Name: Kendel Shillingford Due Date: 05.02.

22
Subject: Management of Business Assignment

1a. Define the term micro-environment factors (1m)

b. Discuss how four micro-environmental factors can impact on the firm

and its operations (24m)

1a Micro Environment factors refers to the factors within a firm’s immediate

environment that impact on its performance, decision making process and ability to
serve its customers.
b. When one look at a business and the way it functions to execute a successful
marketing plan, they must realize that there are a number of factors that would
affect a firms ability to implement that plan successfully. These factors could either
be internal or external and that would influence a firms ability to conduct business
with its target market. This is referred to as the marketing environment which is
divided into the micro environment and the macro environment. In this essay
however emphasis will be placed on how four micro-environmental factors can
impact on the firm and its operations. Factors such as Company suppliers,
competitors, marketing intermediaries and customers are the main factors
impacting a firm and its marketing operations.
The first factor that will affect a firm’s marketing operations in its micro
environment is its suppliers of goods. These are the people who will provide a firm
with the necessary resources that the firm will use to provide its goods and
services. These suppliers will ensure that their materials are of top quality so as to
maintain a good business relationship with the firm. The firm will now use these
materials to provide quality materials for its target market. Without these suppliers
the firm will not have nothing to sell and marketing activities will subside. For
example, if Toby Fuchs a well known farmer who produces vegetables to
Epicurean Supermarket continues to provide vegetables to this firm then it will
always have vegetables for sale. On the contrary, should this supplier no longer be
able to supply Epicurean Supermarket with these goods for sale then marketing
activities of that product will come to a halt.
The second factor is the firm’s competitors. A firm competitors refer to other firms
in its environment who may be producing the same type or variety of goods and
services as the firm in question. As a result, a firm must take into consideration
what to produce. If the market is heavily saturated with a certain product, then the
firm must consider not to offer too much of that product or offer a better quality of
that particular product. If the firm specializes in marketing a product that is heavily
saturated then it can suffer huge losses. Therefore, when a firm is deciding upon its
product offering it should conduct a feasibility study and a competitor analysis to
provide themselves with a clear view of what to expect in the market and whether
or not to embark on the type of venture. In order for a firm to gain a competitive
edge the firms marketing department must ensure that they promote the firm’s
products in such a way as to win customers over its competitors. For example, if a
firm decides to specialize in bread, the market is so saturated that it would either
have to market its product in such a way so as to win over customers or go into a
different type of business venture that is not so saturated in the market. For
example, customized pastries.
The third factor is marketing intermediaries. It is quite clear that it is impossible for
larger firms to reach every single buyer of their products and so they rely on these
marketing intermediaries to fill these loop holes. The functions of these
intermediaries is to assist the firm in promoting, selling and distributing its
products to the final customer which are all very important roles to the marketing
manager of the firm. It is worth knowing that there are four types of marketing
intermediaries and they include resellers who purchase the manufacturers products
with an intention of reselling them, Physical distribution firms who help to stock
goods from one location to the designated destinations, marketing services
agencies who are firms who offer their services to other firms and act on their
behalf and would include marketing research agencies and advertising agencies.
Another example of this service is financial intermediaries who are firms who
focus on offering finance to buy the firms products or insuring the products that are
purchased for example banks, insurance companies, credit unions and other
financial institutions.
Finally, a firm’s customers could also affect a firm and its marketing operations.
These are the people who purchase the firm’s product. It includes the individual,
other businesses, resellers, government and the international community. The
marketing manager of a firm must be cognizant of customers changing tastes,
preferences and also their level of income. Each of the five buyers will present the
firm with five different markets that the firm will now have to assess in order to
ascertain their viability. Because it is the customers who are responsible for
facilitating marketing activities withing a firm, without them a firm will go out of
business, if there are little customers then a firm will have to make modifications to
its operations most importantly its marketing mix to outdo its competitors and win
over more customers. The same thing would apply if a fully matured firm is losing
customers.
In summary I can say that in order for a firm to be successful in executing a
successful marketing plan it must take into consideration all the above listed
micro-environmental factors which can greatly impact on the firm and
its operations