Market environment

From CEOpedia | Management online
Market environment
See also

Market environment – it is defined as a whole of physical and social factors which are having regard to while individuals in the organization makes the decision. This is a term directly related with marketing and pertain to factors and forces which have an impact to build and maintain customer relations by companies. The market environment can be split for three levels. Can distinguishes:

  • Internal environment – concerns the internal part of the organization practiced (used) to create, share the information or deliver market offers.
  • External micro environment – it is small forces external the business which factor into its ability to serve the clients.
  • External macro environment – it is much bigger (concerning external micro environment) societal forces affected on the survival of the company. The scrutiny of macro marketing environment it is helpful to better comprehend some factors like: the environment, adaptation to the social environment or changing, and to goal the purpose of corporate marketing.

The division of internal and external market environment

Referring to internal environment – it is made up of crucial social and physical factors inside the company or specific decision unit which are directly considered while the decisions are being made by individuals in that system. It regards to all departments the like management, finance and accounting, research and development, purchasing or Business operations. Each of these departments have an impact for marketing decisions. As far as all of departures are concerned the research and development division have input as to the characteristics a product can performed, the mission of accounting is approval the finance of marketing plans in not meeting customer satisfaction. Marketing managers are responsible for controlling supply chain flow and watching trends concerning suppliers to ensure that clients will be supplied with goods right on time to maintain positive relationships with clients. The company can control up to a point these internal factors.

External environment relates of those pertinent physical and social elements outside the company or specific decision unit which are directly considered. There is a split the external environment for micro and macro environment. The micro environment is composed by customers, partners and competitors. The micro environment is focused mostly on customer markets (for example: business, customer or government markets, globalization international or reseller markets). The macro environment includes all of the units which have an impact on the micro environment. It refers to fields like economy, demography, politics, technology , natural forces and culture. The organization has no impact for the macro environment, because it is uncontrollable factor of the company. Macro environment is majorly concerning on the demographic, technological or economic aspects of the markets. All of the factors which exist outside the organization can be called PESTEL framework. This abbreviation indicates factors which have an impact for organization in macro environment like: Political, Economic, Social, Technological, Environmental and Legal.

Environmental Scanning

Environment scanning is a process that involves monitoring external and internal environment in perpetual and detailed way. The goal of this process is to identify risk and chances which can impact for the company's expectance or trend.


  • Albright KS. (2004), Information Management Journal, Citeseer
  • Duncan, R. B. (1972), Characteristics of organizational environments and perceived environmental uncertainty, Administrative science quarterly
  • Elliott G., Rundle-Thiele S., Waller D., Smith S., Eades L., Bentrott I. (2017), Marketing, 4th Edition”, John Wiley & Sons Australia, Limited
  • Holmm M, Kumar V. & Rohde C. (2012), Measuring customer profitability in complex environments: an interdisciplinary contingency framework, Journal of the Academy of Marketing Science, vol. 40, no. 3
  • Indris S., Primiana I. (2015), International journal of scientific & technology research,
  • Lings I. (1999), Balancing internal and external market orientations, Journal of Marketing Management, 15( 4), pp. 239-263

Author: Klaudia Pawlik