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The Marketing Environment

April 5th, 2021

No business exists and operates in a vacuum, but as a part and parcel of the environment in which it finds itself. Efficient and effective marketing strategy is a function of the marketing manager’s ability to understand the environment in which the business operates.

The marketing environment consists of a set of factors or forces that operate or influence a company’s performance in its chosen target market.

Jain (1981:69) defined the marketing environment to include all those factors that may affect the organization directly or indirectly in any perceptible way. Marketing environment factors affects the organization by the way of input and the organizations also affect the environment by output. The relationship between the organization and the marketing environment is often referred to as “inseparable” the organization and it environment are constantly in a state of: give and take” or homeostasis.

The marketing environment consist of those forces or element that impacts on the company’s capability to operate effectively in its chosen target market.

The marketing environment is divided into two major components. The elements are,

Internal environment: the internal environment is concerned with the controllable variables. Controllable variables are categorized into two groups, they are; the strategy variables and unmarketable variables. External environment: the external environment is concerned with the uncontrollable variables. These variables are called uncontrollable because the marketing manager cannot directly control any of the elements. The marketing manager is left with the option of adapting to the environment by prompt observation, analysis and forecasting of these environmental factors. The external environment can further be divided into two components, the micro environment and the macro environment.

Micro environment:

The elements that fall under the micro environment consist of forces or factors in the firm’s immediate environment that affect the firm’s capability to perform effectively in the market place. These forces are suppliers, distributors, customers and competitors. Let us discuss each of the variables in details.


Suppliers are business customers who provide goods and services to other business organizations for resale or for productions of other goods. The behavior of certain forces in the suppliers can affect the performance of the buying organization positively or negatively. The critical factors here are the number of suppliers and the volume of suppliers to the industry. An audit of the suppliers will enable us to appreciate their strength and bargaining power, which the suppliers hold over the industry as a whole. The answers to the issues concerned have the potentials to affect the capability of firms in the industry to effectively deliver need-satisfying goods and/ or services. The trend today is that buyers attempt to persuade the supplier to provide exactly what the firms want. This process is known as “reverse marketing”.


Customers are those who buy goods and/ or services produced by the company. In a purchase chain, different people play significant roles before a purchase decision is made. The various influences must be understood. The customer may be the consumer of the products where he/she is the user. The critical factor here is that needs and wants of consumers are not static. They are fast changing. The changes in the preferences of the consumer create opportunities and threats in the market. The changes called for the marshaling of separate strategy to either fit into windows of opportunities or survive the threats in the market. A good knowledge of consumers’ behavior will facilitate the design and production of goods and services that the customers need and want, and not what they are able to produce.

Creating the Right Environment For Improvement

January 5th, 2021

Organisations are perfectly designed to get the results they get. Whether good or bad, the results that organisations deliver is the result of the match between what they are capable of delivering and what they must deliver to satisfy their customers or users. For example, an organisation might have to deliver extremely high reliability products but, if their processes are not robust enough to ‘build in’ reliability, it won’t occur and the results will suffer. In another example, an organisation might have to deliver exceptional customer service but its staff’s behaviours may not match the need and so, again, the organisational results will suffer.

This article focuses on elements of the Intangible Asset and Human Resources elements of Grant’s model – looking at why it is that some organisations are able to create an environment with motivated individuals and teams who can collaborate for success, and others can’t.

Why do organisations get what they get?

Why is it that like-for-like organisations with access to people of the same skill levels, with the same equipment and dealing with the same customers, can get such widely differing results? Why is it that one automotive manufacturer will produce cars that sell like ‘hot cakes’ and others go to the wall? Why is it that hospitals dealing with the same types of patients with the same types of staff and equipment can have such a difference in their mortality rates?

The difference in performance can often be put down to the organisational environment and this manifests itself as ‘artifacts’, in terms of the physical performance and operating concepts of a team or organisation.

The organisational artifacts are built on the norms and behaviours within the organisation in terms of the ways of behaving that are tolerated (or authorised) and topics that are ‘taboo’.

In turn, these norms and behaviours are influenced by the beliefs and assumptions of individuals and teams in terms of the explicit beliefs of individuals (such as, ‘this is a bad organisation to work for’) and implicit cultural assumptions (such as ‘managers make decisions; we just carry them out’).

Creating the right environment is not something that can be done overnight because you are dealing with beliefs and assumptions that may have been ingrained within the organisation over many years. Indeed, these beliefs are often reinforced daily through management behaviours and actions that reinforce the status quo and these can often been seen at the point an organisation wants to actually change. Here are two examples:

1. An organisation with a history of treating its staff as ‘numbers’ had created an environment with demotivated staff and poor levels of customer care. To rectify the problems with customer care, it launched a programme to transform the way its staff interacted with clients. An initial team was formed to tackle response times at a call centre. The team achieved impressive results and were feeding back to the chief executive when he interrupted them with the phrase, “That’s great but when can I bank the cheque?”

2. A hospital had introduced a policy of ‘nothing worn below the elbow’ to reduce the risk of infection. A senior doctor came onto a ward wearing a shirt which went below the elbow and a nurse approached the doctor to tell him that he needed to roll his sleeves up. The doctor replied, “Don’t be silly I’m in a hurry.” The nurse reported this to her Matron and was told, “Oh don’t worry, just let it go.”

In both instances the actions of the leaders involved (the chief executive in the first instance and the matron in the second) reinforced the previous beliefs and assumptions and, therefore, prevented any change in the organisational environment.

In reality, within most organisations there is not one single ‘uniform environment’. Rather, the organisational environment will vary from team to team, division to division and so on and the result of the combination of these many micro-environments will define the overall environment for the organisation.

Within this complex organisational environment, leaders at every level can have a major impact on their ‘local’ environment. An ineffective and abrasive divisional leader will negatively affect the performance of every part of her/his division, while an effective team leader of a small front-line team within the division may help create a local environment that makes the incompetence of the divisional leader more bearable for the rest of the team – and vice versa.

The level of complexity within organisational environments affects the duration required for it to change. As has been said: ‘The seeds of effective change must be planted by embedding procedural and behavioural changes in the organisation long before any improvement initiative is launched.’

What organisational environment do you want?

Most organisations want an ‘effective environment’ but what does this mean? Figure 1 showed that competitive advantage is gained by organisations who have the capability to deliver the key success factors in their market and that these capabilities are influenced by the organisational environment. So, an effective environment is simply one that allows you to develop and sustain competitive advantages in your market. Different organisations will operate in different environments and, so, will require different organisational environments to be effective.

Four types of organisational environment are shown in the table below:

The Clan
A friendly place to work with good relationships between staff and managers. Commitment is high and there is significant investment in developing the potential of individuals. Teamwork, participation and consensus is encouraged and success is defined by team satisfaction and participation.

A dynamic environment where leaders operate with autonomy and flexibly. They encourage their teams to be creative and ‘stick their necks’ out. Calculated risk taking is encouraged and teams form and reform as required. Experimentation is the lifeblood of the adhocracy based organisation and individual freedom and initiative is encouraged.

The Hierarchy
The traditional approach where command flows through a chain of command. This is still the basic structure of most organisations. Position brings authority, whilst the role of junior leaders is normally limited to organising activity and keeping an eye on the smooth delivery of the objectives of their superiors. Stability, formal rules and procedures, security and dependable delivery are the keys to success in this environment.

Market Focused
These organisations focuses on delivering the results required of them by the external environment. Market focused organisations are externally focused, driven by results and often very competitive. Leaders within the organisation are hard drivers of performance and expect results, with reputations resting on successful delivery.

Being clear about what you want from your organisation will have a big impact on the things you need to do to create it. This need for clarity of purpose is often hampered by the fact that, ‘Every enterprise is actually four organisations: the one written down, the one most people believe exists, the one that people wish existed and, finally, the one that the organisation really needs.’

Obviously the organisational environment you need to develop will depend on the organisation’s context in terms of such things as what your stakeholders want from you and the level and type of competition you face. Through analysing this context, it is possible to define what the gap is between the actual environment the organisation currently has and the required environment that will ensure long-term success. Creating the ‘right’ environment inside an organisation is really about managing the gap between these two environments.

Mind the gap

While the context will vary from organisation to organisation – and therefore the actual environment that each organisation is looking to create will vary – there are some common steps that organisations will need to take to create the right environment and manage the gap between actual and required performance.

Specifically, the actions that need to be taken are summarised below:

Link actions and improvements to what really matters
Making it clear why certain things need to be done and why the change needs to happen is essential to success. Being ‘future orientated’ and providing leadership and vision for others is also a prerequisite for success.

Remember organisations are perfectly designed to get the results they get
If you want to change the results you will have to change the systems, culture and processes that deliver the results and the quote, “If you always do what you have always done you will always get what you have always had,” is relevant here.

Make quality and improvement everybody’s responsibility
Organisations exist to effectively (and safely) deliver results. Leaders have a duty to promote the required changes and continue to support it throughout but every individual needs to be involved in delivering them.

Be responsive and flexible
No one action of approach will fix all the issues and leaders need to be flexible and capable. It also helps if they avoid complication (and jargon) and they set an appropriate pace of change that balances a need to continue delivering services and products with the need to make the change swiftly.

Celebrate and communicate
Don’t get hung up on the small issues (Are patients customers? Is it quality or innovation we striving for?) Instead, focus on celebrating every success and encouraging the ‘early adopters’ and getting them to help sell the changes to the rest of the organisation.

Adapt & Evolve
As you make your changes be aware that the world will continue to change. Some things will work and other won’t and the occasional problem should not stop the changes, but regular problems with implementation will require you to evolve and adapt to keep moving forward.

Supporting these generic actions to create an effective environment are some specific dos and don’ts that are summarised below:

Do be clear about what you want, the performance you expect and how you want the organisation to ‘work’

Don’t use improvement activities as a punishment

Do measure performance and keep the team up to date with progress and next steps

Don’t allow ‘tribal thinking’ between departments to prevent communication and improvement

Do maintain close to the needs of your customers and the market

Don’t let conflicts escalate into open warfare

Do engage and educate leaders in how you want them to interact with the workforce

Don’t focus purely on financial performance improvement

Do publicly praise success, particularly focusing on the positive attitudes and behaviours that your teams and managers have displayed.

Don’t give up. Significant improvement is a long term investment and requires on-going commitment.

Being clear about the required performance and the timescales that teams need to achieve is important – and the quote, ‘Some is not a number. Soon is not a time,’ is relevant here.

Enabling the right environment to work

While determining what type of organisational environment will deliver the right result for your organisation is the first step, at some point words and analysis have to be turned into actions. Whether the implementation is easy or complex will depend on two main factors, namely the degree of certainty about what is required and the degree of agreement about what needs to be done.

Being clear about what is required and gaining consensus from the main stakeholders will make the process a lot easier to implement but, to really make this work, words and actions need to be in alignment. Two final examples illustrate this:

1. A manufacturer had a public policy stating that people were the organisation’s most valuable asset and yet the experience of the staff at the front line was that they were just ‘numbers’ and that the organisational leaders did not really care about them.

2. A chief executive claimed that the organisation was ‘family friendly’ and focused on the needs of individuals – and yet continually organised meetings with management teams late in the evening.