FACTORS AFFECTING A MARKET
There are numerous reasons why a market grows or reduces its profitability. The keen business owner understands that the firm is subject to influences found in both the internal and external environment that affect its level of operation.
Internal factors i. Financial position ii. Management capability iii. Personnel resources iv. Product and services offered External factors i. General economic condition ii. Characteristics of the population in the trade area iii. Social factors and cultural factors iv. Political factors
MARKETING ENVIRONMENT
The marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. It consists both the micro and macro environment.
MICROENVIRONMENTS
These consist of the actors close to the company that affect its ability to serve its customers, such as: the company itself and its subdivisions and suppliers that provide the resources the firm needs to produce its products. These are also marketing intermediaries, these are firms that help the company to promote, sell and distribute its goods to final buyers. These may include the following: i. Resellers are distribution channel firms. ii. Physical distribution firms help the company stock goods. iii. Marketing service agencies are marketing research firms. iv. Financial intermediaries include banks and credit companies. Other factors are competitors that operate in the same markets as the firm and the public: i. financial publics, - (how easy to obtain loans from lending institutions and service charges) ii. media publics, - (means of advertising) iii. government publics, - government regulations, polieces) iv. local publics, - by laws imposed by local governments) v. general public - (your competitors who sell similar products) vi. internal publics. - (employees must be supportive) Finally, customers are the most important actors. i. Consumers markets consist of individuals that buy goods for personal consumption. ii. Business markets buy goods for usage in production processes. iii. Reseller markets buy to resell at a profit. iv. Government markets consist of buyers who use the product for public service. v. International markets consist of all these types of markets across the border.
MACROENVIRONMENTS
Macroenvironments consists of the larger societal forces that affect the microenvironment. The study of human populations in terms of size, density, location, age, gender, race, occupational and other statistics helps businesses how to strategize. Changes in demographics result in changes in markets. These trends in today’s world, such as the world population growth and the changing age structure of the world population lead to opportunities for marketing niche products and services. There are also migration movements within countries, namely from the rural to urban areas, also called urbanisation. The following are the major macro environmental factors: i. Economic environment consists of economic factors that affect consumer purchasing power and spending patterns. ii. Natural environment involves natural resources that are needed as inputs by marketers or that are affected by marketing activities. Changes in this environment involve an increase in shortage of raw materials, increased pollution and increased governmental intervention. iii. Technological environment consists of forces that create new technologies, creating new product and market opportunities. It can provide great opportunities, but also comes with certain dangers. iv. Political environment consists of laws, government agencies and pressure groups that influence and limit various organisation and individuals in a given society. Current trends in our world today are increasing legislation affecting businesses globally and thus an increase in governmental influence over businesses. v. Cultural environment involves instructions and other forces that affect society’s basic values, perceptions, preference and behaviour. Cultural factors influence how people think and consume.