in technology, technological alternatives, innovation inducements also technological barriers to smooth operation.

Technology is one of the biggest sources of threats and opportunities for the organisation and it is very dynamic.

Social-Cultural Environment The social-cultural aspect of the macro environment is made up of the lifestyle, values, culture, prejudice and beliefs of the people.

This differs in different regions. Importance of Marketing Environment Every business, no matter how big or small, operates within the marketing environment.

Explain the importance of the micro-economic environment to business organisations

The business environment is one of the most dynamic aspects of the business. In order to operate and stay in the market for long, one has to understand and analyze the marketing environment and its components properly.

Essential for planning An understanding of the external and internal environment is essential for planning for the future.

A marketer needs to be fully aware of the current scenario, dynamism, and future predictions of the marketing environment if he wants his plans to succeed. Understanding Customers A thorough knowledge of the marketing environment helps marketers acknowledge and predict what the customer actually wants.

In-depth analysis of the marketing environment reduces and even removes the noise between the marketer and customers and helps the marketer to understand the consumer behaviour better. Tapping Trends Breaking into new markets and capitalizing on new trends requires a lot of insight about the marketing environment.

The marketer needs to research about every aspect of the environment to create a foolproof plan.

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Threats and Opportunities A sound knowledge of the market environment often gives a first mover advantage to the marketer as he makes sure that his business is safe from the future threats and taps the future opportunities.

Understanding the Competitors Every niche has different players fighting for the same spot. A better understanding of the marketing environment allows the marketer to understand more about the competitions and about what advantages do the competitors have over his business and vice versa.

Did we miss something? Written by Aashish Pahwa A marketer, a dreamer, a traveler and a philomath. I prefer stargazing to spending nights in clubs.

You may also likeMicro-environment is the specific or the task environment of a business which affects its working or operations directly on a regular basis. While the changes in the macro-environment affect business in the long run, the effects of changes in the micro-environment are noticed immediately.

- Definition, Importance & Factors The economic environment in which a business operates has a great influence upon it. In this lesson, you'll learn about the economic environment in business. Economic environment economic environment consists of economic factors that influence the business in a country.

These factors include gross national product, corporate profits, inflation rate, employment, balance of payments, interest rates consumer income etc. The economic environment of business of modern times is highly complex.

Total economic environment is consisting of prevailing economic system, basic economic philosophy and economic policies of the government, stages of economic development, agricultural and industrial production, infrastructure, planning process, trade cycles, national income, savings, population, money supply and .

Importance of the micro economic environment to business organisations

The economic environment of a business will play a pivotal role in determining the success or failure of a business. Let's first consider some macroeconomic factors. Importance Of The Micro Economic Environment To Business Organisations.

Am going to be discussing the importance of international trade in our modern, commercial world as producers in various nations make profit from market expansion than limited selling within their own region, the importance economic integrations between different state, nation and how the importance of global .

Marketing Environment: Explanation, Components, & Importance | Feedough