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Basics of Marketing - Kotler Philip

The main factors of the micro environment of the functioning of the company

The main goal of any company? Receipt of profits. The main task of the marketing management system ? To ensure the production of goods that are attractive in terms of target markets. However, the success of marketing management depends on the activities of the rest of the firm, and on the actions of its intermediaries, competitors and various contact audiences. Forces acting within the microenvironment of the firm are shown in Fig. 22.

Marketing managers can not only focus on the needs of the target market. They must take into account all factors of the microenvironment. We will deal with these forces, illustrating their role and influence on the example of the Chicago firm "Schwinn Baysicle Company," one of the largest bicycle manufacturers in the United States.

Firm

When developing marketing plans, the managers of the marketing service of the firm "Schwinn" should take into account the interests of other groups within the firm itself, such as senior management, financial service, R & D, logistics, production and accounting. For the developers of marketing plans, all these groups form the microenvironment of the firm (see Figure 23).

Fig. 22. The main forces operating in the company's micro-environment

Fig. 23. Microenvironment of the firm

In the company "Schwinn" the top management includes the general manager of the bicycle production department, members of the executive committee, managing director, chairman and members of the board of directors. This top echelon of management determines the objectives of the firm, its overall strategic attitudes and current policies.

Marketing managers must make decisions that do not contradict the plans of senior management. Moreover, all their marketing projects are subject to approval by top management.

Marketing managers must work in close cooperation with other parts of the firm. The financial service is concerned about the availability and use of funds needed to implement marketing plans. The R & D service deals with the technical problems of designing safe and beautiful bicycles and developing effective methods for their production. The Logistics Service takes care of the availability of a sufficient number of parts and components for the production of bicycles. Production is responsible for producing the right number of bicycles. The accounting service monitors revenues and expenses, helping the marketing department keep up to date on how well the Goals are being achieved. The activities of all these units in one way or another affects both the plans and the activities of the marketing department.