Composition and Functioning of the Marketing Environment

The Marketing Environment

The  marketing environment consists of three components, also called  sub-environments, which are known as the micro-environment, market environment, and macro-environment. Each of these sub-environments  consists of variables which can influence an enterprise, its workers and  their families. In the market environment, for example, competition

may have a very negative influence on the enterprise, lowering the profitability of the enterprise and impacting negatively on wage

The Micro-Environment

The micro-environment of an enterprise refers to all the activities that are executed by that enterprise. An enterprise must perform diverse activities in order to function properly and to attain the profit objectives  that have been decided on. To put this into a clearer perspective, let us

look at the Hajiya Amina Florist Shop in Balogun Market, Lagos. Hajiya Amina employs two permanent flower arrangers as well as a delivery person. Her rent per month is N3,000.00. She must pay N600.00 per month on the delivery vehicle that she has leased. The flowers that she buys from the market must be paid for in cash. Within these limitations of the micro-environment, Hajiya Amina must fulfill her commitments and still earn enough to make a living for herself and her two children!


This example illustrates the influence of the micro-environment on the enterprise and shows that she can control most of the activities which are part of the micro-environment (e.g. she may decide to employ less staff or to move to cheaper premises). These variables in the micro- environment must all be managed by Hajiya Amina to ensure success. These variables are also known as controllable variables.


These variables in the micro-environment are discussed below:

(a) The Product Managing the product entails planning and developing the right products  and/or services to be marketed by the company’s executives. Guidelines are needed for changing existing products, adding new ones, and taking  other actions that affect the assortment of products carried. Branding,  packaging and various other product features need to be considered as  well.

(b) Price Determining the right base price for its (company’s) products is one of the crucial micro-variable factors to be considered by the enterprise. Also, establishing policies concerning discounts, freight payments, and many other price related variables form part of the management responsibility to ensure that the enterprise objectives are attained.

(c) Promotion Promotion entails those weapons used to inform and persuade the markets, regarding a company’s products. These include advertising, personal selling, publicity and sales promotion.

(d) Distribution/Place This is the management of the marketing intermediaries for the distribution of the company’s products. Management’s responsibility is to select and manage the trade channels through which the products will reach the right target markets at the right time and to develop a distribution system for physical handling and transporting of these goods. Note, the management or marketing executives can manipulate these variables to meet their company’s objectives. For example, the product features can be changed, prices can be increased or reduced depending on the market situation, the most appropriate promotional media can be chosen, etc.