In a marketing environment, a country’s economy and businesses are affected by what is happening around the world. For example, the economic consequences of the decline in the Far East economy are already affecting the Nigerian economy.
These consequences include a decline in exports to these countries and a decline in the Nigerian Naira against major currencies such as the British Pound and the U.S. dollar.
This will make imports of foreign products more expensive, but hopefully make Nigerian products cheaper when exported.
But, on the other hand, with the depreciation of the Far East currency units (Singapore, Malaysian ringgit and Thai Thai Baht).
Exports from these countries will also be more competitive, thus creating a highly competitive international market. This is an example of the impact of the marketing environment on certain countries and their businesses, employees and citizens.
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Companies more directly feel some of the impact of the market environment, while others have more indirect ways of affecting the business environment.
For example, the decline in economic activities in countries such as Nigeria due to insufficient rainfall has little impact on the number of employment in the industry.
However, it will have a chain impact on higher education sectors such as tractor repair and service industries, food sales, and general economic survival in several rural towns in Nigeria.
Therefore, the impact on the variables discussed above is necessary to understand the functions of the marketing environment.
In a marketing environment, there are three seed environments (micro environment, market environment and macro environment) – each environment affects the daily operations of the enterprise.
The CEOs (CEOs) of the business and its management team should evaluate the impact of the marketing environment on the business, and one way to do this is to use SWOT analysis (determine the strengths and weaknesses of opportunities and threats to the business).
Remember that any business should be able to perform SWOT analysis.
Marketing environment
The composition and function of the marketing environment
The marketing environment consists of three components, called the sub-environment, which are called the microenvironment, the market environment and the macroenvironment.
Each sub-environment consists of variables that can affect the business, its workers and their families.
Note that this competition is not only encountered in formal sectors of the economy (e.g. in the case of grocery price competition between Shoprite Checkers and Pick and Pick and Paick).
However, an informal sector between two electronic stores on the same street in Lagostino Square can also exist:
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Microenvironment
The microenvironment of an enterprise is the activity carried out by the business. Businesses must perform various activities to operate well and achieve profit targets.
For a clear view, let’s take a look at the Hajiya Amina flower shop in Balogon Market, Lagos. Hajiya Amina hired two permanent floral arrangements and a deliveryman. Her monthly rent is N3,000.00. She has to pay N600.00 per month on the delivery van.
The flowers she bought from the market must be paid in cash. Among these limitations of the microenvironment, Hajiya Amina must fulfill her promises and earn enough money to make a living for herself and her two children!
This example illustrates the impact of a microenvironment on an enterprise. It also shows control over most activities in part of the microenvironment (business owners can decide to hire fewer employees or move to cheaper places).
Variables in the microenvironment must be completely managed by Hajiya Amina to ensure success.
These variables are also called controllable variables. The following is a brief description of this microenvironment.
product
Managing products requires planning and developing the right products and services to be sold by the business manager.
Guides are needed to change existing products, add new products, and take other actions that affect product classification.
price
Determining the correct basic price of its business products is one of the crucial microvariable factors that an enterprise should consider.
In addition, policy on discounts, freight and many other price-related variables form part of the business board to ensure all goals are met.
Promotion
Promotion requires weapons used to inform and convince the market. These include advertising, personal sales, promotions and promotions.
Distribution/location
It is related to the management of marketing intermediaries and distribution of corporate products. It is the responsibility of each business to select and manage the trade channels in which the product will reach the right target market at the right time and develop distribution systems.
Management or marketing executives can manipulate these variables to achieve business goals. For example, the functionality of a product can be re-identified and the price can be raised or lowered according to market conditions.
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Market environment
The main variables in the market environment are:
- consumer
- Competitors
- intermediary
- supplier.
These variables will affect the business, which makes management have to respond to opportunities and threats in the market environment.
(1) consumer
Are people buying your products and services? Identifying the target market for a product or service is one of the most critical management activities for management.
(2) Competitors
It is a natural component of capitalist society. We are used to the fact that in most products and services, various competitors compete for our money.
This is illustrated by examples of Toyota and its competitive environment in which it operates.
(3) Intermediary
Intermediaries such as wholesalers and retailers have evolved to bridge the gap between manufacturers and suppliers.
New developments in this field pose an opportunity for certain businesses or threats operating in that particular industry.
An example is the development of petrol gas station convenience stores and its impact on traditional convenience stores such as Nigerian cafes.
(4) supplier
The business depends on the business of the supplier. An example of a supplier is a capital supplier to a business.
Traditionally, commercial banks are funding providers for small and medium-sized enterprises.
Public companies such as (Nigeria Bottlement Company) and Coca-Cola Manufacturers also provide additional capital supply from shareholders.
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Macro environment
It is crucial to realize that businesses operate in a larger macro environment.
Businesses cannot always control these variables and must evaluate to identify potential opportunities.
In the early 1990s (during the Gulf War), the rise in world crude oil prices was an example of the impact of macro variables on business, especially on ordinary citizens of a country.
(Remember, the sharp rise in gasoline prices in Nigeria).
The following six macro variables in the macro environment may affect the company at any time:
- Technical environment
- Economic environment
- Social environment
- Natural or physical environment
- Institutional/Political Environment
- International environment.
You should have identified six variables that may affect Hajiya Amina business in many ways. Let’s check them now!
Technical environment
This environment is affected by innovation and change. For example, new manufacturing processes and latest technologies may affect the type and quality of clothing sold by wholesalers and retailers in Nigeria.
Only new materials available need to be considered, such as those that combine natural and synthetic fibers to create crease-resistant materials.
Economic environment
This variable is known to everyone. Increased inflation, changes in exchange rates, and higher personal income tax rates are examples of how the economic environment affects wholesalers and retailers in Nigeria.
Social environment
Social change is common all over the world. A decline in population growth rate may ultimately harm the sales of imported clothing inflows into affected markets.
In the case of Hajiya Amina Enterprises, the changing role of women in society (more women and more working women experienced in this democratic distribution) may be a positive variable and may lead to higher turnover.
To increase the complexity of the tasks faced by marketing supervisors, such as lifestyle, beliefs, norms, values, folk customs and other cultural models.
Natural or physical environment
This variable is very concerned with people around the world. Scarce resources are indispensable in the packaging of clothes.
For example, wasting packaging materials must pay attention to Hajiya Amina Enterprises.
Politics/government is also known as institutional environment
Hajiya Amina Enterprises pays special attention to this variable in the macro environment. An example of the effect of this variable is the surcharge for imported clothing.
This will affect the price of clothing for sale in Hajiya Amina Enterprises, Nigeria. Other variables include general and fiscal policy.
International environment
As stated at the beginning of the topic, Nigeria is part of the global village. Therefore, for example, our economy and its operations are directly affected by economic development in Far East countries.
As far as Hajiya Amina Enterprises is concerned, it may benefit from higher exchange rates, allowing Mr. Audu Giya to import clothing at affordable prices.
Now, you should know that the macro environment is a positive force that affects every business operating in Nigeria, and no business of size can be ignored.
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