Micro Environment: Customers, Competitors, Suppliers, Intermediaries and Publics Questions

Question 1

What are publics?

Accepted Answer

**Publics** are groups that have interest in the firm and can influence its image, support, or operations (e.g., media, banks, community).

Question 2

Define micro environment.

Accepted Answer

**Micro environment** includes the immediate forces close to the firm (customers, competitors, suppliers, intermediaries and publics) that directly affect business operations.

Question 3

Who are customers in business environment?

Accepted Answer

**Customers** are individuals/organizations that buy a firm’s products or services.

Question 4

Who are competitors?

Accepted Answer

**Competitors** are rival firms offering similar products/services to the same market and competing for the same customers.

Question 5

Who are suppliers?

Accepted Answer

**Suppliers** are persons/firms that provide inputs such as raw materials, components, and services to a business.

Question 6

What are marketing intermediaries?

Accepted Answer

**Marketing intermediaries** are agencies/firms that help in promoting, selling and distributing products (e.g., wholesalers, retailers, logistics, platforms).

Question 7

Explain the elements of micro environment (any three).

Accepted Answer

Any three elements:
- **Customers**: their needs, preferences and satisfaction decide demand.
- **Competitors**: influence price, quality, promotion and market share.
- **Suppliers**: affect input **cost**, **quality** and timely availability.
- **Intermediaries**: wholesalers/retailers/logistics decide reach and delivery.
- **Publics**: media, banks, community influence reputation and support.

(Write any three with one line explanation.)

Question 8

Why are customers important in micro environment? (any three points)

Accepted Answer

Customers are important because:
- they determine **demand** and sales volume
- their satisfaction affects **repeat purchase** and loyalty
- their preferences decide product features and quality
- feedback helps improve service and innovation

Hence, customer focus is central to business success.

Question 9

Explain the role of suppliers in business (any three impacts).

Accepted Answer

Suppliers impact business by:
- affecting **cost** (input price changes alter production cost)
- influencing **quality** (good inputs improve output quality)
- ensuring **continuity** (timely supply avoids production stoppage)
- changing bargaining power when suppliers are limited

Thus, supplier management is essential for smooth operations.

Question 10

Differentiate between direct competitors and substitutes with examples.

Accepted Answer

**Direct competitors** offer similar products in the same category, while **substitutes** satisfy the same need using different products/services.

Examples:
- Direct competitors: two smartphone brands
- Substitutes: taxi vs metro (both satisfy travel need)

So, direct competition is within the category; substitutes are across categories.

Question 11

Explain marketing intermediaries and state their importance (any three).

Accepted Answer

**Marketing intermediaries** help the firm move goods/services from producer to consumer (wholesalers, retailers, agents, logistics, online platforms).

Importance (any three):
- provide **market reach** and availability
- reduce distribution burden through storage/transport
- support selling through promotion and customer contact
- improve delivery speed and customer experience

Hence, strong channels increase sales and service quality.

Question 12

Explain the role of publics in business (any three points) with examples.

Accepted Answer

**Publics** influence the firm’s image and support.

Role (any three):
- **Media publics** shape reputation (positive/negative coverage affects sales).
- **Financial publics** (banks/investors) affect funding and credit availability.
- **Local publics/community** affect acceptance of business activities (protests/support).
- **Government publics** influence compliance and permissions.

Example: a negative news report can reduce customer trust, while strong investor support can help expansion.

Question 13

Explain micro environment and its elements with a flowchart and suitable examples.

Accepted Answer

### **Micro Environment: Meaning and Elements**

The **micro environment** consists of immediate forces close to the firm that directly affect its ability to serve customers and achieve objectives.

**Elements with examples**:
- **Customers**: changing tastes (e.g., preference for healthy products)
- **Competitors**: price cuts, new product launches
- **Suppliers**: input price rise or late delivery
- **Intermediaries**: retailers/logistics/platforms affecting reach and delivery
- **Publics**: media coverage affecting brand image

```text
Micro factors (Customers/Competitors/Suppliers/Intermediaries/Publics)
                     ↓
           Direct impact on decisions
                     ↓
Product • Price • Promotion • Distribution • Service
                     ↓
           Sales, profit and reputation
```

Thus, micro environment changes require quick and practical business responses.

Question 14

Differentiate customers, competitors, suppliers, intermediaries and publics with a table.

Accepted Answer

### **Micro Environment Elements: Difference (Table)**

| Element | Meaning | Main impact |
|---|---|---|
| **Customers** | buyers of products/services | demand, satisfaction, sales |
| **Competitors** | rival firms | pricing, market share, innovation |
| **Suppliers** | input providers | cost, quality, continuity |
| **Intermediaries** | channel partners (wholesalers/retailers/logistics/platforms) | reach, availability, delivery |
| **Publics** | groups influencing image/support (media, banks, community, govt) | reputation, funding, compliance |

This table helps write clear distinctions in exams.

Question 15

Explain how a business can respond to changes in micro environment with a simple action plan/flowchart.

Accepted Answer

### **Business Response to Micro Environment Changes**

Micro environment changes are frequent and direct, so a firm should respond quickly and systematically.

**Action plan**:
- monitor customer feedback and market signals
- analyze competitor moves (price, product, promotion)
- manage suppliers (multiple sourcing, contracts, quality checks)
- strengthen channels (retail network, logistics, online platforms)
- manage publics through **PR/CSR** and transparent communication

```text
Detect change → Analyze impact → Decide response → Implement (product/price/channel/PR) → Review results
```

This approach helps protect customer value and maintain sales and reputation.

Micro Environment: Customers, Competitors, Suppliers, Intermediaries and Publics

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