Marketing is a process of planning and executing the conceptions, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organisational objectives. (AMA,1985).
Organisations survive and prosper through meeting the needs and wants of customers. This important perspective is commonly known as the marketing concept.
The essence of marketing concept is the idea of placing customer needs at the centre of organizations decision making. The need to adopt this approach stems from a number of factors, including increased competition, better informed and educated customers and, perhaps most importantly, changing patterns of demand. An organisation that adopts the marketing concept accepts the needs of potential customers as the basis for its operations. Success is dependent on satisfying customer needs.
The practicalities of implementing the marketing concept shows how fundamentally marketing can influence the structure and management of the whole organization. First we are going to look at the complexity of organizational environment and how marketing can help to manage and make sense of the relationship between the organization and the outside world.
There are many people, groups, elements and forces that have the power to influence directly and indirectly, the way in which organization conducts its business. The organizational environment includes both the immediate operating environment and the broader issues that affect business in the long term. They are however, the marketing environment which consists of the actors and forces that affect a company’s capability to operate effectively in providing products and services to its customers. It is useful to classify these forces into the microenvironment and the macroenvironment.
A market orientated firm looks outwards to the environment in which it operates, adapting to take advantage of emerging opportunities and to minimize potential threats. I will take the example of Kraft Foods and will examine its marketing environment.
Kraft Foods is a long established food manufacturer with its origin in the United States which is still its key market with a strong presence in the UK and Europe. It is a truly multinational organisation buying raw materials globally and operating in over 160 countries. Growth has predominantly been as a result of acquisitions and there have also been strategic divestments as well. The takeover of Cadbury establishing the organisation as the number 2 in terms of packaged foods was its biggest acquisition. It is thought that opportunities for such takeovers in the future are greatly limited.
The Micro Environment
The external environment encompasses those forces and agencies external to the marketing firm itself but with which the organization directly interacts. Some of these forces and agencies will be closer to the operation of the firm than others, e.g. a firm’s customers, suppliers, agents, distributors and other distributive intermediaries and competing firms. These “closer” external constituents are often collectively referred to as the firm’s micro-environment or proximate environment to distinguish them from the wider external forces found, for example, in the legal, cultural, economic and technological sub-environments. The micro-environment consists of people, organisations and forces within the firm’s immediate external environment. Of particular importance to marketing firms are the sub-environments of customers, suppliers, competitors and distributors (intermediaries). These sub-environments can each have a significant effect upon the marketing firm.
The supplier environment
This consists of other business firms or individuals who provide the marketing firm with raw materials, product constituents, services or, in the case of retailing firms, possibly the finished goods themselves. Firms, for Kraft Foods, will often depend