Organizations cannot exist in a vacuum. Every firm has to operate in the environment which surrounds it. Each organization is a part of larger system consisting of multiple forces which are interrelated and interact­ing with each other.
This environment provides threats and opportunities to organization, and it is the task of manages to continuously adjust to these changing conditions, only then it can survive and grow in the market. Environ­ment can be described as everything that is external or outside, the organization. It is also the sum-total of numerous forces within which every enterprise has to operate. These forces include both controllable and uncontrollable forces.
According to Philip Kotler “a company’s marketing environment consists of the sectors and forces outside of the marketing that affect marketing management’s ability to develop and maintain successful transactions with its target consumers”.
Thus, an organization’s marketing environment includes all such forces which have an impact on the firms marketing policies, marketing decisions and market­ing activities. Since the changes in the environment are very fast, it is of utmost importance that firms maintains strict vigil on its environment through marketing research and that is why environmental study has become the first step in strategic planning of many organization.