micro environment

Micro Environment: Definition and Its Components (Explained)

What is Micro Environment?

Micro-environment refers to the factors that are close to the organization and affects its serving ways of customers. It is also called a task environment that can be influenced to some extent by the actions of the organization.

The micro-environment consists of external environmental forces that are part of a company’s marketing system. Although these forces are classified as non-controllable forces, they can be influenced to a greater degree by management. In other words, microenvironment variables are partly controllable in a particular situation.

Components or Variables Mirco Environment

The major microenvironment variables are explained as follows:

Customer

Customers are the real market for products and services. Their personal characteristics such as buying habits, spending patterns, the standard of living, education, cultural and religious values, attitude, etc. affect the organizations. Customer or firms target markets are classified into four major categories:

Consumer market: A consumer market consists of potential buyers who intend to benefit from the goods or services themselves. For example, a housewife buying vegetables to cook for their family.

Industrial market: An industrial market consists of businesses, individuals, or organizations that purchase goods and services for producing other products or services. A sugar factory buying sugarcane for the production of sugar.

Reseller market: A reseller market consists of individuals or organizations that buy products and services with a view to selling them to others. A retailer buying noodles in bulk from noodle factories to sell them to the general consumer.

Government and other non-profit markets: A government market consists of organizations that purchase products for the final use in the organization. For example, the ministry of foreign affairs buying computers in bulk for office purposes.

Producer-Suppliers

Producer-suppliers consist of individuals or organizations regularly supplying the products to the marketing organization for reproduction or resale purposes. The success of marketing organizations depends upon the regular supply of goods and services by the suppliers. However, marketing executives often do not concern much with the supply side because suppliers can be changed on the basis of the marketer’s requirement. However, the role of suppliers becomes significant and critical during the period of scarcity.

Marketing Intermediaries

Marketing intermediaries are independent business organizations that help the flow of goods and services from the producing point may be either (marketing organization) to the consumption point (markets). Marketing intermediaries may be either:

  • Resellers such as agents middlemen, distributors, wholesalers, retailers, or other forms,
  • Various facilitating organizations providing services in the flow of goods and services such as transportation, warehousing that are needed to complete exchanges between buyers and sellers.

When the marketing organizations are not capable of reaching directly to the target market the role of these intermediaries becomes decisive and can affect the management decision. However, when a marketing organization is capable or intends to distribute products by itself the role of some intermediaries may be minimal.

Competitors

Such is the nature of the business, no company stands alone for purpose of satisfying the customer needs. It faces competition. Competitors are the entities that serve the same group of customers. For a firm to be successful it must be able to deliver greater customer value than the competitors. Competitors hence another significant micro-environment variable. A firm’s activities are often influenced by the type, level, and extent of competition.

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