The Marketing Environment
The marketing environment is defined as the external forces that directly or indirectly influence an organization’s capability to undertake its business. The macro marketing environment consists of six core forces: political, legal, regulatory, societal/green, technological, plus economic/competitive issues. The micro marketing environment includes more company-specific forces: types of more competition, supplier power, buyer power and a business are other publics. Environmental scanning is the process of collecting information about the forces of the marketing environment. A strategic window is a major development or opportunity triggered by chance in the marketing environment.
Key Issues
The marketing environment consists of trading forces operating in a marketplace over which a business has no direct control, but these forces will shape the manner in which the business functions and is able to satisfy its customers. Owing to the “beyond direct control” aspect, too many organizations fail to adequately monitor the key forces of their marketing environment. Those businesses that do assess evolving trends and the implications from environmental change tens not to encounter as many market-driven crises and often gain competitive advantages over rivals that have failed to understand the implications from a particular environmental occurrence.
The macro marketing environment forces are the big issues that affect all forces active in a particular market and indeed all customers in a target market segment. While individual businesses or customers may well be better placed to accommodate such issues and their implications, these forces do affect everyone in a market. The micro forces were first identified by economists in a PEST analysis: political, economic, social and technological factors. Marketers more commonly discuss six components with the addition of regulatory and legal forces.
The micro forces owe much to the work of Michael Porter in the 1970s and include all aspects of competition, direct rivals, new entrants, substitute competition plus the relative power of buyers and suppliers and the influence of an organization’s many other public (employees, shareholders, financial backers, regulatory authorities, etc…). While the macro forces impact on all players in a market, the micro forces have a more variable impact on separate businesses trading in a particular market.
However, an understanding of macro and micro marketing environment forces may help a business to compete more effectively against its rivals, but in addition may enable an organization to take advantage of emerging strategic windows and opportunities.
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