What Is Micro Environment? – All You Need To Know
by Mashum Mollah Management 19 October 2021
In marketing and business management, the micro environment is a crucial concept. Especially during framing marketing strategies and developing business plans, business owners consider the micro environment factors affecting business. It is because every organization operates in particular external and internal environmental conditions. These impact growth, profitability, as well as sustainability.
But oftentimes, people get confused while analyzing the micro environment of a business. Indeed, your understanding needs to be very clear for each microenvironment factor. Are you also the one among them who finds the micro marketing environment difficult to understand? Then read this article till the end to get better clarity.
What Is Micro Environment Definition?
Micro environment or micro marketing environment is one of the core terms in the field of business management. If you ask about micro environment definition in the business world, then:
“A micro environment can be referred to as the small-scale environment of a business or a company that impacts its decision making and performance.”
Do you wanna learn a unique fact about the micro environment of a business? The situational analysis or SWOT analysis, an important marketing tool, revolves around the microenvironment factors of a business.
Micro Environment Factors
Micro marketing environment of a company is affected by a large number of micro environment factors. These are also called internal factors of a business. The business performance and decision-making system largely depend on them. However, these factors are applicable in both the micro and macro environment of marketing.
There are 6 core micro environment factors that affect the decisions, which are as follows:
- Competitors: These are the leading performers in the market operating under the same industry. For example, Nestle is Cadbury’s competitor.
- Customers: Customers are the lifelines of a company and the most crucial component in a country’s micro environment. Their purchasing behavior, tastes, and preferences, and customer relationships are some things that companies need to prioritize.
- Suppliers: Suppliers play vital roles in the business value chain network. It is because they are the ones who provide inputs like raw materials, equipment, etc. In order to ensure a flawless functionality of a business, supplier relationships need to be optimized.
- Company: The inter-organizational departments and their activities are parts of the marketing plans. Like human resource team, Research and development team, finance operations team, C -suite department, technical departments take active parts in the decisions making.
- Marketing Intermediaries: In the value delivery network, marketing intermediaries take big parts. Promotional, sales, and distributions organizations are the most prominent examples of marketing intermediaries.
- General Public: General public are basically of 7 different types, and each of them has unique interest areas in a company. For instance, media public, citizen action public, local public, the general public, financial public, and internal public.
Like we said earlier, these are the same elements you have to consider while using situational analysis templates.
Micro Environment Example
Now that you know what is a micro marketing environment and micro environment factors, do you want more precision? Here are a few most prominent microenvironment examples that would help you get better insights.
Let us assume NIKE is trying to upgrade its performance and has arranged a meeting with its key internal stakeholders. The primary point that would be discussed here is how Nike is performing amidst the “competitors” like Puma in the international market. Oppositely, each of the stakeholders like Investors, employees, suppliers, customers, etc., are vital components of the micro environment. They control the decision-making aspects in terms of Nike’s performance improvement.
Other micro environment examples are the suppliers of the computer Tech giant Dell, Foxconn, Pegatron, MSI, etc. Dell’s market performance is based on the actions of these suppliers. In addition, Lakme’s customers’ tastes changed from glossy lipsticks to matte finish lipsticks. Hence, over the last few years, Lakme started producing matte finish lip colors. Here, the company’s product catalog got changed due to a shift in customers’ preferences.
Micro Vs Macro Environment – The Comparison
Well, here is the debate – micro vs macro environment. Both micro and macro marketing environments are mandatory factors for business decision-making. The stakeholders consider this micro and macro marketing environment debate while drafting business development and marketing plans. The comparison chart of micro vs macro environment are given below:
| Parameters | Micro Environment | Macro Environment |
| Definition | The micro environment factors are the internal elements that affect the business performance. | Micro environment factors are the uncontrollable external elements that influence the business performance. |
| Components | The 6 key elements of the micro marketing environment are suppliers, customers, competitors, intermediaries, general public, and companies. These are also the micro environment factors or examples of micro environment. | The 6 macro environment factors are political, social, economic, technological, environmental, and legal. |
| Functioning | These are basically strengths and weaknesses for an organization. | These are basically threats and opportunities for an organization |
| Marketing Control | These are controllable forces. | These are uncontrollable forces |
| Impact | Micro environment factors have a direct impact on business performances. | Macro environment factors have a direct impact on decisions making and performance. |
Frequently Asked Questions
Q1. What Is Micro Environment In Business
In marketing and business, the micro marketing environment is the internal business environment consisting of several micro environment factors. Some of these factors are competitors, customers, companies, intermediaries, etc. These elements are also the key driving factors to the micro environment of a company.
Q2. Which Of The Following Is Not A Type Of Micro-Environment?
Which of the following is not a type of micro environment? Technology is not a type of micro environment. In fact, technology is included in the macro-environment.
Q3. What Is Macro Environment?
The macro environment is opposite to that of the micro marketing environment and micro environment factors. These are uncontrollable forces and impact the decision-making of a form to a great extent. The principal macro environmental factors are technological, demographic, economic, environmental, and political factors. Please note:
Q4. What Are The 6 Components Of Micro Environment?
The 5 components of the micro environment can also be regarded as the 5 micro environment examples. These are Customers, Suppliers, Competitors, General Public, marketing intermediaries, and the company.
The Final Words
To conclude, micro environment factors are the core influencers in terms of marketing activities and business development plans. Are you a business development manager? Then you need to take these micro environment examples into account while planning any business decision. It will give not only your company exposure but also endless benefits as well as brand image in the long term.
Was this guide helpful to solve your queries regarding the micro marketing environment? Drop your opinions in the comment section and help us expand our thinking.
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